Up to now, the benefits of the euro have outweighed the drawbacks for
However, in the event of a total breakdown of the eurozone, the
current contingent liabilities arising from the ESM, ESFS, ECB government bond
purchases and TARGET2 balances would materialise, forcing Germany to incur
losses exceeding one trilllion euros. Furthermore, a return to a separate
currency would lead to an initial revaluation of at least 20 to 30%, sending the
country into a deep recession.
However, a lack of adjustments or political developments in other eurozone
partner countries that challenges the basis of the entire project could also trigger
a reassessment in Germany in the medium term.
In light of the recent political changes in the US in particular, it is vital that
Europe succeeds in building a constructive dialogue. Germany’s political and
economic significance means it will play a leading role in this process. If the
transatlantic alliance that is so important for the success of German industry
deteriorates permanently, it would pose a serious threat to future prosperity,
particularly in the two most prominent industrial nations, Germany and America.