Germany Could Exit the Euro "Overnight"

May 25, 2010 (LPAC)—Certainly a sign of the times are remarks like those coming from Ansgar Belke, a director of research at the Berlin-based German Institute for Economic Research, or DIW (Deutsches Institut fuer Wirtschaftsforschung), who is quoted in several investment newsletters and other German media these days, saying that "legally, a voluntary exit from the currency union is possible." Belke went into some detail, saying that "first of all, [Germany's currency] the d-mark would have to be reintroduced as an accounting unit, with a fixed exchange rate [to the euro] for about one year. During this period, the euro would still be the official currency, and in the meantime, new bank notes and coins would be being printed and pressed, which after that one year would come into circulation. All euro coins and notes would then be abolished and the euro would become an accounting unit. In the last stage, the fixed exchange rate between both currencies would be lifted, and the d-mark would be independent again."

For his part, Belke is not in favor of such measures, but does say it is possible, naturally.

However, according to Alfonso Tuor, an economist and deputy editor of the Swiss newspaper Corriere del Ticino, "Germany's exit from the euro must occur overnight." Tuor expressed this view to EIR saying that a transition period such as the one described by DIW researcher Belke does not work. "You cannot do it in one year; it must be done overnight, or in a weekend. The announcement must be done by surprise, like: 'You are given 30 days time to convert euros into DM and state if you want your debt to be denominated in DM or Euro... It must be done in the same way as Nixon did with gold".

The question of the physical changeover is irrelevant, according to Tuor. "Circulating money is very little. Monetary supply is mostly electronic. Technical banknote changeover "is a joke", you can do that afterward.

Tuor is convinced that Germany will exit from the Euro in 2-3 months, "or even in one month". "Now everything is coming down" in the financial system, he said. "I do not see who can intervene" to stop that. The stock market plunge is having other effects, in terms of devaluing bank collaterals. It is a chain reaction.

"I am convinced that Germany's participation to the bailout package is the price Germany has paid in order to get out of the euro", he said. In other words, soon Germany will say: we have given what we could give, it is over now. Now we go back to the DM.

THE NEW AMERICA: http://www.larouchepac.com/lpactv?nid=14584

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