Forget Greece, Germany Should Leave the Euro…

So says Joachim Starbatty in the NY Times:

The Greek crisis is only the first of what could be several tremors resulting from the euro’s original sin. While few are willing to say it yet, the solution is clear: the only way to avoid further harm to the global economy is for Germany to lead its fellow stable states out of the euro and into a new and stronger currency bloc.

If Germany were to take that opportunity and pull out of the euro, it wouldn’t be alone. The same calculus would probably lure Austria, Finland and the Netherlands — and perhaps France — to leave behind the high-debt states and join Germany in a new, stable bloc, perhaps even with a new common currency. This would be less painful than it might seem: the euro zone is already divided between these two groups, and the illusion that they are unified has caused untold economic complications.

A strong-currency bloc could fulfill the euro’s original purpose. Without having to worry about laggard states, the bloc would be able to follow a reliable and consistent monetary policy that would force the member governments to gradually reduce their national debt. The entire European economy would prosper. And the United States would gain an ally in any future reorganization of the world currency system and the global economy.

Does this make any sense?

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About David Beckworth 240 Articles

Affiliation: Texas State University

David Beckworth is an assistant professor of economics at Texas State University in San Marcos, Texas.

Visit: Macro and Other Market Musings

1 Comment on Forget Greece, Germany Should Leave the Euro…

  1. angella mercel manages to cause a serious antieuropean atmosfere in greece and all the social classes to loose money from their income

    on the one hand karatzaferis suggests to
    greeks not to buy german and germanphonic products
    and to make an ebargo in the european products
    by the monkeys of europe that when ancient greeks had civilisation the europeans were at the branches of the trees and they ate leafs

    on the other hand merkel suggests that greece should declare at first bankruptsy and she will decide later what she is going to do with the greek problem like she is the scarlet o hara
    from gone with the wind

    both parts are totally wrong according to my opinion

    all the measures that the greek government took under the pressure of brussels reduce further the incoms and the salaries of the middle social class and the greek capitalists will loose significant profits by the reducement of the salaries of consumers and many businesses will close

    so the measures that took the greek government are unfair and they damage the unity of the greek society . the irony is that european comittee is responsible for the bad seconomic situation of greece because they decided greece to be a member of eurozone and that had as an impact greeks to loose the half of their moneys
    and their salaries
    ofcourse the very bad economic administration the last 10 years lead greece in this situation
    but this has only to do with the public area

    not for the small salaries of greeks

    in 2000 greeks took as a salary 1000 euro but their value was like they took 3000 euro
    in 2010 greeks took 600 euro that means
    in real tearms like they are taking 300 euros

    so the european leaders and the greek politicians manage to reduce the salaries of greeks from 3.000 euros in 300 with the entrance of greece in eurozone

    european leaders could not understand that greeks lost the
    half of their income

    with their decision and it is time to take up their responsibility for their mistake
    i give this analysis which is true because european leaders do not know where is the greek capital city

    they live in the versailles of comission
    and the greek nation is furious with comission
    and the greek government

    http://www.arelis.gr
    it contains erotonomicon that socked greek society and which critisizes very hardly the

    european colonialism and imperialism in all of its forms and the poem new york olympia

    unsuitable under ages of 18

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