Why it’s time for Germany to leave the eurozone by Mehreen Khan

Germany’s finance minister, Wolfgang Schauble, has drawn opprobrium and praise in equal measure for his suggestion that Greece takes a “time-out” from the eurozone.

In proposing that Greece could be better off outside the euro, the irascible 72-year-old crossed a political rubicon: he confirmed that the single currency was “reversible” after all.

But having broken the euro’s biggest taboo, commentators have now suggested that it should be Mr Schaeuble’s Germany, rather than Greece, that should now take the plunge and ditch the euro.

To stay close, Europe’s nations may need to loosen the ties that bind them so tightly
Ashoka Mody, former IMF bail-out chief

Figures as esteemed as the former Federal Reserve chief Ben Bernanke used last week’s decision to press ahead with a new, punishing bail-out for Greece as an opportunity to remind Germany of its responsibilities to the continent.

Mr Bernanke took to his blog to highlight that Berlin’s excessively tight fiscal policy has helped scupper the euro’s dreams of prosperity and “ever-closer” integration between 18 disparate economies.

In its latest assessment of Germany’s economic strength, even the IMF (seen in many German circles as chief disciplinarian against the errant Greeks) urged Berlin to carry out “more ambitious action… and contribute to global rebalancing, particularly in the euro area”.

A botched rebalancing

Germany’s record trade surplus is held up as the main symptom of its dangerously preponderant position in the eurozone.

A measure of the economy’s position in relation to the rest of the world, Germany’s current account hit a euro-area record of 7.9pc or €215bn in 2014. It is now expected to hit more than 8pc of GDP this year, according to the IMF.

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