I am losing lots of respect for The Economist

[Dari]

This is simply true. Germany's export sector is benefitting from what amounts to an enormously undervalued currency due to other Eurozone members' problems. They are in effect getting the same advantage that China does through currency manipulation. Last time I saw some figures, experts were saying that Germany's currency would appreciate by somewhere around 30% if it were to be on the Deutsche mark vs. the Euro. A 30% undervalued currency is an insane advantage.

You are wrong. Germany's export success is because of Germany, not because of the euro. The euro is simply icing on the cake. The Germans worked hard, very hard for their export success and it's now bearing fruit. They have stuff others want. This is oppossed to the southern, lazy countries that did nothing when the world economy was booming in the 2000s and they thought the party would last forever. Look up Agenda 2010. Seriously, and learn something. Germany is where they are today because they made the hard choices. Simple as that.

 

[ichy]

Germany and the rest of the EU created this situation and did so willingly.

Wrong. The lazy, shiftless Greeks created their own problems and they have nobody but themselves to blame. I hope they're kicked out of the Euro so I can laugh at them.

 

[fskimospy]

Wrong. The lazy, shiftless Greeks created their own problems and they have nobody but themselves to blame. I hope they're kicked out of the Euro so I can laugh at them.

Wrong, and we're not only talking about the Greeks. The Euro was foolishly conceived in a structural sense.

 

[fskimospy]

You are wrong. Germany's export success is because of Germany, not because of the euro. The euro is simply icing on the cake. The Germans worked hard, very hard for their export success and it's now bearing fruit. They have stuff others want. This is oppossed to the southern, lazy countries that did nothing when the world economy was booming in the 2000s and they thought the party would last forever. Look up Agenda 2010. Seriously, and learn something. Germany is where they are today because they made the hard choices. Simple as that.

It's not as simple as that and I'm unaware of any credible independent source that would make such a ludicrous claim as you are making now. You need to go learn something about international trade.

Germany most certainly has benefited from internally cutting its labor costs. It also is hugely benefiting from de facto currency manipulation. Spain, as an example had lower public debt than Germany did going into the crisis as well as a lower deficit, by any measure a more fiscally responsible government going into this crisis. How's that working out for them?

 

[ichy]

Wrong, and we're not only talking about the Greeks. The Euro was foolishly conceived in a structural sense.

Germany was forced into the Euro as a condition of re-unification.

 

[fskimospy]

Germany was forced into the Euro as a condition of re-unification.

That is no excuse, they still chose to sign the treaty and have not amended it in the 20 years since. If they thought that reunifying with East Germany was worth the current economic chaos, so be it. That alters nothing as to the fundamental unsound nature of the Euro and Germany's complicity in it.

 

[yllus]

You are wrong. Germany's export success is because of Germany, not because of the euro. The euro is simply icing on the cake. The Germans worked hard, very hard for their export success and it's now bearing fruit. They have stuff others want. This is oppossed to the southern, lazy countries that did nothing when the world economy was booming in the 2000s and they thought the party would last forever. Look up Agenda 2010. Seriously, and learn something. Germany is where they are today because they made the hard choices. Simple as that.

Nobody doubts Germany for the work they've put in to be in their current position, but they have been helped enormously by not having to float a national currency against the rest of Europe.

Likewise, nobody is blaming Germany for the misdeeds of Greece et al, but this is hardly about morality right now. This is about pragmatic action, and Germany is not taking it. Right now that is all that matters.

 

[Infohawk]

Some people here seem pretty confident that Germany has nothing to lose if the Euro fails. If the Southern European countries were to really be kicked out of the Euro, it's conceivable the common market would suffer.

 

[amyklai]

Some people here seem pretty confident that Germany has nothing to lose if the Euro fails. If the Southern European countries were to really be kicked out of the Euro, it's conceivable the common market would suffer.

