Germany and the Euro

Germany and the Euro

• Unemployment has reached over 4 million in June
• -Major companies have collapsed putting thousands of jobs at risk e.g. Babcock Borsig
• Some economists believe the Deutschmark was 20% overvalued
• -German economic model is unravelling

• Problems

• In the euro debate suggests Germany could bring back a new DM
• Study by Dr Colligon- DM would have been even weaker without the euro
• Euro weakness is a continuation of the previous DM trend.
• DM has been depreciating since 1995

• Germany and the Deutschmark

Conclusion

• Germany’s economic problems stem from the vast differences between the economies of West and East Germany
• Reunification has changed Germany’s relations with the EU, and has paved the way for Central and Eastern Enlargement
• The adoption of the Euro has enhanced problems inherent in Germany’s economy