EU SHOCK: ‘Victims of Euro’ Germany could SINK bloc by relaunching DEUTSCHMARK — Информационное Агентство "365 дней"

EU SHOCK: ‘Victims of Euro’ Germany could SINK bloc by relaunching DEUTSCHMARK

The eurozone

The study, written by Dr Robert Hancké of the London School of Economics in partnership with derivatives trading company IG, looked at what would happen were Germany to decide to quit the single European currency and go it alone one more – with potentially dire economic consequences.

It states: “As the strongest economy in the eurozone, Germany is the only country that can credibly leave the euro.

“Some German citizens and politicians see themselves as ‘victims’ of the euro, feeling that it forces them to prop up countries with weaker economies.

“If that feeling grows, a majority of citizens could vote in favour of a new deutschmark if given the choice.”

Germany’s departure from the eurozone would likely lead to the collapse of the currency and conceivably even the European Union as a whole

IG report

The research points out that Germany is the “economically dominant” country in the euro area, accounting for roughly 27 percent of the eurozone’s total GDP.

In addition, it has a general government budget surplus of approximately 1.5 million.

The report suggestions that a move to create a new German national currency would have “dramatic regional consequences” and would very likely to opposed by other 18 member-states of the EU who have adopted the euro as their currency.

The report suggests: “Germany’s departure from the eurozone would likely lead to the collapse of the currency and conceivably even the European Union as a whole.”

Eurozone

Germany’s departure from the eurozone would likely lead to the collapse of the currency and conceivably even the European Union as a whole

IG report

Most of the northern economies would probably turn their backs on economic and monetary union to join a new deutchsmark bloc, the report argues.

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The euro’s collapse would have a serious impact on the political consensus which has dominated Europe since World War 2.

Neither would Germany be immune from the fallout, because the launch of a new deutschmark, which would attract huge levels of investment with the result that other currencies operating in the now likely defunct eurozone would be depreciated.

As a result, this could have a knock-on effect on Germany’s exports, triggering a deep economic recession in the country similar to that witnessed in the early 1990s.

Emmanuel Macron Angela Merkel

Dr Hancké, Associate Professor of Political Economy at the LSE said: “The political will among European elites to keep the euro intact is, as we have seen since the Greek bailouts, very strong.

“Strong enough to bear the costs of the single currency – unless, that is, German voters and politicians begin to perceive these costs to be too lopsided.”

The warnings come on the same day Italian economist Ilaira Bifarini told Express.co.uk French President Emmanuel Macron’s plan to increase EU integration might be the bloc’s only chance.

He said: “Macron’s plan is the only solution for the European monetary union and the European Union as a whole to survive.

“We’re facing a crossroads.


“The EU can either go towards more integration, more risk sharing, and also towards more cohesion of economic policies and not only those monetary, or there can’t be anything other than an implosion of the euro system – which is proving to be no longer sustainable.

“So the options are two. More integration or a breakup.”

Mr Macron wants to create a stand-alone eurozone budget and a new EU finance minister with the aim of strengthening economic and monetary union.

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