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Germany’s Currency Nostalgia Is Badly Off the Mark September 12, 2012

Posted by proeconomia in Fiscal policy, Main, Monetary policy, News on Greece, On the crisis, Opinion.

An articlefrom Clive Cook @ Bloomberg, who has given us some interesting opinions in the past. Have a look at it. Here is an interesting excerpt of the truth of the thing:

“… But surrendering the deutsche mark (and before that, fixing their currency’s value relative to other European currencies) gave them an export performance and enormous balance-of-payments surpluses that they otherwise wouldn’t have enjoyed. And let’s not forget those surpluses were recycled as unsafe lending to Europe’s weaklings. It takes bad lending as well as bad borrowing to build a debt crisis. The bailouts that German taxpayers resent so bitterly were necessary partly to protect Germany’s undercapitalized banks from the consequences of their own actions. So far, the division of the burden of adjustment between bad borrowers and bad creditors has been much to Germany’s advantage. The Irish economy was crushed to keep creditors whole. Ask the Irish who has been treated unfairly.”



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