Well, the German Finance Minister couldn’t have been much clearer than this. As I mentioned previously, Germany has every reason to make the Euro work and it looks like the Germans plan to vigorously defend this currency system which has resulted in great prosperity for the Germans and utter misery at the periphery. In an interview over the weekend Germany’s Finance Minister Wolfgang Schaeuble warned about betting against the Euro:
“Those who bet their money against the euro will have no success… the euro will not fail. The euro benefits us all and we will defend it successfully.”
Those are disingenuous comments at best. Yes, the single currency system benefits the primary export nation within such a system, but it also imposes inherent constraints on trade deficit nations. That’s coming home to roost in the form of bloated budgets, imbalanced economies and mass unemployment. The Euro is only great for all during the boom. During the bust it is an utter catastrophe for a smaller, less diverse nation which cannot devalue its currency. The Germans, of course, have little sympathy for those on the periphery. After all, allowing a periphery nation to defect would directly impact the German banking system and disrupt their boom. But fear not. The Germans won’t let it happen:
“If even a smaller country were to drop out, the consequences would be incalculable. I think of the Lehman bankruptcy when I say this: we must not make the same mistake twice.”
Excellent. So we impose austerity and depression on these debt ravaged nations, give them no means to defend themselves and essentially try to trick them into believing that what’s good for Germany is good for all of Europe? In a world that puts people before bankers there would almost certainly be defections from the Euro, however, that’s clearly not the world in which we all reside. Mr. Schaeuble better pray that the periphery citizenry don’t ever catch on to the inherent flaws within the Euro and the fact that the single currency system is the primary reason why these periphery nations are all either on the brink of depression or in depression. After all, if they did catch on, they might just tell those German banks to take a hike.