Suppose Angela Merkel has a press conference, and announces that the German Central Bank will no longer transact its functions in euros-it will go back to the Mark:
“dear friends, we have reached the painful conclusion that Germany (alone) cannot rescue the euro. From this date forward, the Federal Republic of Germany will revert to its former currency, the DMark.
We wish all of our friends in the Eropean Community the best of luck, in managing their affairs”
So what happens next? Would the “PIGS” announce thier intention to abandon the euro as well? What would France do?
Could you make a bundle of money shorting the euro? Or would central banks be forced to accept them for some time, at some fixed rate of exchange?
[moderating]
Moved from General Questions to In My Humble Opinion.
[/moderating]
You called?
- My user name would become relevant again! Hooray!
- Most Germans probably wouldn’t notice the difference - I know many older Germans still call the money “Marks” instead of “Euros” simply out of habit. All they know is that when it went from “Marks” to “Euro”, everything got more expensive, quickly - at least that is their perception.
- Got nothin’ - hello Opal. Wait! Got one. Opel cars might cost more in smaller European countries.
[quote=“DMark, post:3, topic:562186”]
All they know is that when it went from “Marks” to “Euro”, everything got more expensive, quickly - at least that is their perception./QUOTE]
That’s my perception as well; things seemed to cost more across the board, even when the Euro was only about 80 cents. (in $USA)…
Are you hypothesising that Germany would leave the EU as well as the euro? I suppose some might argue that in the long run it would amount to the same thing. But I think people who have mooted the idea of Germany reverting to the mark are not talking about Germany leaving the EU altogether. Both seem hard to imagine, but the second seems almost inconceivable unless the EU completely breaks up, which Germany wouldn’t initiate.