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German Exporters: Keep the Euro

[1]

SS Protege Ludwig Ehrhard: Father of "German Economic Miracle"

COMMENT: Much consternation has been expressed by Germans frustrated with having to bail out weaker EMU economies. What has received less attention is the fact that Euro was predictably weak. That weakness has kept the price of   German exports low, boosting their economy to a level unmatched since the early 1990’s.

This fact alone, makes it unlikely that Germany will be leaving the currency union anytime soon.

“Why Germany and its Automakers Won’t Let the Euro Collapse” by Neil Winton; Detroit News; 11/27/2010. [2]

EXCERPT: . . . . The reason: German industry in general and its automotive business in particular benefits massively from being a member of the E.U. and using the euro to price its exports. If the euro collapsed and Germany had to revert to its old currency, the mark, its auto industry would take a price hit of perhaps 25 percent. If Germany was forced to revert to the mark, car manufacturers would quickly move production out of high-wage Germany, causing huge unemployment. To a degree this is happening already, but it would become a disruptive and politically unacceptable stampede if the mark was called off the bench and the euro dumped.

“Whether Germany is willing to pay more for more bailouts ultimately depends on whether German politicians can sell this to the German people,” said professor David Bailey of the Coventry University Business School.

“There is a good argument (for Germans) for supporting peripheral Eurozone countries because Germany — via the euro — has had a huge boost to its competitiveness,” Bailey said.

Even before the euro, when Germany’s currency was the mark, the country racked up huge trade surpluses. After it joined the euro on Jan. 1, 1999, it was presented with an effective devaluation, although this has fluctuated over the years as it strengthened and weakened against the dollar.

“With the euro it has run huge trade surpluses but its currency was fixed via its euro zone partners, giving it at least, say, a 20 to 25 percent competitiveness boost. No wonder German manufacturing — and its car making industry — is doing well and why Germany would want to stay part of the euro zone,” Bailey said.

While many major global economies are struggling to move out of recession, Germany has been booming. Germany’s gross domestic product in the third quarter rose a net 0.7 percent and by 3.9 percent compared with the same period of 2009.

Economists called this an export-led rebound, and said things would get even better for Germany because the nervousness surrounding the euro was weakening the currency and boosting its sales outside Europe. . . .

COMMENT: Indeed, the European Monetary Union is the realization of a plan for German world domination developed in the mid 19th century by Friedrich List. Its implementation followed upon the German economic conquest of Europe [3] during World War II; its realization concisely  forecast by journalist Dorothy Thompson in 1940.

Dorothy Thompson’s analysis of Germany’s plans for world dominance entails implementation by the creation of a centralized European economic union. Ms. Thompson was writing in The New York Herald Tribune on May 31, 1940!

“The Germans have a clear plan of what they intend to do in case of victory. I believe that I know the essential details of that plan. I have heard it from a sufficient number of important Germans to credit its authenticity . . . Germany’s plan is to make a customs union of Europe, with complete financial and economic control centered in Berlin. This will create at once the largest free trade area and the largest planned economy in the world. In Western Europe alone . . . there will be an economic unity of 400 million persons . . . To these will be added the resources of the British, French, Dutch and Belgian empires. These will be pooled in the name of Europa Germanica . . .”

“The Germans count upon political power following economic power, and not vice versa. Territorial changes do not concern them, because there will be no ‘France’ or ‘England,’ except as language groups. Little immediate concern is felt regarding political organizations . . . . No nation will have the control of its own financial or economic system or of its customs. The Nazification of all countries will be accomplished by economic pressure. In all countries, contacts have been established long ago with sympathetic businessmen and industrialists . . . . As far as the United States is concerned, the planners of the World Germanica laugh off the idea of any armed invasion. They say that it will be completely unnecessary to take military action against the United States to force it to play ball with this system. . . . Here, as in every other country, they have established relations with numerous industries and commercial organizations, to whom they will offer advantages in co-operation with Germany. . . .”

Germany Plots with the Kremlin by T.H. Tetens; Henry Schuman [HC]; 1953; p. 92. [4]

COMMENT: Writing in the 19th century, Friedrich List posited the idea of German-dominated central European economic union as a vehicle for establishing German economic and imperial superiority to Britain, Germany’s top geopolitical rival. List’s formulations are the basis for the German-dominated European Monetary Union. List understood that economic control led automatically to political control. That awareness is central to an understanding of the operations of the Bormann Capital Network [5].

“Many of the major elements of economic imperialism were enunciated in the 1840’s by the ubiquitous Friedrich List. List argued that overseas colonies were needed to supplement his favorite scheme for economic development: a central European economic union. He foresaw an economic organization with an industrialized Germany as its center and a periphery of other central and eastern European states that would supply food and raw materials for German industry and would purchase German industrial products. A semiautarkic structure would thus be created; it would have the advantage of permitting control, or even exclusion, of British competition, thus allowing central Europe to industrialize successfully in an orderly, planned manner.”

(The Ideological Origins of Nazi Imperialism; by Woodruff D. Smith; Copyright 1986 [SC]; Oxford University Press; ISBN 0-19-504741-9 (PBK); p. 30.)