Germans consider life without the euro
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David Brancaccio: A lot of ink has been spilled and much airtime devoted to what might happen if Greece were to leave the eurozone. But here’s a thought-experiment. What if Europe’s strongest economy decided the currency union was too much of a hassle?
Caitlan Carroll reports from Berlin.
Caitlan Carroll: Martin Thiel runs a secondhand shop in Berlin. He’s got a ton of children’s clothes and some old laptops.
Thiel says many Germans are buying more secondhand stuff because they’re trying to save money. They’re nervous about the impact of the euro crisis. And the steady drumbeat of disastrous news from Spain and Greece does nothing to lift peoples’ spirits.
Martin Thiel: I don’t know who should pay these things now for the banks what for the mistakes they make because Germans, we cannot pay everything.
Many Germans feel that way. In a recent poll, more than half said they want to get rid of the euro and return to the Deutschmark.
Ferdinand Fichtner is chief economist at the research institute DIW in Berlin. He says if Germany exited the euro, there would be big ripples. Investors would assume that the eurozone was dead.
Ferdinand Fichtner: And they would probably take the money out of the other European economies and would put it into Deutschmarks.
Sounds great. Except a higher-valued Deutschmark means it would cost more for other countries to buy Germany’s products.
Fichtner: And that in the very short run would probably imply that our export industry in Germany would effectively fall apart.
Not so great. That’s why when it comes to discussions about ‘exiting the euro,’ Olaf Boehnke from the European Council on Foreign Affairs says:
Olaf Boehnke: To be very frank, I think this is cheap talk.
Boehnke says Germans need to remember that the euro is not just a currency — it’s also about political and cultural integration. It’s about not having to exchange money at every border and being able to travel around with ease.
He thinks Germans might start remembering that as they head south for their summer holidays.
Boehnke: So I think when people start to think of hey the owner of this little hotel at the Greek beach. He has not such a decent life these days actually. And they already develop this kind of awareness that something went wrong and there’s a need for reform.
And maybe that awareness will mean fewer looks back to the Deutschmarked past and more faith in the future of the euro.
I’m Caitlan Carroll for Marketplace.
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