I was just reading an article about what the British government was thinking in regards to the mess that is Europe.  What jumped out at me was how the guys at 10 Downing Street were looking at the current European crisis as an opportunity to renegotiate the terms of their relationship with Europe so as to loosen the ties that bind the two together.  In the article at www.telegraph.co.uk entitled All will be forgiven if Cameron loosens the EU shackles, many of the current governments worst critics are essentially saying that the governments failings will be overlooked if they can either get Britain out of the EU or significantly reduce Brussel’s oversight of London.  What makes this even more interesting is that it is quite possible that Britain might find itself in possession of a trump card to deliver the renegotiation.  If Europe decides the only way to survive will be deeper integration which would allow for debt mutalization then they would have to have London sign off on any change, to get it many in London are calling for the renegotiation to happen.  As the article pointed out many Tory MP’s would like to withdraw from Europe altogether, but it is more realistic to think that it would in fact only lead to a partial withdraw.

Prime Minister Mariano Rajoy insists his country doesn’t need a bailout, though investors say otherwise. The cost of insuring Spanish sovereign debt rose to a record high on May 30, and yields on Spain’s 10-year bonds climbed close to the 7 percent level that led Greece, Ireland, and Portugal to seek bailouts from the European Union and the International Monetary Fund. Considering that Spain’s economy is almost twice as big as those of Greece, Portugal, and Ireland combined, the country poses the biggest test for European authorities yet. “It’s getting increasingly ugly,” says Georg Grodzki, who helps oversee $515 billion at Legal & General Investment Management in London.

Spain’s bank woes currently center on BFA-Bankia (BKIA), formed in 2010 by the merger of seven troubled savings banks. Its assets are equal to a third of the entire Spanish economy. After Bankia’s share price plummeted 43 percent in less than a year, Spain nationalized the bank on May 9. Bankia then asked for €19 billion of government funding to clean up bad loans. The bank has begun offering Spiderman beach towels to customers between 14 and 25 years old who add €300 to their accounts in a month. On May 30, Bank of Spain Governor Miguel Ángel Fernández Ordóñez, who has faced criticism over the handling of the crisis, resigned a month before his term was to expire.

Spain has only about €5.3 billion left in the bank bailout fund it set up in 2009, but with its borrowing costs rising, the government wanted to avoid raising the cash in the markets. So Spanish officials got creative. On May 28, Spain signaled that it was considering giving banks government bonds that they could use as collateral to borrow fresh money from the European Central Bank. The government soon backed away from that plan, with Economy Minister Luis de Guindos saying its bank bailout fund would turn to the public markets to raise money for Bankia after all. At the same time the European Commission, the European Union’s central regulator, proposed that the euro-area permanent bailout fund inject cash directly into banks instead of channeling the money via national governments.

As the debate continues, Spain’s real estate problems are festering. For years the country relied on home and office building activity as a source of growth. At the height of the boom, construction accounted for more than 20 percent of Spanish gross domestic product. That’s the same level it reached in Ireland. While both countries experienced similar real estate booms and busts, their actions post-crash have been strikingly different. Ireland worked quickly to address the solvency of its banks—nationalizing them and removing billions of euros worth of toxic debt from their balance sheets by transferring it to a so-called bad bank.

Spanish leaders shunned proposals to create a bad bank like Ireland’s. Instead, they pushed banks to absorb weaker lenders. “In Spain, there seemed to be an effort to smooth out the pace of activity rather than face the shock, as Ireland did,” says Cinzia Alcidi, an analyst at the Center for European Policy Studies in Brussels. “There was kind of a denial of the scale of the problem.”

In Ireland, new building came to a halt in 2008, and property values there have crashed about 60 percent since their peak in 2007. Spain has done everything it can to support property values. To help unload the 329,000 foreclosed homes they own without slashing prices, Spanish banks provide 100 percent financing on easy terms including interest-only payments. No such deals are available to buyers of nonbank-owned properties.

“Banks are employing financing like a weapon of mass destruction to sell their stock and keep prices artificially high,” says Mikel Echavarren, chief executive officer of Irea, a corporate finance company in Madrid that specializes in the real estate industry. Spanish banks report that property values have fallen by only 22 percent, according to Jesús Encinar, CEO of Idealista.com, a Spanish property website. Encinar estimates the decline without supports would be at least twice that.

