will germany continue to bailout eurozone? - Page 2

Originally posted by: King-Anu

looks like Miss Lonely0planet is busy solving world's economic problems. lol.

unfortunately i have no idea what this topic is about. however Mr. Num and Mr. Wine are on the task.

Originally posted by: BirdieNumNum

damned if they do, damned if the Germans don't bail out the PIGS and others.

first some history. The Germans were amongst the biggest beneficiaries of a common currency (ECU). They went from a deutsche mark (DM) that was north of 1.60 to a relatively cheaper ECU. It made their industries more competitive, drove up their exports, and allowed them to amass billions. They then turned around and started extending loans to the PIGS.Of course, the Greeks and the rest were only to happy to dodge taxes, lead a lazy mediterranean life, have off-shore money, and let the Germans invest into their countries.

It was going great till the US sneezed. That's when europe caught a cold, and banks such as Deutsche bank that were minting money started having a tough time (they currently fall way short of Basel III capital requirements).

so if you look at it from both an ethical and an economic standpoint, the Germans should/ will have to pony up.

meanwhile, Merkel is in a bind. If she doesnt bail out the eurozone, the german economy takes a dive too and she also exposes German banks such as DB to bad loans. If she forks over the cash, she's seen as spending it on the lazy Greeks and the Italian cheats.

as for France, dont even get me started. They are a socialist country, withe verything from education to health paid for by the state. They wont be able to compete ion their own.

bottom-line, let's not be naive in thinking that politicians and economic policy makers havent thought through much of this.Of course, their response has been plodding and it has made matters worse because of their indecisiveness. It has kept markets on edge for example and by introducing uncertainty, it has jacked up risk premiums. But If the Germans continue to bail out the euro-zone, it's not because they are trying to be good samaritans..That assumption would be the height of naivete. 😊

if you want to keep digging history then should also know that after world war II Allied forces (US, UK and former Soviet) forced Germany's industrial disarmament and moved those industries to their home countries. US is guilty of stealing German patents(between 1945-1950) and using these for own industries. "U.S. pursued a vigorous program to harvest all technological and scientific know-how as well as all patents in Germany". It was estimated to be of amount $10 billion(60 years ago). Does it mean US should also help with the bailouts 😉? and no one cares whether you sympathize with germans of not.