Germany, Not Greece, Should Give up the Euro

This article originally appeared at Gegenfrage. Translated for RI by Mihajlo Doknic

In the media there is frequent talk about "Grexit", meaning Greece leaving the Eurozone. All just eyewash...? ‚The anchor that is dragging down the European Economy is Berlin, not Athens’, the magazine CapX is writing. "It’s time to kick Germany out of the Eurozone", says the headline of the article.

Last year, Germany had a record-breaking export surplus of some 217bn Euros, second only to China. Germany is the "growth engine" of the Eurozone economy, at least according to theGerman finance minister Wolfgang Schäuble. European economy is in ruins, only Germany is a bright spot. "The best way to end this perverse situations is, if Germany left the Eurozone", so the magazine states.

"The crisis in the Eurozone is often called a debt crisis", the article continues. "Indeed Europe as a whole has a debt problem, however, it is an internal debt problem: Germany’s surplus and the increasing debt in Europe’s periphery are two sides of the same coin...So, what to do? The best solution, though the most unlikely one, is: Germany leaves the Euro and re-introduces the D-Mark."

The Euro would indeed gain value should Greece leave the Eurozone. Countries like Spain, Italy or Portugal would come under great pressure and would soon follow the Greek example. In case of a German exit, the Euro would depreciate, which would be in the interest of the south European governments. The new D-Mark would probably massively gain in value, however, the Japanese example shows, "that a strong yen poses no threat to a structural trade surplus", according to CapX.