Inflated real estate prices have also helped prop up Spanish developers, many of which are still building despite a glut of vacant homes. Rather than marking their loans as being in default, Spanish banks give developers new loans to pay off the old ones, says Ruben Manso, an economist at consulting firm Mansolivar & IAX and a former Bank of Spain inspector. “There has been a lot of cheating going on where banks have lent developers new money, classed as new lending, so they can pay off their original loans,” he says.

Whatever the government comes up with to address Bankia’s immediate cash needs, it will still have the larger real estate problem to deal with. “Spain has engaged in a policy of delay and pray,” says Echavarren. “The problem hasn’t been quantified by anyone because there is huge pressure not to tell the truth.”

The following article is from the Wall Street Journal…

As European officials race to quell fears that Greece may exit the euro, many companies doing business in the troubled country are preparing for the worst.

Most executives, analysts and others agree on one thing: the impact of a Greek withdrawal from the euro zone is impossible to predict. That’s why multinational companies are rehearsing for any number of contingencies. They range from a paralysis in cross-border payments to a civil breakdown in Greece to a broader breakup of Europe’s common currency.

Retrieving their cash is among the companies’ gravest concerns. If Greece were to revert to its former currency, many companies fear that any euros left there would be converted into less-valuable drachmas. Should that happen, Greece is widely expected to impose capital controls to keep the remaining cash in the country.

Heineken said it is moving spare cash out of Greece and the euro zone overall and into currencies such as the U.S. dollar and British pound.

The measures are part of the Dutch brewer’s normal cash-management routine, but “we’re doing it with higher frequency, and we’re a little more focused,” a company spokesman said. “We make sure we don’t leave too much cash in [Greece], to limit our exposure.”

Other companies, including liquor giant Diageo and drug maker GlaxoSmithKline have said they are taking similar precautions.

Several Greek companies, meanwhile, have drawn on credit lines from foreign or local banks, fearing they could lose access to them should Greece revert to the drachma and introduce capital controls, said an official of one bank that does business there. He declined to identify any of the companies or banks involved.

European tour operator TUI and UK based electronics retailer Dixons Retail are among those that have plans to shift or protect customers and assets in the event of social unrest in Greece.

In some cases they are relying on methods tried and tested in North Africa during last year’s Arab Spring uprisings. TUI, for instance, said it could shift customers planning to go to Greece to other destinations, if necessary.

Consulting firm Roland Berger, based in Germany, said it was advising corporate clients to take steps such as introducing clauses in new contracts that stipulate what currency or exchange rate will be used, should Greece leave the euro.

In Greece, and increasingly Spain, companies are insisting on bigger upfront payments for services and products, sometimes of as much as 50%, or reducing payment periods to 15 days from 30. Others are paring back sales operations in those countries, in part to boost their standing with banks.

A Greek exit from the euro zone “would be a complete mess, and people shouldn’t underestimate that,” said Benedict James, a partner at U.K. law firm Linklaters. “A trickle of work we were doing on this has turned into a major flow the last few weeks.” Much of that work has centered on business contracts, and which ones, for example, could be terminated if Greece returned to the drachma.

Business sentiment in Europe has worsened sharply in recent weeks.

One of the biggest declines has been in Germany. Until recently, German companies had largely shrugged off the debt crises in Greece and Spain as robust orders from China and other fast-growing emerging markets more than offset lackluster demand from Southern Europe.

Another sign of anxiety came earlier this week from two of the world’s biggest trade-credit insurers, who make sure exporters get paid even if their foreign customer defaults. Allianz  Euler Hermes and Coface, a unit of French investment bank Natixis said they would suspend coverage of goods shipped to Greece because of the mounting risk of being unable to recoup payments from importers there.

Rates for such coverage have surged, said Euler Hermes spokeswomanBettina Sattler, though none of the insurers would cite specific numbers. Given the high stakes and uncertainty surrounding a Greek election set for June 17, “we couldn’t price it anymore,” Ms. Sattler said.

French retail giant Carrefour is consolidating its network of stores in Greece into fewer and bigger outlets to cope with plummeting sales there.

