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Pani-rosa [81]
3 years ago
11

How did Germany hurt itself with its own currency

History
2 answers:
fredd [130]3 years ago
4 0
They have so much money
Ainat [17]3 years ago
4 0
Germany has for many years pursued a policy of wage suppression, which many economists have described as a competitive devaluation or ‘beggar thy neighbor’ policy. Germany’s gains in competitiveness were immediately translated to gains in trade, since the freedom of goods, services, persons and capital allowed German products to circulate freely and quickly throughout the European Union. These are the fundamental freedoms of EU law and are vigorously protected by the European Court of Justice. German policy would not have been successful without them

Germany has also benefited from the fixed exchange rate that the Euro effectively secures between itself and its major European markets. This means that its export boom was not offset by a rise in its own currency. If Germany had been outside the Euro, currency appreciation would have hurt Germany’s gains. Not so in the Eurozone.

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