November 18, 2010
“We must strengthen the euro” were the closing words of Josef Ackermann, CEO of Deutsche Bank, yesterday in Brussels.
“Our competition is the big trading blocks”, thinking of the USA, China, etc, “and to compete we need to find European answers”.
Minutes later he was backed up by Dr Jorg Asmussen, State Secretary at the Federal Ministry of Finance in Germany. He was attending in a break from the ECOFIN meeting and explained that Germany is very reliant on a strong Euro and the stability of the currency. Therefore, Germany’s objective is for a strong euro. “We will only be strong as a strong Europe”.
Again, Dr Asmussen, “If Germany does not stick to the Stability and Growth Pact rules, no-one else will”. He suggested that in 2011, Germany will put the brakes on their debt levels.
That will certainly help. For now.
But unless every euro member does the same, how can the currency become genuinely strong? Can it be enough for Germany to be strong so the entire euro is? No, financialguy doesn’t think so either…
I know, enough already! There are no simple answers to any of this.
I just wonder when the time will come when Germany says, “Enough” and refuses to support other members. That day will probably see said member(s) torn from the euro in a painful, default and recession inducing humiliation.financialguy