Germany should leave the European Union and probably will at some point

Posted by admin in Current Events, Featured Articles on 03 14th, 2013 | no responses
I came to this conclusion partially while traveling around Europe and especially in the Euro-zone. But more so now after seeing the economic problems in various EU member countries.
A few people I spoke to in Portugal did say that their lives under the Euro were much better than in previous times. The same was also true when I spoke to people in Greece.
To be fair, most of the people I spoke to were people in the leisure and hospitality industry who were likely to benefit from the Euro because now that their earnings were in the Euro.
Speaking to some average Joe’s, I heard the common complaint of not having access to good quality jobs.
But there seems to be a huge difference in infrastructure and governance ability and just in terms of pure economic development in countries like Greece, Portugal vs. France or Germany.
I also see countries like Estonia who have demonstrated the ability to deliver on austerity measures resulting in a 7.6 economic growth in 2011 (vs. an 18% economic contraction in 2008-2009) join the Euro-zone.
These kinds of countries with an impressive will-power and development joined monetarily with insolvent members does not make sense for the countries that consists of ambitious people and a progressive government.
The Germans, I spoke with really did not care for the Euro and they were all quite un-happy with the bailouts of other countries with tax-payer funds.
Yes, the Euro does make trade easier within member states but trade benefits who exactly? I would say countries with a trade surplus is an obvious answer.
And the Germans could trade just as well with their old Deutsche Mark and get rid of all the expenditure of being part of the Euro.
Another observation is that the Maastricht treaty (Treaty of the EU) which had all sorts of restrictions with respect to budget deficits, bailouts, industrial policy, adequate social protection etc. are broken in so many member states that it makes no sense to say that the treaty is effective in creating a level in terms of standards in member states.
So the point here is that if you have few countries dominating the EU and the rest sliding backwards or having little or no progress, the entire system starts to fail because the properous part of the EU has no reason to finance the failing part of the EU.
Germany cannot be looked upon as a banker of last resort for the EU. At some point they’re going to say that they’ve had enough and it was a worthwhile but failed experiment.
On the flip-side, countries that should default on their financial obligations should do so. This will give them the opportunity to make lasting and worthwhile change because there will be no other option.
The German banks should work-out some strategies (they probably already are) for the future where their Euro-zone loans are likely to be devalued if Germany leaves the Euro-zone.

I came to this conclusion partially while traveling around Europe and especially in the Euro-zone. But more so now after seeing the economic problems in various Euro-zone member countries.

A few people I spoke to in Portugal did say that their lives under the Euro were much better than in previous times. The same was also true when I spoke to people in Greece. To be fair, most of the people I spoke to were people in the leisure and hospitality industry who were likely to benefit from the Euro because now that their earnings were in the Euro. Speaking to some other people in Spain, Portugal and Greece,  I heard the common complaint of not having access to good quality jobs and the high price of food.

Keeping personal views aside, there seems to be a huge difference in infrastructure and governance ability and just in terms of pure economic development in countries like Greece, Portugal vs. France or Germany.

I also see countries like Estonia who have demonstrated the ability to deliver on austerity measures resulting in a 7.6% economic growth in 2011 (vs. an 18% economic contraction in 2008-2009) are a part of the European Union (EU).

These kinds of countries with an impressive will-power (Estonia) and industrial and social development (Germany) joined monetarily with insolvent members does not make sense. Countries that consists of ambitious people and a progressive government can and should pursue their own economic interests.

The Germans, I spoke with really did not care for the Euro and they were all quite unhappy with the bailouts of other countries with tax-payer funds.

Yes, the Euro does make trade easier within member states but trade benefits who exactly? I would say countries with a trade surplus is an obvious answer. But if this money that is being acquired through trade has been loaned by a trade surplus country anyway then what exactly are these earnings?

This is like a credit card company pointing to paper profits for money it keeps loaning to people to buy more and more stuff that they cannot afford.

And the Germans could trade just as well with their old Deutsche Mark and get rid of all the expenditure of being part of the EU.

Another observation is that the Maastricht treaty (Treaty of the EU) which had all sorts of restrictions with respect to budget deficits, bailouts, industrial policy, adequate social protection etc. is broken in so many member states that it makes no sense to say that the treaty is effective in creating a level in terms of economic and social standards in member states.

So the point here is that if you have a few countries dominating the EU and the rest sliding backwards or having little or no progress, the entire system starts to fail because the prosperous part of the EU has no reason to finance the failing part of the EU.

Germany cannot be looked upon as a banker of last resort for the EU. At some point they’re going to say that they’ve had enough and it was a worthwhile but failed experiment.

On the flip-side, countries that should default on their financial obligations should do so. This will give them the opportunity to make lasting and worthwhile changes to their government, society and economy because there will be no other option.

The German banks should work-out some strategies (they probably already are) for the future where their Euro-zone loans are likely to be devalued if Germany leaves the Euro-zone.



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