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'Insane' euro departure 'would cost 200,000 jobs'

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'Insane' euro departure 'would cost 200,000 jobs'
Photo: DPA
11:21 CEST+02:00
Ditching the euro would cost Germany at least 200,000 jobs and half a percentage point in growth, according to a new study which concluded that Europe's biggest economy benefited from being within the eurozone.

Finance Minister Wolfgang Schäuble called the idea of Germany leaving the currency "economically insane".

Even if Germany were to have to write off the majority of the money it has put into the various euro rescue packages, the study from the Bertelsmann Foundation concluded, it would still be better off sticking with the currency than bailing out.

It is not only the large economic figures which benefit from Germany being in the eurozone, the study suggested - the average benefit from having the euro for individuals worked out at around €1,100 a year between 2013 and 2025.

The only benefits to be had from a separate currency would be a lower interest rate and thus cheaper production and investment costs.

The Bertelsmann Foundation stressed the study was based on modelling - and did not take into consideration the fact that if Germany were actually to leave the euro, it would probably lead to the collapse of the currency union and a global economic crisis.

"Germany's membership of the currency union reduces the cost of international trade and protects against severe currency exchange fluctuations," said Aart De Geus, head of the foundation. "A return to the Deutschmark would cause significant damage. The Germans would lose income and jobs."

Germany got its own eurosceptic party this year, when the Alternative for Germany (AfD) established itself with a call for the "orderly dissolution" of the eurozone.

It attracted the contempt of Finance Minister Wolfgang Schäuble would said the party "can't be taken seriously" and labelled its core demand "economically insane" in comments published on Sunday.

Schäuble told the Focus news weekly that in a narrow election race where every vote counts, "we will also deal with the AfD" and its message.

"We will not do so arrogantly but in the firm belief that a common currency is in Germany's interest," he was quoted as saying. "For Germany, it would be economically insane to leave the euro."

Asked whether he took the political newcomers seriously, he said: "I want to differentiate: I take seriously the concern people have about their money.

"But a party that is only against something can't be taken seriously. And it won't succeed in Germany."

AFP/DPA/The Local/hc

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