Will Germany leave the Euro?

This week I had the pleasure of Maurice Newman's company - Chairman of the ABC

Amongst friends of the Australian German Association, Maurice provided a future that most people are not considering with Europe...

Discussing with those who attended the lunch, many had disbelief with what Maurice was discussing... though let's hypothetically consider the possible future painted that revolves around...

• Greece defaults and exits the EURO
• Germany consider a new life outside of the EURO

Maurice started his story with that old story from the USofA about 'Kicking the Can'.

Kicking the Can used to represent the innocent child kicking a can down the road as a form of play. Now the media and other social networks have presented the kicking of the can as a neverending corporate and government refusal to accept the inevitable. Because the inevitable is hard poison (or medicine) to accept - it is easier to just keep kicking - rather than face the facts.

As President Obama looks at ways to develop relations with the APAC region, including his first visit to Australia another $447billion has been spent to avoid US double dip into another recession.

The core problem remains - as we continue to 'kick the can' debt and deficit reduction is not happening - globally. More and more assets are being accumulated by government - only to be mismanaged.

So Maurice explains that the outlook is grim. The Eurozone has gone from bad to worse. PIIGS (Portugal, Italy, Ireland, Greece and Spain - considered weaker economically following the financial crisis) is a major problem.

Liquidity issues abound.

Greece is running an inequitable balance sheet

Debt to GDP is increasing with unsustainable investment in community and entitlements support - whilst under taxing.

Ireland have problems derived from badly managed property investment

and much more.

Maurice thereby suggests one scenario is that Greece will default the EURO. This crisis is expected to extend into Eastern Europe leading to ratings downgradings for banks and countries.

Then the questions - that started massive debate are...

Will Germany continue to support the Euro as the key 'bank' financing the poor economic decisions other EURO countries have made?

OR;

Will Germany look at how Charity begins at home and consider the growing influence of people within their population suggesting a need for Deutsch Mark renewal.

The conversation that followed is subject to Chatham house rules and to be privy to these conversations - visit the next Australian German Association event.

You can also Contact Us with your thoughts for distribution to key stakeholders including the Australian German Association and German Embassy

To discuss future AGA events - simply contact us