''Which country is the biggest gainer from the creation of the eurozone? My answer would be Germany. This view is hardly accepted in Germany itself. But such scepticism needs to evaporate. Not only is Germany a beneficiary, but it needs to recognise this far more clearly than now. Only then are Germans likely to support the reforms the eurozone needs.
The starting point must be that the crisis is not dead, but sleeping. José Manuel Barroso, European Commission president, claimed in his “state of the union” speech on Tuesday that “the economic outlook in the European Union today is better than one year ago, not ... least as a result of our determined action”. This is true. But confidence has definitely not been restored (see chart). Further shocks are likely.
So why, when confronting those shocks, should Germans accept that they have an overwhelming interest in the success of the eurozone? The immediate answer is that the economy is hugely dependent on exports for demand (see chart). From 2000 to 2008 external demand generated as much as two-thirds of the growth in overall demand for German output. Germany needs both captive markets and a competitive exchange rate. The eurozone has delivered both, to an inordinate degree: the crisis in the periphery has dragged down the value of the euro; and many of Germany’s eurozone partners (who absorb two-fifths of its exports – nine times as much as China) are uncompetitive, after a decade of rising relative costs.,''
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