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| 2011: Germany And The Euro Zone |
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| Written by Jack Wogan |
| Saturday, 09 April 2011 09:15 |
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Rumor has it Germany has been weighting the option of leaving the Euro Zone some time soon, after recently showing reluctance in supporting the financial assistance granted to weaker European economies in Greece, Ireland or Portugal. And this, despite of the fact (or maybe it is because of this fact) that such countries have been, for many years, a "safe" market for all the goods and services exported by Germany, one of the world's giant exporters. Germany continues to be the country with the most powerful economy in the Euro Zone, however, its wish to not support the weak economies may be well-founded; given the deepened crisis, it may simply not afford the bail out; moreover, from a political viewpoint, it is more and more complicated to accept the idea of backing other states' social programs that many judge as impractical. In a plan that Germany envisaged in June last year, jointly with France, the Euro Zone would be split into two areas (a two-tiered system), with the more stable states in the Euro Zone to form a "super-euro" zone, while other countries, with much higher indebtedness, would keep the euro currency but would be left outside this elite. Only a few months later, Germany changed its mind and signaled its support for the Euro Zone Member States, when German Finance Minister (the same who at some point expressed the possibility of some countries being ejected from EMU if they did not keep control over their budgets) ruled out the possibility for any EU Member State to be evicted from the European Monetary Union. The desire to go back to the former Deutschmark was labeled as "unrealistic nostalgia" by the German Government Official. Obviously, Germany should be interested in keeping the euro alive, as it hugely benefited of the latter over the years, since its admission to the Euro Zone back in 1999. Germany has always been an exporting giant, with its economy heavily export-based. Not having to deal with exchange rate differences helped a lot and everything became all of a sudden much easier with the single currency. However, things came to a point where the costs of maintaining the euro may overtake the benefits for the Germans. Nevertheless, Germany has recently re-affirmed its commitment to the Euro Zone. Will the euro have what it takes to survive Germany bolting from the euro Titanic? Some say this is a must, since so much political capital had been invested in this alliance, over time. Others do not cast out the possibility of a failure. Consequences will be huge, they say. Let's be prepared. About the Author: If you choose to invest in gold, keep in mind to purchase Gold Bullion coins; their purity goes up to 99.9% Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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