Germany to return to the Deutschmark?

Interesting report on Newsnight last Tuesday. It reported on the trouble with countries such as Ireland, Portugal, Greece and Italy who have massive debt levels. As we're seeing with Ireland, the country is on it's knees and desperately seeking financial help. There is concern that the problems with Ireland and these countries will affect the value of the Euro. Economists hope that the economic strength of key Euro countries such France and Germany will help subsidise the Euro.

Germany in particular is a key country, it reported GDP growth of 3.9% in the last 3 months and this pushes the strength of the Euro. Interestingly the report highlighted that such is the growth of Germany that it is making the Euro too expensive for the countries that are struggling. As the Euro value increases, exports are being less and the cost of living rising.

One way to combat this would be to allow Germany to leave the Euro, this would then allow the Euro to fall in value making it easier for the struggling countries to start spending and be more lucrative to trade goods.

I thought this was a really interesting situation. Speaking to a couple of German friends, they would be more than happy to go back to the Deutschmark as they too believe the Euro is too expensive. Personally I would love to see the re-introduction of old currencies again, I think it brings charm and personality to a country although I understand the rationale behind a single currency, particularly for those living on the European continent.

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