It also is stocking more discount store-brand products and fewer brand-name goods from food and consumer-product giants like Nestlé and Procter & Gamble Co as Greeks tighten their belts.

Trumpf, one of the world’s largest makers of laser machine-tools, said that should a worsening crisis cause its European sales to collapse, it is ready to revive measures it used during the global economic crisis of 2008-2009.

“Unfortunately, that wasn’t too long ago,” said Harald Völker, the German manufacturer’s chief financial officer. “But it means we can implement them fairly quickly again.”

Those steps include moving to more flexible payment and delivery arrangements with suppliers and a system in which its employees would work fewer days but get paid the same.

Employees would repay the hours by working overtime once demand recovered.

In the wake of the previous crisis, Trumpf cut more than €100 million ($124 million) in costs, bolstered reserves and secured three-year credit lines—enough to make sure it could endure a 50% plunge in sales, if necessary, Mr. Völker said.

Even if Greece ultimately stays in the euro zone, the pullback by companies and banks operating there is bound to take its toll on the already-beleaguered economy, which shrank by 6.2% in the first quarter.

Bankers say the uncertainty caused by last month’s elections has largely paralyzed business activity in Greece, with companies postponing investment decisions until the dust settles and as cash drains out of the country, bleeding its economy.

“There’s a deep liquidity squeeze in the country right now,” said George Zois, Greek equities broker at investment bank Exotix.

Following May 6 elections, which yielded a strong showing for a radical leftist party that has vowed not to comply with the terms of Greece’s international bailout, the country postponed a sweeping privatization program that was intended to raise much-needed funds for the government and bring foreign investment into the country.

Such ominous signs don’t seem to worry some companies. While 50% of German companies surveyed in a recent Roland Berger poll said they thought a Greek exit from the euro was likely, only 20% said they had prepared contingency measures.

“There are still many companies that aren’t so prepared,” said Max Falckenberg, a partner at the international consulting firm. “Companies have got enough on their plates just dealing with daily business.”

Other companies are weighing what-ifs in the event of a broader breakup of the 17-nation euro zone. Officials at Airbus parent European Aeronautic Defence & Space Co which is based in France and Germany, said a return to national currencies would force it to rethink everything from where to expand to how it picks suppliers and sets wages.

“If we go back, the German currency would probably be stronger than the others, which raises issues in the long term about where we locate operations,” said an EADS spokesman.

“There’s a potential for tensions within the group because wage levels would be different” from country to country.

EADS said Thursday that it is studying the feasibility of creating an in-house bank to protect its own access to credit and that of its customers amid the euro crisis. Among other benefits, having an in-house bank would allow the company to tap the European Central Bank for cheap funds, as auto maker PSA Peugeot-Citroën SA did recently through its in-house bank.

At least one company sees potential opportunity in the chaos. Dixons Chief Executive Sebastian James has been widely quoted in the British press as saying that should dire predictions pan out in Greece, it could represent an opportunity for the electronics retailer to gain market share from weaker rivals.

Del Bosque seemed to be delighted with the selection, especially with Torres who scored his first goal for Spain.

“He is one of those players that offers speed, movement and combination play with his team-mates,”

“He seemed delighted with the goal and this is good for everyone.”

On the other side Del Bosque showed his comfort to Cesc Fabregas injury hoping that he will be fit to join the team back when they play against Itlay in their opening game to defend their title in the EURO 2012.

Instead Roy Hodgson called for Liverpool’s veteran midfielder John Henderson to replace him.

Henderson who has 21 appearances in his international career is looking forward to make this year an unforgettable one when he tries to make it into Roy Hodgson’s magic formation.

Erbeben bei Modena – Wirtschaftlicher Gesamtschaden bis zu 15 Milliarden Euro

Die Erdbeben in der Emilia-Romagna, einer der produktivsten Regionen Italiens, haben einen wirtschaftlichen Schaden von weit über 5 Mrd. € verursacht. Getroffen wurden besonders Hersteller von Medizinaltechnik-Produkten, Keramik und Nahrungsmitteln.

