While France, Italy and Spain post dreadful service figures, Germany thrives. Should the eurozone try football-style leagues?
It cannot be long before economists in France, Italy and Spain contemplate a vision of the eurozone without Germany. The heartfelt plea on Tuesday from French president François Hollande for a lower exchange rate illustrates the power of the German economy and its influence on the euro.
Nearly all the major economies of the eurozone are heading in the same direction as Portugal and Greece. Surveys of the services sectors in France, Spain and Italy on Tuesday were shocking, and must lead to higher unemployment and lower GDP growth over the coming year.
Paris, Rome and Madrid need to retain their export markets but, as Hollande's intervention shows, they are panicked that a high euro will raise costs and encourage customers to turn away.
Germany, on the other hand, is thriving. In Berlin the euro is a huge benefit. It is cheaper than the Deutschmark would ever be. And small rises have so far failed to dampen the Chinese lust for high-end cars and industrial equipment.
Overall, the gains of membership far outweigh any costs that might be borne in the future from loan write-offs to Greece, Ireland and Portugal.
It was said at the height of the Greek crisis in 2011 and it will be said again. The outlier is not Greece but Germany. The Finns and Austrians will disagree because they also benefit from a euro that is cheaper than any of their hypothetical currencies, though that is an argument for letting them spin off into a separate northern currency zone with the Germans, and possibly the Dutch and Belgians (though they would be deluding themselves if they thought their workers/managers could keep pace with the Germans).
Maybe the euro currency issue could be resolved with football league-style divisions. A premier league and championship with different exchange rates. France would spend its first season in the championship vying for promotion, while Belgium and Holland battled relegation from the premiership before they all settled into their respective zones. And the UK? Exporters would gain an edge against German companies, which would find themselves in the same situation as the Japanese.
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