2012年6月19日星期二

Of the exit in the euro area is Germany, not Greece (Bloomberg)

Greece's exit from the euro all the pros and cons of the debate, in fact, to no avail. From an overall consideration, the German exit may only make the form of improved


Unless European leaders to take more radical measures, such as adopt and implement the many reforms of, or the monetary union will fall apart.

Greece, Ireland and Portugal, the problem has spread to the euro zone's fourth largest economy, Spain, perhaps, the next step is to Italy. Other members of the monetary union can not all pay for them. Continue to borrow debt problems will only make matters worse, the intensification of the strong hostility of the North and South. The economy is not healthy growth, Europe is in recession, many countries will have to re-adjust the external debt. Greece two years of painful restructuring experience tells us that if there is a slight possibility of adjustments, it is extremely difficult.

In this case, the Greek out of the euro will make the situation worse. Did not present a mechanism to determine who will be the next exit, even assume Greece's exit as practicable. This may cause even more dire consequences, that is the other crisis-stricken country, so panic unable to extricate themselves and have to withdraw, leading to bank runs , business failure, and overall confusion. Accompanied by hundreds of billions of euros of debt non-payment will allow Europe and the German financial system is overwhelmed. Chain reaction at any time from heaven, to feel insecure, and the global economy will be paralyzed.

  If Germany is out of the euro

If it is Germany's exit from the euro, the situation would be how? Integration and frequent reorganization is unlikely to be the exit of the weaker member states is also worrying, Germany exit may be many choices of the most promising one.

A simple, strong countries can cause panic relatively quick implementation of an exit plan. Do not have to tangle who quit and who did not. German exporting countries, the euro will be a sharp devaluation, but it will not become like the ancient Greek silver coins re-issued as essentially worthless currency. Depreciation of the euro As a result, the exit and devaluation of the Greek relative seems no sense, it does not occur panic spread or a bank run. In addition to the idea of soaring cost of the new exchange rate will allow the non-euro area financial asylum, and move funds also face be forced to redeem the cost of devaluation may, therefore, Southern Europe depositors will not move runs

Germany's exit will bring immediate benefits to the rest of the euro area countries. Currency devaluation will greatly enhance their trade competitiveness - According to many observers say, this is precisely the south of those weaker countries most in need. The euro area balance of payments situation has improved, so that they have the necessary funds to pay the foreign debt. This will benefit the entire euro zone, and weak country after another exit, opposite of bear more roll the greater the pressure on each of the collapse of the results

Relatively stronger countries, such as the Netherlands, the German exit may not follow suit. If they pulled out, not only lost the advantage of the depreciation of the currency trade, will have to face the introduction of all the costs and complications of the national currency.

Of course, the depreciation of the euro is very unfavorable to foreign investors who hold assets denominated in euro. Reassuring, these losses will be shared equally at the same time to the creditors, but also in southern European countries than in the exit from the euro program seems much more moderate.

The vital interests of

Of course, the problems is not just around the currency. Such as Spain's real estate industry bubble burst, and its impact on banks. Currency devaluation may attract foreign capital injection. However, the government may need a number of European banks suffer from the depreciation of the euro and the dual problems of bad assets bailout. Greece and other countries may also need to work together to support. German management should implement the assistance: his exit is not damage to his vital interests of the European economies have to the survival and sustainable development
Opinion polls show that most of the German willing to matter to restore their old currency. Germany has not spared its negative impact. With the new exchange rate for German products in overseas is very expensive, German exports will be greatly reduced. Also been criticized because the departure from the orthodox trend of European unity after World War II.

However, this is a bold move to avoid immediate disaster, does not necessarily mark the end of the European integration process. Well-known example is that the choice of the revolutionaries in the United States: "Deserters today is for tomorrow to do a better soldier," they had the last laugh. 12 states the federal Constitution is the first step of the League of the United States try, though without success, but not later for the purposes of the Constitution of the United States laid the foundation for brilliant achievements.

It is true that the withdrawal of Germany is to lay the foundation for the future to build a strong alliance. The euro-zone member countries draw lessons and face up to economic reality. In the second round of the integration process, they would perhaps behave better.

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