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Thread: Was the Deutsche Mark Sacrificed for Reunification?

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    Politics.ie Member Ulster-Lad's Avatar
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    Default Was the Deutsche Mark Sacrificed for Reunification?

    As the German people celebrated the fall of the Berlin Wall, the governments in Bonn and Paris were secretly haggling over European monetary union. According to internal government documents, the negotiations almost collapsed. Was West Germany's beloved currency, the deutsche mark, sacrificed at the altar of reunification to win France's support?

    The architect of Germany's reunification is furious. Current Finance Minister Wolfgang Schäuble, the interior minister under the then-Chancellor Helmut Kohl, has deep furrows on his brow as he fires off a series of expressions of his immense dissatisfaction. They are harsh words, but ones the chief negotiator of his country's reunification treaty does not want to see in print.
    "Abandoning the deutsche mark for the (equally) stable euro was one of the concessions that helped pave the way to German reunification," Steinbrück wrote.
    The Price of Unity: Was the Deutsche Mark Sacrificed for Reunification? - SPIEGEL ONLINE - News - International

    This is apparently causing quite the stir in Germany with much debate at the moment. If this proves to be true it may in fact bring down the Euro. An interesting read nonetheless.

    Another related article is here.

    Germany's Unlikely Diplomatic Triumph: An Inside Look at the Reunification Negotiations - SPIEGEL ONLINE - News - International
    ‘The Great only appear great because we are on our knees: Let Us Rise!’ “ (James Larkin)

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    Politics.ie Member evercloserunion's Avatar
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    Every day there is something else that "could bring down the euro". It's not happening.
    To live honestly, to hurt no one, to give every one his due.

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    Politics.ie Member ne0ica's Avatar
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    I heard in mentioned a few years ago that Mitterand said he would block German reunification with a German commitment to a Single currency. Spiegel only seems to run negative stories about the cost of reunification so it fuels West German grievances over the cost.

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    Quote Originally Posted by Ulster-Lad View Post
    The Price of Unity: Was the Deutsche Mark Sacrificed for Reunification? - SPIEGEL ONLINE - News - International

    This is apparently causing quite the stir in Germany with much debate at the moment. If this proves to be true it may in fact bring down the Euro. An interesting read nonetheless.

    Another related article is here.

    Germany's Unlikely Diplomatic Triumph: An Inside Look at the Reunification Negotiations - SPIEGEL ONLINE - News - International

    The Deutschmark was the strongest currency for years

    I saw a graph one time of how the British pound lost value consistently against it over several decades.

    I presume all the other European curencies lost against it also.

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    Politics.ie Member Ulster-Lad's Avatar
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    Quote Originally Posted by Breadan O'Connor View Post
    The Deutschmark was the strongest currency for years

    I saw a graph one time of how the British pound lost value consistently against it over several decades.

    I presume all the other European curencies lost against it also.
    Yes that is true. If you read the articles you will see the resentment that has grown for the Euro as well in Germany. The Germans have always valued the DM and according to the articles the DM was sacrificed for German reunification. That was the price demanded by France.

    The Euro is still very unpopular in Germany and the Germans are becoming more and more Euroskeptic. They would much rather take care of their own and abandon the European project given the choice. Merkle has having internal difficulties in regards to this within her own party.

    The Germans have about reached their limit on their desire to bail out the other European countries while they are suffering austerity measures of their own in the most productive country in Europe. There are numerous reports on this on the web and news articles from Germany.
    ‘The Great only appear great because we are on our knees: Let Us Rise!’ “ (James Larkin)

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    In difficult times resentment always grows against the political establishment, so it's no surprise that people are growing more euroskeptic, but lets be honest whilst the European Union isn't as democratic as one would like, and it wields more power than it ought to, it's a drastic improvement over the feudalism that existed in Europe up until the 1800's, and the nationalism that existed afterwards.

    Once the economy picks up anti-Euro, and anti-European sentiment will probably be forgotton along with many other grievances until the next recession, all these trends are cyclical.

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    Politics.ie Member Pauli's Avatar
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    The Germans hated giving up the D-Mark and had there been a referendum in Germany on its abolition, an overwhelming majority would have voted to keep it. While the Germans have a jaundiced view of their politicians, they tend to trust their public institutions and they trusted and respected the Deutsche Bundesbank, particularly just after unification when the Bundesbank was led by Karl-Otto Pohl and followed by Dr. Helmut Schlesinger. Schlesinger was Bundesbank Chairman when the UK was forced out of the ERM on Sept. 16th, 1992 and he refused to come to Norman Lamont's aid. The UK wanted Schlesinger to lower German interest rates. Schlesinger refused. The story goes that a Bundesbank official informed a British official that since Schlesinger didn't listen to German politicians, he was hardly likely to listen to foreign ones.

    Any Germans I know would have the D-Mark back in a flash.
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    Politics.ie Member kerdasi amaq's Avatar
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    Ireland could be the trigger that brings down the Euro and with it the rotten European Union.

    As one of great men said: "He who builds on lies, rears only lies".

    The European Union is reared on a mountain of lies.
    We have got as much as we are going to get out of Europe; it is, now, time to leave!
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    Politics.ie Member Ulster-Lad's Avatar
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    Default Germans oppose IMF fiscal safety net

    Germany's Bundesbank is opposed to the establishment of an IMF global fiscal safety net to help countries facing funding problems, a source at the central bank said today.

    "Such a permanent crisis mechanism would increase risk taking by market participants," a Bundesbank source said.

    "Also instituting such a mechanism would mean an attack on the monetary policy autonomy of large member states with reserve currencies."
    BUSINESS WORLD - Germans oppose IMF fiscal safety net

    Anyone know what a 'reserve currency' is? Does Ireland have one?
    ‘The Great only appear great because we are on our knees: Let Us Rise!’ “ (James Larkin)

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    A reserve currency is one that is held in national reserves (basically a backing for a local currency).

    The dollar is the main reserve currency. The Euro is the other principal reserve currency.

    To a lesser extent, sterling, the Yen and the Swiss Franc are important.

    Other currencies are held in pretty negligible amounts. It's also pretty unlikely that a currency that is pegged to another currency (e.g. HK Dollar) would ever be a reserve currency, no matter how important an economy or financial centre is.

    As Ireland is a Euro member, we have a reserve currency. However, we are not large.
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