Interesting thoughtFebruary 1, 2010 Tim WorstallEuropean Union9 CommentsAmbrose EP…….instead of Greece being forced out of the euro, why doesn\’t Germany leave? previousRock ChoirnextLabour and co-ops 9 thoughts on “Interesting thought” Onlooker February 1, 2010 at 10:35 am For decades, Germany has been a key advocate and supporter of extending European integration. If they were to change their minds about that, the consequrences could be momentous. ambrose murphy February 1, 2010 at 11:01 am Actually he says “Germany and its satellites” in one place, and then refers to “Germany-Benelux” a bit later, which tells me he’s got a catchy idea he hasn’t thought through – the Belgians and the Dutch would have to think long and hard, and he doesn’t mention France at all. Widen it just that necessary bit (i’m hard pushed to believe Germany can afford the damage of unilaterally dumping Beneflux in the scheisse) and you’re really talking about a negotiated end to the euro: just not politically possible. But catchy, yes, defintely. Brian, follower of Deornoth February 1, 2010 at 11:42 am I’m sure Germany will come round to the idea when they realise the rest of Europe is sticking thieving hands into their pockets. Ed February 1, 2010 at 12:26 pm Perhaps Germany should adopt the pound instead of the euro? 🙂 Matthew February 1, 2010 at 3:33 pm Ok, so the argument is that Greece cannot pay its debts (not obviously true but let’s run with it) , the international capital markets are worried about it defaulting, so what it should do is devalue its currency enormously and pay back loans in that currency. Why isn’t that default? Gene Berman February 1, 2010 at 9:08 pm Matthew: You’re correct–it IS default–just by another name. AJ February 1, 2010 at 9:38 pm Matthew and Gene Am I being thick? Greece doesn’t have it’s own currency anymore, it has the EURO and can not devalue hence all the problems. Matthew February 1, 2010 at 11:01 pm A little. The proposal is that Greece leaves the euro and has a new currency which is worth a lot less. AEP’s suggestion is similar, except Germany leaves the euro and it is the euro that is devalued. vimothy February 4, 2010 at 2:15 pm The EMU needs a federal level debt instrument. The constitutional cap on deficit spending is plainly idiotic. The ECB is far too hawkish. (People who think that “austerity measures” are necessary are basically liquidationists and should in no circumstances be given control of a CB). Germany is running large current account surpluses with other Euro states that require off-setting deficits. All well and good, perhaps, in a floating exchange rate regime, but the EMU is certainly not that. Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment Name * Email * Website Save my name, email, and website in this browser for the next time I comment.