Die von Seismologen als «Schwarm» bezeichnete Serie stärkerer Erdbeben hat entlang der Hauptstrasse zwischen Cavezzo, Medolla und Mirandola in der Provinz Modena fürchterliche Spuren hinterlassen. Die Fahrt führt an grossen Fabrik- und Lagerhallen vorbei, deren Dächer und hohe Wände eingedrückt oder aufgeschlitzt sind, als hätten die Bauelemente nur aus Karton bestanden. Arbeiter mit gelben Schutzhelmen sind gerade damit beschäftigt, die Ruinen möglichst zu stabilisieren oder vom Zusammenbruch bedrohte Strukturen kontrolliert abzureissen; andere bringen mit Hubstaplern die in den zerstörten Magazinen gelagerten Produkte möglichst in Sicherheit.

Massive Produktionsausfälle

Die Erdbeben, die am 20. Mai begonnen hatten und sich noch monatelang fortzusetzen drohen, trafen bisher ausschliesslich Städtchen in den Provinzen Modena und Ferrara, die zur Region Emilia-Romagna gehören. Trotzdem wurde bereits ein Schaden in Milliardenhöhe verursacht. Während die Restauration lädierter Baudenkmäler grob geschätzt etliche Dutzende Mio. € kosten dürfte, sind in erster Linie massive Produktionsausfälle und Schäden am Maschinenpark und in den Warenlagern der lokalen Betriebe zu beklagen.

Nach ersten Schätzungen übersteigen die unmittelbaren Verluste 5 Mrd. €, wobei aber angesichts der anhaltend grossen Gefahr neuer Beben noch höchst unklar ist, wann die Unternehmen ihren vollen Betrieb wiederaufnehmen können. Entsprechend hatte die italienische Regierung am Mittwoch an einer Krisensitzung Überbrückungs- und Wiederaufbauhilfen in der Grössenordnung von 2 Mrd. € zugesagt, nachdem sie letzte Woche bereits den Notstand erklärt und erste humanitäre Hilfen in die Wege geleitet hatte. Die Unterstützungsmassnahmen sollen durch eine weitere Erhöhung der Benzinsteuer um 2 Cent je Liter sowie durch noch nicht weiter geklärte Einsparungen bei den allgemeinen Staatsausgaben aufgebracht werden. Weitere Steuererhöhungen können nicht völlig ausgeschlossen werden, wie aus Regierungskreisen verlautete.

Emilia-Romagna Zahlen

Relativ wohlhabende Region

Der Präsident des Industriellenverbands, Giorgio Squinzi, quantifizierte den potenziellen wirtschaftlichen Gesamtschaden gar auf 1% des italienischen Bruttoinlandprodukts, was einer Einbusse von über 15 Mrd. € entspräche. Nach Angaben der Dachgewerkschaft CGIL sind etwa 3500 Betriebe zerstört worden oder vorläufig nicht betretbar. Die Zahl der Erwerbstätigen, die nicht mehr an den Arbeitsplatz zurückkehren können, wird auf 20 000 geschätzt. Getroffen wurden laut CGIL besonders Unternehmen in der Maschinen- und der metallverarbeitenden Industrie (5000 vorläufig Arbeitslose), sowie Lebensmittelhersteller (4000), Betriebe in Medizinaltechnik (3500) und Keramikherstellung (2000).

In der Branche Medizinaltechnik, die im Erdbebengebiet einen Jahresumsatz von 3,6 Mrd. € erzielt, wurden die Ausfälle auf mindestens 800 Mio. € beziffert. Und im Nahrungsmittelsektor, wo unter anderem der berühmte Parmesankäse oder der Balsamico-Essig hergestellt werden, soll der Schaden gemäss dem Agrarverband Coldiretti mehr als 0,5 Mrd. € betragen. Unter anderem fielen wegen der Beben 600 000 Laibe des lange gelagerten Parmesankäses und der günstigeren Sorte Grana Padano von den Regalen und zerbrachen in vielen Fällen.

Mit grosser Sorge ist in der Region Emilia-Romagna die Warnung von Seismologen registriert worden, dass sich die Serie von Erbeben nicht nur lange fortzusetzen droht, sondern sich auch das Epizentrum der Erschütterung weiter verlagern und damit noch andere Unternehmen heimsuchen könnte. Die Emilia-Romagna ist eine der produktivsten und damit auch wohlhabendsten Regionen Italiens und auch Europas. Sie erarbeitet fast 9% des Bruttoinlandprodukts der Apenninenrepublik, bei einem Bevölkerungsanteil von 7,2% (vgl. Kasten). Das Pro-Kopf-Einkommen ist das dritthöchste in Italien. Es erreicht 125% des EU-Durchschnitts.

