Oh, a sharp move can happen, exactly as it just did with Switzerland (41% [2] although stabilized at a bit under 20%): via an exit from a peg. The monetary unio

Oh, a sharp move can happen, exactly as it just did with Switzerland (41% [2] although stabilized at a bit under 20%): via an exit from a peg. The monetary union is such a peg, an exit or any form of breakdown would cause a sharp revaluation. Without warning, for obvious reasons. You could argue that an economy which is entirely in a naturally monopolistic, price-insensitive position might be able to weather some pretty severe currency moves, but I don't think Germany can be described thus. 70% of the German economy is services, and 69% [1] of German exports are to EU countries (which would be particularly hit by a EUR breakup as they'd move the same amount the other way). Cars are the largest export by dollar value [2]. I don't know how I'd get stats to show price sensitivity of exports, that being said I know of no car company which is not price sensitive, other than niche manufacturers (e.g. Morgan in the UK). Medical supplies might be another story, especially as it's capex intensive and low headcount. Imports might be part of the picture, but VW's 45% of global staff that is employed in Germany will still draw German Euro paychecks. As per 5. you appear to agree with me: macro effects are global and "nowhere/no time is different". Although it is not Eastern Euros but Southern Euros which would devalue. Poland isn't Greece by any stretch. Now I will admit that I agree with you a little bit: I think the fears of currency appreciations are somewhat overstated, particularly in a sophisticated economy producing high value added goods (mine is similar to the reasoning you put forward). Maybe Swiss readers can confirm, but the CHF appreciation seems to have gone alright [4]. But, I had to make the case, and it was popular amongst traders when I was still in the business. [1] http://www.economywatch.com/world_economy/germany/export-import.html http://www.economywatch.com/world_economy/germany/export-imp... [2] http://www.worldstopexports.com/highest-value-german-export-products/2057 http://www.worldstopexports.com/highest-value-german-export-... [3] https://www.thetrumpet.com/article/12397.2.0.0/economy/swiss-franc-soars-euro-plummets-world-wonders-if-the-european-union-is-doomed https://www.thetrumpet.com/article/12397.2.0.0/economy/swiss... [4] http://www.swissinfo.ch/eng/personnel-requirements_banks-need-more-people-not-fewer/41532740 http://www.swissinfo.ch/eng/personnel-requirements_banks-nee...