Germany: Pining for the Deutschmark

Discontent with the euro began in May after the bailout of Greece and rose again last month with the European bank's rescue of Ireland.

Germans are nostalgic for their old, solid currency, the Deutschmark, said Marc Beise in Munich’s Süddeutsche Zeitung. Rumblings of discontent with the euro common currency began in May, after the European Central Bank and the International Monetary Fund bailed out bankrupt Greece. The European bank’s rescue of Ireland last month, which is likely to cost German taxpayers more than $100 billion, has pushed the issue to the surface. Ireland, shackled to the euro, couldn’t devalue its currency to lower its debt burden, so it was forced to turn to other European Union countries for help. Now, with Spain, Portugal, and even Italy teetering on the brink of bankruptcy, “the debate has begun in earnest” over whether to kill the euro.

“Germans never wanted the euro in the first place,” said Jeremy Warner in the London Telegraph. Opinion polls in 1999, when the common currency was adopted, showed a strong majority against it. Even the German politicians who agreed to monetary union did so only with great reluctance. “It was thrust upon them as the price that the rest of Europe demanded” for supporting the reunification of West and East Germany. So it’s no surprise that a leading German industrialist has now proposed splitting the euro into two currencies—a “northern euro” to be used by Germany, Scandinavia, and France, and a “southern euro” for the struggling Mediterranean countries, which would be free to devalue it as needed. The problem is that the northern euro, essentially just another name for the Deutschmark, would be much stronger than the current euro, and therefore Germany’s export industry—the engine of its economy—would suffer due to high prices for German goods. Germany’s miraculous growth and low unemployment would soon be a thing of the past.

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