«Roter Gürtel»

Die Region hat Weltruhm nicht nur als Ursprung exquisiter und höchst traditionsreicher Lebensmittelprodukte erlangt, sondern ist auch die Heimat illustrer Auto- und Motorrad-Firmen wie Ferrari, Maserati, Ducati und Lamborghini. Von ihnen haben zwar viele mittlerweile ihre Unabhängigkeit an ausländische Konzerne verloren, entwickeln und produzieren aber doch noch vor Ort. Bemerkenswerterweise zählt die Region politisch zum «roten Gürtel» Italiens, da ihre Gemeinden jahrzehntelang von den Kommunisten und späteren Postkommunisten regiert wurden. Dass die Region trotzdem relativ grosse Erfolge erzielte, wird darauf zurückgeführt, dass sich die Linke in der alltäglichen Praxis immer wieder pragmatisch zeigte und den sogenannten «historischen Kompromiss» mit dem Bürgertum suchte, was dem sozialen Frieden diente.

Allerdings hatte gerade auch die Emilia-Romagna in den letzten Jahrzehnten mit schwindenden Wachstumsraten zu ringen; und die ungewöhnlich grosse Zahl an Genossenschafts-, aber auch an Kleinbetrieben, die von der Globalisierung zunehmend überfordert zu werden drohen, ist längst nicht mehr Ausdruck von Dynamik. Vielmehr ist die Fragmentierung das Resultat einschneidender fiskalischer, arbeitsrechtlicher und anderer staatlicher Auflagen, welche die Unternehmer möglichst zu unterlaufen versuchen.

nzz.ch

via Universo Pyme – El portal para emprendedores, micro, pequeñas y medianas empresas de México y América Latina.

Posted by truther on May 31, 2012

Meanwhile in Greece, the banks are kicking themselves for having signed a tie-in deal to give away Battleship ashtrays.

ALTERED ROUTE

skate: Kilian Martin, video: Brett Novak

Frankreichs Sportministerin Valerie Fourneyron

Menschenrechte in der Ukraine

Wird es eine EM ohne europäische Spitzenpolitiker? Die französische Regierung hat angekündigt, die Fußball-Europameisterschaft zu boykottieren – aus Protest gegen die Situation der Oppositionspolitikerin Timoschenko. Diese sitzt im Gastgeberland Ukraine in Haft.

Die Mitglieder der französischen Regierung werden nicht zur den Spielen der Fußball-Europameisterschaft reisen – aus Protest gegen Menschenrechtsverletzungen im Gastgeberland Ukraine. “Das ist eine Positionierung mit Blick auf die Wahrung der europäischen Werte und vor allem im Lichte der Situation von Frau Timoschenko”, sagte Sportministerin Valérie Fourneyron am Donnerstagabend im Rahmen des Testspiel der Équipe Tricolore gegen Serbien in Reims. Das Außenministerium habe die ukrainische Führung informiert.

Timoschenko selbst hatte sich gegen einen Boykott der Europameisterschaft ausgesprochen. Die ehemalige ukrainische Regierungschefin Julija Timoschenko ist seit Oktober in Haft. Sie wird derzeit wegen mehrerer Bandscheibenvorfälle in einer Klinik behandelt.Der Westen sieht die Strafe als politisch motiviert an und kritisierte die Haftbedingungen. Jüngst wurde bekannt, dass die ukrainische Justiz Timoschenko demnächst womöglich wegen Mordes anklagen will.

Frankreichs Präsident Francois Hollande hatte schon vor einer Woche angekündigt, dass er nicht in die Ukraine fahren wolle. “Ich liebe Fußball, aber was in der Ukraine passiert, ist ein Problem”, sagte der sozialistische Staatschef am Rande des EU-Gipfels in Brüssel. Auch andere westliche Spitzenpolitiker sowie die EU-Kommission hatten bereits beschlossen, wegen des Falls Timoschenko nicht in die Ukraine zu reisen. Bundeskanzlerin Angela Merkel erklärte zuletzt, dass sie kurzfristig über eine Reise zur EM entscheiden werde.

usp/dpa

And, I’ve also seen Ahrayeph, Rhombus, a little of Dreadful Shadows, and Combichrist!  ♥ I’m happy.~
This has been a great experience, and I can’t wait to go back there.
I love Germany, I love to travel.

