Financial Times
February 5, 2012
Angela Merkel has just been to Beijing, in a year when China is about to displace France as Germany’s largest trading partner. When that happens, it will be a symbolic moment. It will also encourage those currently posing the following question: should Germany detach itself from the eurozone mess and become a Bric – a mid-sized global economic power, like Brazil, Russia, India and China, whose initials constitute the Bric acronym?
I first heard the notion of Germany as a Bric from Ulrike Guerot of the European Council on Foreign Relations, who is vehemently opposed to the separatist anti-European tendencies in Germany. Probably the clearest expression of this idea came recently from Wolfgang Reitzle. The CEO of Linde, a German industrial group, said that Germany should consider leaving the eurozone. This might bring some short term pain, he acknowledged, but it would increase Germany’s competitiveness in the long term.
I have always found Germany’s obsession with competitiveness to be one of the deep causes of the eurozone crisis. The active pursuit of large current account surpluses has contributed to the eurozone’s internal imbalances. For a country the size of Germany, it may be feasible – albeit misguided – to formulate policy this way. For a large economy like the eurozone, it is unsustainable.
Something which falls short of an outright endorsement of a Bric strategy is the call for Greece and other peripheral countries to leave the eurozone. Klaus-Peter Müller, chairman of the supervisory board of Commerzbank, recently advocated this. Keeping the eurozone together is clearly no longer the priority of Germany’s business and financial establishment. In the 1990s, they were the monetary union’s strongest advocates.
More
No comments:
Post a Comment