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The strong exports would be self regulating if Germany had its own currency the deutsche mark. If you have the Dmark and people like german cars, germans export
by acd 12y ago
The strong exports would be self regulating if Germany had its own currency the deutsche mark. If you have the Dmark and people like german cars, germans exports will rise and so will the currency deutsche mark. Like it is now, people like german cars, but germany has the euro so it can export good cars at an almost artificially by the euro cheap price.
Thus the south of Europe is trapped in the Euro as they do not increase productivity as much as the north and in some product cases does not make as good products as Germany.
The European politicians has pretended that all of europe are equal in productivity.
The german wants to sells cars in euroes, but you do not want to support the south permanently financially.
This is like going against the tide, its a matter of time before the Euro will fall.
I just hope Europe will unite in peace after that event.
- UweSchmidt 12y agoYou raise a good point. I remember how this was discussed in the 90ies as a downside of the common currency, to be weighted against the benefit of simplified trade in a common market. Worth noting that Sweden is in the EU but they maintain their own currency, so that is always a viable option for any country imo.
- npstr 12y agoThe euro is crap and must be removed. I should have mentioned it to make my point clear. I don't even bother with thinking of a way to make German economics work while in the eurozone, simple because the financial nature of the eurozone is so bad thought out it must be removed, and then maybe we can start thinking about a better version of it.
- Ygg2 12y agoIt doesn't have to end like that. I'm pretty sure United States also have different levels of productivity between states and dollar works remarkably well for them.
- yxhuvud 12y agoUSA have internal transmission mechanisms that even it out. It require a fiscal union or some other big common spending programs.
- eli_gottlieb 12y agoIn the United States, our military spending and antipoverty aid mostly flows from high-productivity states to low productivity states, a de facto transfer payment between the rich regions and poor regions of America. And even so, the politics of the poor regions have gotten so toxic that many of us in the rich regions wish we didn't have to carry them anyway.
- nextweek2 12y agoThe city of Detroit is a prime example of where it did not. They went bankrupt and had bailouts.