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Jornal de Negócios - Portugal | Friday, June 25, 2010

George Soros on the Germans' new euro-scepticism

US financier George Soros speculates in the business newspaper Jornal de Negócios about what might happen if the euro crisis prompted the Germans to leave the euro and reintroduce the deutschmark: "The Germans no longer feel as rich as they used to, so they don't want to go on being the paymaster for the rest of Europe. This change in attitude is understandable, but it has brought the integration process to a halt. ... The Germans ought to consider the following train of thought: if they leave the Eurozone the deutschmark would skyrocket and the euro would collapse. That would make the rest of Europe more competitive and it would overcome its difficulties via growth, but Germany would realise that it can be difficult to have an over-valued currency. ... Nevertheless, the government would find it more acceptable to rescue German banks than to prop up Greece or Spain. ... Of course this is only a hypothesis, for if Germany really did leave the monetary union, this would have unthinkable political consequences. But this might be a useful train of thought to prevent the unthinkable from actually happening."

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