Euro report whips up German storm
BBC News:
A political storm has broken out in Germany over reports that the government may be distancing itself from the European single currency.
Stern magazine said that Finance Minister Hans Eichel had been present at a meeting where the "collapse" of monetary union was discussed.
The government is planning to blame the euro for Germany's economic weakness, the magazine added.
The report was dismissed by both the ministry and Germany's central bank.
But it comes at a sensitive time for Germany, as the country gears up for a possible early general election following regional poll defeats for Chancellor Gerhard Schroeder's ruling Social Democrats (SPD).
Apparently, Germans are not too happy with the Euro:
Public dissatisfaction with the government's handling of the economy is one of the greatest challenges facing Chancellor Schroeder.
His ruling SPD/Green coalition is widely expected to lose a parliamentary vote of confidence, due to be held by 1 July, which would trigger a general election.
The euro is seen as a potential source of political conflict. According to Stern, some 56% of Germans want to go back to the deutschmark.
And dissatisfaction with the single currency has proved a potent topic in the campaign ahead of this week's Dutch referendum on the European constitution.
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posted by Adam Lawson @ 10:16 AM
1 comments
1 Comments:
"some 56% of Germans want to go back to the deutschmark"
Such data is more interesting if you know the reasons why people feel this way.
"dissatisfaction with the single currency has proved a potent topic"
Again, I wonder: What are the specific complaints about the euro? I remember hearing one anecdotal report that showed some prices appeared to have increased since the switch to euros, but have not really seen any convincing general studies about this, one way or another.
As for Germany, I think some of it may be due to what I can only call nostalgia -- i.e. there is a lack of a convincing, analytical argument as to why or how Germany has suffered specifically from the introduction of the euro. With so many factors affecting an economy as big as Germany's, it might be hard to pin specific effects on just the new currency.
At the beginning, it seemed like a bad idea for a technically sophisticated manufacturing nation like Germany to have the value of its currency tied to economies like those in Greece, Portugal, and even Spain (still a big net recipient of EU funds). But as it turns out it is Europe's bigger economies -- Germany and France -- that have consistently offended against the stability pact designed to safeguard the value of the euro.
In the end, it may be that the media feels it has to give some explanation other than the true one, which is that Europeans just have too many reservations about surrendering even more control and their sovereignty to the extra-national EU -- this plain truth is perhaps a little too "potent" to print.
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