What If Germany Left To Save The Euro, And Itself ?

           There are increasing signs that Germany is making emergency preparations in case the country feels it has no other choice but to leave the Euro and go back to the Mark. Although Angela Merkel is officially 100% committed to the ideal of a united Europe, behind the scenes Germany seems to be preparing for the possibility that it might have to abandon the Euro.If Germany leaves the Euro, some economists predict that the value of the currency would fall by as much as 50%. The Mark, on the other hand, would rise significantly against the Euro.

The reason for this is the ongoing debt crisis in some of the smaller EU nations. This week Eurozone finance minister will once again meet to make a decision on whether Greece has satisfied the condition for its next bailout loan.                                                                                                                                                 TrimTabs Investment Research said today that the only practical solution to the debt crisis in Europe is a breakup of the Eurozone.  TrimTabs warned that Germany needs to salvage what it can financially and leave the Eurozone as soon as possible.

“At this point, there aren’t any good solutions to the Eurozone debt crisis,” said David Santschi, Executive Vice President of TrimTabs.  “The debt buildup is so large and the market pressure is so intense that it’s now a matter of choosing the best of bad options.”

TrimTabs argued that the best case scenario would be for Germany to exit the Eurozone before the peripheral countries, establish its own strong currency, and salvage what it can financially.

“If Germany exits the Eurozone first, it would suffer big losses on its euro-denominated holdings,” said Santschi.  “But if Germany doesn’t exit and keeps playing the bailout game, it’ll be dragged down along with the rest of the Eurozone, and the global economy will be much worse off.” “I’m not aware of any arrangement like the one in the Eurozone that’s worked well for a long period,” says Santschi. 

TrimTabs dismissed other widely advocated solutions to the Eurozone debt crisis as unrealistic.  More bailouts and more money printing will not end the crisis because they cannot resolve the solvency issues at the root of it, and more European integration is not possible quickly enough.