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Germany is a net exporter and they gain by freer trade throughout the euro zone, so I doubt the will leave the EU. Will the leave the euro is another question.
by aaronblohowiak 15y ago
Germany is a net exporter and they gain by freer trade throughout the euro zone, so I doubt the will leave the EU. Will the leave the euro is another question.
- Vivtek 15y agoYeah, nobody is predicting the breakup of the EU, but a lot of people are questioning the value of a single currency with a multiplicity of national banks. Rest assured, the Union itself is here to stay.
- bubbleRefuge 15y agoRight, and those national government banks do not have credible deposit insurance for national banks. So a bank run is possible. During the US crisis in 08/09 we had the Fed/Treasury complex insuring deposits and supplying liquidity which they can do in infinite amounts. Euro-zone nations are not sovereign and are at the mercy of the ECB. You underestimate the risk of a breakup, the Euro is broken.
- bubbleRefuge 15y agoI think its a good possibility. Germans feel they are subsidizing the Euro-Zone periphery countries. Now with the ECB having to continue to issue currency in exchange for bank liabilities and national government bank liabilities, Germany may perceive this as inflationary ( though it is probably not) and given German history ( Wiemar, etc) they are sensitive to this type of policy. As such, wouldn't it be much easier for Germany to leave the Euro than the reverse?