Here’s a few photos from the trip:







~
Photo & Edit: Beeriz. ©

Keep Calm & Scary on.~
Corpulens.

And the news are not good at all. The Hubble telescope has discovered how the euro will end. It won’t be the Greek, the Spanish or even Angela Merkel the responsible of the collapse of the euro. Or not even the Financila Times. The real responsible of the fall of the euro is going to the the galaxy of Andromeda. In about four billions years Andromeda will end the existence of the euro.

So bad news for the euro. In four billions years we won’t have euro anymore.

Related articles

• Andromeda Is Coming! (nytimes.com)

Holland
CAPTAIN: Mark van Bommel
KEY PLAYER: Robin Van Persie
ODDS: 7/1

The runners-up from the World Cup two years ago came out on top of their qualifying group, they have a fantastic group of players and although in a very difficult group I think they will be in the competition for a while. After all they have one of the most in form players, from last season, in their team. Apart from Messi at Barcelona it is hard to think of a more clinical striker than Robin Van Persie!

Key Player – Robin Van Persie

Well I have already praised the man and it is hard to argue with this choice. He is in the form of his life and with contract talks at Arsenal stalling he might just want to impress potential scouts that could be watching from the stands. RVP could well be walking away with the golden boot if the Dutch progress throughout the competition. Having said this, the Dutch have some fantastic players all over the park and have several “ones-to-watch”.

Squad

GK –  Maarten Stekelenburg, Michel Vorm, Tim Krul

DF –  Khalid Boulahrouz, John Heitinga, Joris Mathijsen, Ron Vlaar, Wilfred Bouma, Gregory van der Wiel, Jetro Willems

MF –  Ibrahim Afellay, Mark van Bommel, Nigel de Jong, Stijn Schaars, Wesley Sneijder, Kevin Strootman, Rafael van der Vaart

ST – Klaas-Jan Huntelaar, Luuk de Jong, Dirk Kuyt, Luciano Narsingh, Robin van Persie, Arjen Robben

Prediction

For me it will be the semi-finals where the Dutch onslaught on the competition will come to an end. Although I think with their fantastic players and great attacking play there will be lots of excitement to come from this group of players, though. Whoever plays them will have a real fight on their hands (quite literally if Nigel De Jong is on the field) and will have to be at their defensive and attacking best to overcome this Holland team!

Sweden
CAPTAIN: Zlatan Ibrahimovic
KEY PLAYER: Sebastian Larsson
ODDS: 66/1

Not always the most excitable of teams but forever solid and reliable the Scandinavian team will provide a stern test for whoever plays them. Qualifying for the finals in second, only behind a very strong Holland team (and beating them along the way.) On their day they have the capability to provide some real shocks.

Key Player – Sebastian Larsson

I almost went for Ibrahimovic, he is the stand out name in the squad but I do believe this could be the tournament where Sebastian Larsson comes to the world’s attention. He has had a very productive season at Sunderland this season. Lots of goals, assists and exciting play and he could add something different to a very solid Swedish squad.

Squad

GK -  Andreas Isaksson, Johan Wiland, Pär Hansson

DF –  Mikael Lustig, Olof Mellberg, Andreas Granqvist, Martin Olsson, Jonas Olsson, Behrang Safari (Anderlecht), Mikael Antonsson

MF – Rasmus Elm, Sebastian Larsson, Kim Kallstrom, Anders Svensson, Pontus Wernbloom, Samuel Holmen, Emir Bajrami, Christian Wilhelmsson

ST –  Zlatan Ibrahimovic, Johan Elmander, Tobias Hysen, Ola Toivonen, Marcus Rosenberg

Prediction

Knocked out at the group stage, is my view. This is not because I don’t rate the squad, I just think the group they have been placed in will count against them. However if France and England are not at their best in just one of their three group games; Sweden could very well swoop in, punish them and qualify for the knock out stages. Possibly one to watch.