Germany has plenty to lose if the Euro fails, but Germany also has plenty to lose if they give unlimited access to their credit card to the rest of Europe.

On top of that, there's this little problem that last fall the German constitutional court stated quite clearly that control over Germany's finances can only be handed over to Europe when there's sufficient democratic representation at the European level, which doesn't exist at the moment (according to the court). Which means either change the EU to transfer fiscal authority from member states to Brussels (which France vehemently disagrees with and which will take forever) or have a referendum in Germany over a new constitution that allows a permanent transfer of control over an unlimited amount of taxpayer money to Brussels without proper democratric structures and central fiscal control on the European level (which German voters will most probably never agree to).

It's not as simple as some make it out to be, as if Merkel would just have to change her mind and then immediately rainbows and unicorns appear in the sky, Keynes raises from his grave and gives her a clap on the shoulder and everybody's happy.

 

[werepossum]

Germany has plenty to lose if the Euro fails, but Germany also has plenty to lose if they give unlimited access to their credit card to the rest of Europe.

On top of that, there's this little problem that last fall the German constitutional court stated quite clearly that control over Germany's finances can only be handed over to Europe when there's sufficient democratic representation at the European level, which doesn't exist at the moment (according to the court). Which means either change the EU to transfer fiscal authority from member states to Brussels (which France vehemently disagrees with and which will take forever) or have a referendum in Germany over a new constitution that allows a permanent transfer of control over an unlimited amount of taxpayer money to Brussels without proper democratric structures and central fiscal control on the European level (which German voters will most probably never agree to).

It's not as simple as some make it out to be, as if Merkel would just have to change her mind and then immediately rainbows and unicorns appear in the sky, Keynes raises from his grave and gives her a clap on the shoulder and everybody's happy.

Wait - Keynes gave Merkel the clap???

I agree completely. Germany primarily has a manufacturing economy and is known for high quality, big ticket items. Spain primarily has a service economy; although its manufacturing has been improving over the last few years, Spain has 1/6 Germany's exports with 1/2 its population and roughly 1/2 its debt. PIIGS exclusive of Spain is comparatively even worse. These are nations based too heavily on consumption and too lightly on production, and while high taxation might keep such a nation's government relatively flush it won't build a fiscally sound economy. It would be insane for German voters to voluntarily continue working longer and longer and paying higher and higher taxes so that other European nations' voters can continue spending and retiring a decade or two earlier.

 

[Dari]

It's not as simple as that and I'm unaware of any credible independent source that would make such a ludicrous claim as you are making now. You need to go learn something about international trade.

Germany most certainly has benefited from internally cutting its labor costs. It also is hugely benefiting from de facto currency manipulation. Spain, as an example had lower public debt than Germany did going into the crisis as well as a lower deficit, by any measure a more fiscally responsible government going into this crisis. How's that working out for them?

And what about their labor market? ANd what about their economy? What was it dependent upon? Look at the British, 7 years ago they were laughing at the Germans, criticizing them for still making money by "bashing metals". Now the British are in a recession and Germany is doing well. Germany is not manipulating the euro for their own sake. In addition to the hard work they've done over the past 12 years, they have bad memories of out of control inflation 80-90 years ago and don't want to return to those bad old days. That is why they don't want to write a blank check to the stupid and lazy.

 

[Dari]

Nobody doubts Germany for the work they've put in to be in their current position, but they have been helped enormously by not having to float a national currency against the rest of Europe.

Likewise, nobody is blaming Germany for the misdeeds of Greece et al, but this is hardly about morality right now. This is about pragmatic action, and Germany is not taking it. Right now that is all that matters.

OK. Fair enough. Ther Germans will bail out the lazy Greeks, and others, if they all agree to give up more sovereignty to Brussels. More bailout for less control of their economy. Sounds fair to me but the lazy and stupid don't want that. They just want a bailout so they can do the same shit again and again.

EDIT: Amyklai beat me to it.