If you are a great big fan of the European Union, austerity, and the Euro currency, you might want to say Oh #$%! right now. Yes, the strongest member of the European Union, Germany, might not withdraw from the Euro currency but that doesn’t mean the citizens and the merchants of Germany will happily tra-lalalala along with their government over an economic cliff in the years to come.
Instead they are engaging in a de facto return to the Deutsche Mark as according to the MRI Bankers’ Guide to Foreign Currency, German mark currency is “redeemable at the discretion of [the] issuer.” People are going out and spending them and businesses are accepting them as a valid form of payment. Yes, unlike the other members of the European Union who set expiration dates on which their currency would no longer be legal tender, Germany just quietly transferred over without saying anything of the sort or getting rid of theirs. Well, it turns out that three other countries also haven’t switched over to the Euro. The UK and Denmark both kept formal opt-outs where they said no way, not doing it. Sweden, much like Germany seems to be doing now, went with the more fluid de facto opt out. It is funny then that these countries seem to be the stablest while black holes like Greece are sliding into an abyss of nothingness from which no one will return. I think that Euro is going to go down that toilet as well.
I mean if Germany just up and one day says, were going to switch back to the marks we have, what will happen and just who will freak out then? Probably the rest of the Union seeing as how the economic strength of Germany’s engagement in the Euro is helping to float not only Greece, but Spain and Italy right now as well.
For now, the Marks are frozen at a pegged rate of almost two marks to the Euro, but how much of this stuff is hiding in people’s homes that would otherwise not come ou?. What happens when someone says, I’ll be willing to give you a little more for your marks than I otherwise would because I trust them just a bit more? We all know that a fiat currency is just a fiat currency and it is only worth as much as someone is willing to have faith in it. But, people are losing faith in the ability of the Euro, they haven’t lost faith in the Mark. The Mark was just fine before the Union and I bet if you were to ask the average German how they feel about returning to the Mark you’d have a lot more people consider it outright than you would have only two years ago. You see, there is no negative stigma attached to the Mark. If several other countries go down the tubes, the Mark won’t go with them, the Euro will.
That could have some far-reaching implications, but it could also serve to weaken the position of the Euro in Germany right now. If I were Europe I think I might look around and see if there was a way to convince the German people who the Euro is the way to go, because if they pull out half of those countries are going to fall into a funk like the eastern european countries did after the fall of the Soviet Union. With no big daddy to pick them up, it is decades of languishing on the bottom of society, maybe a little bit better than a third world because they already have an infrastructure in place, Greece will get there first and then probably three to five other major countries will go down one after another. All because Germans prefer Marks.
Good Luck Europe, looks like you might need it.