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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.)