Germany Should Leave the Euro Zone

There are three strong arguments for why Germany should leave the euro zone.

First, the legal framework of Europe’s common currency has been corrupted to the core. The protective measures of the Maastricht treaty -- limited budget deficits, prohibition of bailouts and the ban on state financing via the money press -- have all been breached. The resulting climate of illegality is unacceptable for anyone believing in the rule of law.

Second, clinging to the euro would be costly for a Germany that has already spent billions to support insolvent member states like Greece. The counter-argument -- that a German euro zone exit would depress exports -- may be valid for individual exporters but not for the economy as a whole because it makes no sense to export on credit when the credit is ultimately repaid by the German taxpayer.

Third, adherence to the common currency is apt to poison Europe’s political atmosphere all the more. In my view, this is the most important point. The euro has been introduced primarily as a peace project intended to sponsor coherence and team spirit. In this respect, it has turned out to be counter-productive because European comradeship was pretty good in the decades preceding the euro, whereas today we have become accustomed to seeing Angela Merkel compared to Adolf Hitler. Conversely, German citizens have become increasingly suspicious of their Mediterranean fellows.

Economic history shows that intergovernmental monetary unions, as opposed to unions within single countries, have never survived. And they have regularly been terminated by exits of the strong member states, not exits of the weak. Investors believing that Germany will bail out insolvent states indefinitely are liable to incur major losses once large debtors like Spain, Italy or France belly up.

After all, international law is soft law, and Germany will discontinue its euro membership as soon as this seems advantageous.

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