Forget about Grexit - Germany should leave the Euro

EDITOR'S BLOG: We're getting closer to G-Day, so let's make it a Ger-xit.

by Matthew Gwyther
Last Updated: 31 Jul 2015

Greece. Some wit this morning tweeted: ‘I’m not cancelling the Greek holiday. I want my kids to see what a country looks like with Russell Brand in charge.’  All very amusing. Unless you’re trying to draw out enough Euros to feed your kids. Seeing as we’re currently staring into the abyss for the seventeenth time in the last few months I’m going to offer a modest proposal. Just going to fling something out there, put a finger into the air of the whirlwind, run a little thought up your flagpole.

Why doesn’t Germany get out of the Euro? There. I’ve said it.

All the problems inherent in a single currency since the start have been down to the fact that nobody understands sound money, the meaning of a proper day’s work and sensible housekeeping like Frau Merkel and her compatriots. Their levels of virtue are simply too much for the rest of us. We’ve known ever since Goldman Sachs cooked their books back in the late 90s that Greece was never going to make the grade. They’ve had a great run - the rest of us have paid for motorways, airports and contributed towards the millions who have retired in their mid 50s. But now everybody else is fed up.

A continuing austerity programme for the Greeks is madness - it’s like barber surgeons from the 17th century opening another vein in a helpless patient that is already near fatally anaemic. And the last thing someone dying from blood loss requires is a bunch of preening latter-day Marxist academics chucking their weight around.

Even if Tsipras and the Eurocrats had been able to come to some sort of agreement last week about debt repayment and fiscal adjustment what hope did it offer the Greek people? They’d still be stuck inside the same mad, unsuitable currency that would have destined their country to years more recession.

The Euro doesn’t work because it is trying to yoke together elements that are fundamentally incompatible. It’s an idea dreamed up by politicians and administered by lawyers. Fatal combo. In Kalamata they don’t run their business, their families, their tax returns, their lives like they do in Koln. And 15 years of being in the Euro with all its implied coaxing towards behavioural convergence has not worked. The end-of-party events of 2008 sealed its fate.   

But the most incompatible bit is now Germany, the German economy and German public opinion. It’s easy to forget that - without much reason - the average Kurt and Gerda on the streets of Hamburg is just as pissed off as those really unfortunate souls suffering in Lesbos. Greece has far more in common with Italy, Portugal and the Eastern Europeans than it does with Berlin. The fact is that Germany has done pretty well out of monetary union: somehow the rest of Europe keeps on buying BMWs and uber-efficient machine tools. Of course, the truth of the matter is the Germans are the only ones keeping this whole Euro-show on the road, so they should admit that fact and give up the ghost.

So rather than Grexit and kicking the Greeks out of the common currency, Germany should gracefully depart instead. Ger-exit. Start up on its own. And, maybe as the second most virtuous, most Germanic country in Europe we could consider joining the Germans in the new Deutschmark. Or maybe not.

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