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Yes, the German export industry has been heavily subsidized by the monetary structure of the eurozone. This is paid for by the guarantees of the various bailout
by mrich 15y ago
Yes, the German export industry has been heavily subsidized by the monetary structure of the eurozone. This is paid for by the guarantees of the various bailout funds (hastily-constructed EFSF, to be replaced by permanent ESM), which are mostly backed by German and French taxpayer money.
I wonder whether politicians understood the implications of monetary union one decaded ago - their dealings with it really look genuinely clueless. I am pretty sure the export industry did.
- more_original 15y agoThey ought to have known. German reunification and the associated monetary union had a much similar effect. One can make a rough analogy: West Germany then ~ Germany now; East Germany then ~ Greece now.
- eru 15y agoI hope the Greece don't get all those Neo-Nazis that plague(d) former East Germany.
- nickik 15y agoThe should have known if the don't, many economist where pointing it out back then.
- toyg 15y agoI think they understood it better than they've given credit for. People don't remember the political climate at the time: 20 years ago, when the Euro was planned and sanctioned, Germany was still divided, and West Germany was the top dog in economic terms among European countries (even more so than today) while most other countries (including France and UK) were fighting a recession. German public opinion didn't want to partake from the almighty Deutsche Mark, which was a rock in troubled seas (the British Pound was crashing, the French Franc was weak, the Italian Lira was losing 20% every 10 years, etc etc); French and Italian elites thought that a common currency would have allowed them to harness the German industrial strength, basically helping themselves to low interest rates they wouldn't have enjoyed otherwise. The German establishment mostly saw the Euro as a straight-jacket, a burden to accept in order to bring about their own reunification, which otherwise would have been opposed across Europe (a reunited Germany would have been dangerously powerful on its own). As it happens, it turned out better for them than for other members; this is why they keep insisting on a monetary approach to public policy that will keep others down, at least until this suites them.
- waterlesscloud 15y agoIn 1989 I did the backpack-across-Europe thing for the summer. The Berlin Wall was still up, the Soviets still in Eastern Europe, but just barely. Change was very much in the air. Everywhere I went, I'd ask people what they thought about the coming European Union. To a person, they were all cautiously supportive, but would also say "But I don't trust the Germans." Everyone expected the Germans would have designs on controlling the thing, and likely the ability to do it. Even the Germans seemed to expect it. These were the proverbial people on the street, so I'm guessing everyone pretty much knew how it was going to go in the long run.
- lispm 15y agoGermany has just 82 Million people. The EU has 500 million. That Germany dominates and even controls the EU is a myth.
- 15y ago
- Spearchucker 15y agoThey understood full well. The EU has a shared monetary policy, but no shared fiscal policy. Fiscal policy (!speculation alert!) is the next step, and will go a long way to avoiding another crisis.
- iwwr 15y agoOr it may work to collect the remaining unbroken eggs into one basket. Maybe centralization is not the solution here. Europe has benefited from so-called "disunity". It made economic and scientific (and social) development possible, with no one political entity able to oppose it outright.