While Germany is more than just very prosperous, some EUROZONE countries are struggling to break even. The perfect example is revealed by the balance of payments problems currently being faced by France compared with the huge surplus which Germany has at present !
Several countries in the EUROZONE are now still struggling even after having received Financial Aid and Loans at low interest rates.
Normally when countries face difficulties their currency is written down on Financial Markets. This has an immediate effect. Exports prices decrease which helps Export sales.
If ultimately a country cannot stop the depreciation of its currency, a devaluation results and the consequence is a reajustment of national internal policies. Then everyone suffers financially, both nationally and internationally.
The problem in the EUROZONE is that no country is permitted to "opt out of the EURO". This means that the benefit of increased exports, within the EU or elsewhere, cannot be obtained ! For example, selling more to Germany at lower prices or competing better with Germany on the export markets is just not possible !
Likewise, being more competitive at home to avoid imports from Asia or other low labour cost countries is not an option.
The basic principle of wanting to defend the EURO at all costs is wrong because it means that countries are not allowed to devalue ! This is the basic flaw in the system ! Ultimately, sooner or later, when Germany and its partners no longer have the means to support ailing partners, the Financial Markets of the World will react ! Also, the suffering of citizens will lead to social turmoil !
The dreams of a Federated United Europe based on the EURO will then be over !
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