Posted by The Extinction Protocol: 2012 and beyond

PARIS — Its membership in the euro currency union hanging in the balance, Greece continues to receive billions of euros in emergency assistance from a so-called troika of lenders overseeing its bailout.

(CNN) – With Greece probably heading for an exit from the euro, the European and global economies may be facing disaster. However, there is still time for European leaders to reverse this destructive dynamic with one simple, outside-the-box solution: Instead of pushing Greece out of the eurozone, Germany should voluntarily withdraw and reissue its beloved deutsche mark.

The analysis of the problems of the euro and the European Union has long been upside down, focused on the debt and competitive weaknesses of the so-called peripheral countries (Greece, Italy, Spain, Portugal and Ireland) and especially of Greece. But issues of debt and competitiveness existed and were dealt with rather easily long before the euro arrived, through periodic devaluation of the currencies of the less-competitive countries against those of the more competitive countries, and especially against the deutsche mark.

The problem now is not the weaknesses of the periphery, it’s the excessive competitive strength of Germany. Not only is the German economy inherently strong as a result of the high productivity of its workforce, its exports have added competitiveness because the euro is undervalued as far as Germany is concerned. Because it is the common currency of the eurozone countries, the value of the euro reflects the average of their combined competitiveness. But Germany’s competitiveness is far above the average. So, for Germany, the euro is too weak. This is why Germany has been accumulating chronic trade surpluses on the scale of the Chinese.

As long as the rest of the eurozone countries are locked in the euro with Germany, the only way for them to become more competitive is to become, well, more Germanic, through austerity measures that cut government spending, reduce welfare budgets, cut wages and raise unemployment. This is, of course, what they have been doing for the past two years.

The aim has been to achieve export-led growth. But because Germany is so hypercompetitive and has been unwilling to stimulate its own economy to achieve higher consumption, its eurozone partners have not been able to increase exports to it and have had thus to compete with it in exporting to the likes of China and the United States.

That hasn’t been working very well, and now the consequences of grinding austerity are beginning to tear the political and social fabric even of countries like the Netherlands, which until quite recently were enthusiastically echoing the German call for austerity and growth led by trade with countries outside the EU.

But it is not clear that the eurozone can sustain the social and political pain of austerity long enough and on the scale necessary to eventually achieve competitive parity with Germany.

The alternative is for Germany to revert to the deutsche mark. That would immediately result in appreciation of the German currency and competitive devaluation of the euro for the remaining eurozone countries. Germany would tend to buy more while selling less, and vice versa for the rest of the eurozone. The extra consumption that Germany will not deliver via stimulus policies would be automatically delivered by currency revaluation.

The single most essential element of a euro rescue has always been one form or another of a euro bond guaranteed jointly by all eurozone member countries. What the U.S. Treasury bond is to the U.S. economy, the euro bond would be to the EU. The main obstacle has been Germany’s insistence that it would not guarantee payments on bonds for the benefit of other European countries.

German reversion to the deutsche mark would remove this obstacle, and with no further German opposition, the remainder of the eurozone could move ahead to establish a true euro bond, along with a unified treasury function to match the unified banking function of the European Central Bank.

Some may object that German backing would still be required for the eurozone and a euro bond to be viable. That is correct, and Germany would indeed remain committed to the eurozone for a number of reasons. It would need the eurozone more than ever to buy its increasingly expensive exports. The Bundesbank (Germany’s central bank) would undoubtedly sell deutsche marks against euros to mitigate appreciation, and the resulting accumulation of euros would be invested in the new euro bonds. This in turn might inspire the European Central Bank to initiate quantitative easing programs that would stimulate the entire EU economy.

The cost to Germany of saving Europe will be a hit to exports and perhaps a temporary rise in unemployment, but a return to the deutsche mark would attract a flood of capital to Germany and thereby spur investment while holding interest rates and inflation down.

The real question is whether the cost of slower export growth and increased unemployment is less than that of paying for Greece, then Spain, etc. Somehow, the “unknown” risks of a German exit from the euro appear more manageable, more quantifiable and in some ways more familiar a challenge than endless austerity, social unrest and political polarization.

Editor’s note: Clyde Prestowitz writes on globalization for ForeignPolicy.com and is president of the Economic Strategy Institute. John Prout is the former Paris-based treasurer of Credit Commercial de France.