Unloved euro considered too valuable to ditch
The Local · 15 Dec 2010, 08:08
Published: 15 Dec 2010 08:08 GMT+01:00
- Berlin favours possible ECB capital increase (14 Dec 10)
- German ignorance of economics revealed (13 Dec 10)
At the end of June, with a fiscal crisis in Greece hammering the 16-country eurozone, a poll showed most Germans wanted to scrap the euro and bring back the beloved Deutsche mark, the emblem of their post-war economic might.
A more recent survey suggested the anti-euro faction had dropped to 36 percent, still a high proportion for Europe's biggest economy and founding member of the European Union.
"The euro has never really been loved in Germany," said Frank Engels, an economist at Barclays Capital, recalling it was dubbed the "teuro," a play on the German word for "expensive," in response to perceived rising prices.
Many Germans believe that Berlin is bailing out other eurozone nations seen as profligate at a time when Germany itself is undergoing painful austerity measures.
"More and more Germans fear they are going to have to pay for mistakes made by other countries in the euro area," said Martin Koopmann, a political scientist.
And daily Bild, the country’s largest paper, has often railed against Germany putting its hand in its pocket, recently asking: "Are we going to have to pay for the whole of Europe?"
A former head of the German employers' federation, Hans-Olaf Henkel, argued in a recent book "Save our money - Germany is being sold out" that the eurozone should be split between a richer north and poorer south.
However, for now at least, such voices are on the margins, although Finance Minister Wolfgang Schäuble this month warned of "the danger of an anti-euro party," which does not yet exist.
For Engels, the advantages of the euro for Germany's exports are clear. The common currency has "enormously lowered" the costs of trading with its main partners, the analyst said.
If the Deutsche mark were still in existence, its value would likely have soared against the currencies of other eurozone countries because it would have been seen as a "safe haven" bet on the foreign exchange markets.
But this in turn would have harmed exports, credited with pulling the German economy out of a deep recession suffered in 2009.
Conscious of growing anti-euro sentiment, German politicians have pulled out all the stops to convince their citizens of the currency's advantages - and the dangers inherent in a possible collapse.
"If the euro fails, then Europe fails," Chancellor Angela Merkel told parliament at the height of the crisis.
But the message is not getting through, argues Koopmann. "We need politicians who can get across the positive aspects of the euro, while explaining why, in times of crisis, you have to pay the price."