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Without being tied to the common currency, the Greek Drachma would have devalued relative to the Deutsche Mark, making Greek exports and tourism more lucrative.

Without being tied to the common currency, the Greek Drachma would have devalued relative to the Deutsche Mark, making Greek exports and tourism more lucrative. Had this been able to occur, the impact to the Greek economy would have been far less. Instead, the common currency has greatly benefited Germany: had the Germans retained the Deutsche Mark, their currency would be valued higher than the Euro is now, making their exports more expensive and/or lowering the profits of export industries.

lispm 9y ago
Greece imports a lot -> gets more expensive. Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. People also think in economic terms, but the Euro is a political project. Countries like Greece wanted to be in the Eurozone. It was not Germany's wish. It was the wish of Greece and the population of Greece also wanted it - not just the politicians. Germany actually did not want to have the Euro itself, it agreed to the Euro to get the Reunification. But it agreed on the Euro to be a stable currency, not one that politicians would devalue to gain short term effects.
- readittwice 9y ago
  > Greece imports a lot -> gets more expensive. I just want to add: This could also be a good thing, since people in Greece are more likely to spend money on goods produced in Greece. This could help their economy.
  - lispm 9y ago
    It could, but for example Greece lacks energy resources and imports a lot of oil and gas. That's not easy to replace and that still would involve imports. The top imports are fuels, machines/computers, pharmaceuticals, electrical equipment, ships, ...
- petre 9y ago
  > Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. All pegs are a potential victim of currency speculation. The solution is to end the peg and let the currency float, as it happened to the British Pound/Deutche Mark during the Soros stunt in the 90s or more recently with the Euro/Swiss Franc peg.
readittwice 9y ago
Probably true, but that doesn't help anyone. Greece wanted to have the euro, they weren't forced to. They also knew from the start that devalueing your currency isn't possible anymore. Today their debts are in Euro not Drachme, now leaving the Euro doesn't change that fact.
- Boothroid 9y ago
  Not true, they could easily leave their commitments to the remaining Eurozone members to pick up.
ahartmetz 9y ago
It's not all great for working Germans either. German companies are doing great while inflation-adjusted salaries are flat or decreasing depending on industry - for its high productivity level, Germany has become sort of a low wage country. The current low unemployment rate has a high price.
- lispm 9y ago
  The larger part of that problem is the poverty/unemployment/lack of jobs/... in the eastern parts.

lispm 9y ago

Greece imports a lot -> gets more expensive. Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. People also think in economic terms, but the Euro is a political project. Countries like Greece wanted to be in the Eurozone. It was not Germany's wish. It was the wish of Greece and the population of Greece also wanted it - not just the politicians. Germany actually did not want to have the Euro itself, it agreed to the Euro to get the Reunification. But it agreed on the Euro to be a stable currency, not one that politicians would devalue to gain short term effects.

readittwice 9y ago
> Greece imports a lot -> gets more expensive. I just want to add: This could also be a good thing, since people in Greece are more likely to spend money on goods produced in Greece. This could help their economy.
- lispm 9y ago
  It could, but for example Greece lacks energy resources and imports a lot of oil and gas. That's not easy to replace and that still would involve imports. The top imports are fuels, machines/computers, pharmaceuticals, electrical equipment, ships, ...
petre 9y ago
> Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. All pegs are a potential victim of currency speculation. The solution is to end the peg and let the currency float, as it happened to the British Pound/Deutche Mark during the Soros stunt in the 90s or more recently with the Euro/Swiss Franc peg.

readittwice 9y ago

Probably true, but that doesn't help anyone. Greece wanted to have the euro, they weren't forced to. They also knew from the start that devalueing your currency isn't possible anymore. Today their debts are in Euro not Drachme, now leaving the Euro doesn't change that fact.

Boothroid 9y ago
Not true, they could easily leave their commitments to the remaining Eurozone members to pick up.

ahartmetz 9y ago

It's not all great for working Germans either. German companies are doing great while inflation-adjusted salaries are flat or decreasing depending on industry - for its high productivity level, Germany has become sort of a low wage country. The current low unemployment rate has a high price.

lispm 9y ago
The larger part of that problem is the poverty/unemployment/lack of jobs/... in the eastern parts.