trollcatman wrote:
I expect the opposite to happen possibly, Germany remaining in the Eurozone but the weaker states dropping out of it and re-adopting their old currency. I think it would have been a better idea not to force every country to adopt the euro as soon as they meet the criteria. It definately makes sense for some countries, for example in the Netherlands the guilder was pegged to the Dmark long before the introduction of the euro in 2002, because most of our trade is with Germany. We will probably follow Germany whether they stay or go.
I just saw on the news Siriza won an absolute majority in Greece. Interesting times.
My prediction is that the EU won't fall apart but just stumble on in their own half-assed way. Some new countries join, maybe some even leave, but in the end no one really cares.
Yeah, I think you're probably right, at least in the short term....
But here's the thing. Even if countries like Germany and other stronger northern European states stay with the euro and the weaker, southern European countries drop out, it will still change the value of the euro.
In the long term I'm betting the euro would be much stronger, and that would still hurt German exports. Having those southern 'weak sisters' in the eurozone helps to keep the euro weaker without overt currency manipulation (like China is always accused of).
At any rate, if countries start withdrawing from the eurozone, it's gonna hurt everyone. I think it will hurt the northern countries more than they realize (in the short term).
If they're smart, they will look into forgiving debt and adopting a more pro growth economic policy for southern Europe.
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No man is free who is not master of himself.~Epictetus
25 Jan 2015, 10:25 pm
