[StopDisinfo910]

1. More euro using countries with weaker economies ensure the euro stay as low as possible which is insanely advantageous for Germany, a country which has built all its economy on exports. Plus it provides a new outcome for the German excess savings via credits which will amplify the unbalancing created by the monetary policies and add a vicious extractive cycle on top.

2. These countries tend to prioritise their immediate safety from Russia to any economical considerations and are strongly NATO aligned. They have historically voted for parties which are close to the EPP, the currently dominant European party which is itself controlled by and subservient to German interests. See how Von Der Leyen was basically saved by Poland in 2024. This ensure the EPP remains the dominant force in Europe and significantly dilutes the voices of countries strongly disavantaged by how the eurozone is working and which could be tempted to ally to try to push reforms (Portugal, Spain, Italy, Greece, France). Generally, expension strongly favours the current status quo, itself extremely favourable to Germany, Austria and the Netherlands.

[0xDEAFBEAD]

I'm confused, Europeans on HN are always telling me how NATO is a big scheme the US uses to keep the dollar strong. Now you're telling me the EPP is a big scheme from Germany to keep the euro weak. Something's not adding up.

[inglor_cz]

This requires some actual history, not just memes and conspiracy theories.

Originally, it was the French during Mitterrand times who pushed for a unified European currency. Kohl granted it to them in exchange for their consent to unify Germany, but wasn't happy about it, because he knew that conservative German voters were attached to the strength of the Deutsche Mark.

Nevertheless, 15-20 years on, it actually turned out that a weaker euro was a problem for industry in places like France and Italy, while supporting German exports. Germany had a streak of really strong exports.

Nowadays, it does not matter anymore, though. Aging of the population, expensive energies, bureaucracy gone wild and bad immigration policies have made Germany a sick man of Europe again. When it comes to raw industrial growth, the strongest player in the EU is now Poland, which does not even use the euro.

[StopDisinfo910]

The EPP is a political party not a scheme but yes, Germany benefits immensely from a weak euro as a net exporter and the way the eurozone is structured, as a monetary union without a fiscal union, and how it operates, roughly with transfers being very limited, a big no no for the population of the advantaged countries if not an impossibility considering the historical rulings of the German constitutional court, ensure it stays this way.

I have no personal opinion on NATO being a big scheme to keep the dollar strong. I personally think its creation had more to do with limiting the spread of the USSR and ensuring the former European empires remained in vassal positions following the second world war. Still, as a net importer, the USA generally benefits from a strong dollar. The dollar is in a fairly unique position anyway as it remains the internation reserve currency.

I fail to see what's not adding up here personnaly.

Replying to inglor_cz here because dang rate limited me because one of my post about Rust was apparently grounded but written in what dang considers a "flamebaity" way while being highly upvoted:

To me, that's a deep misrepresentation of the systemic issue at stake.

Germany didn't magically happen to have strong exports while it became an issue for France and Italy. That's a structural feature of the monetary union. The euro was always going to be weaker that the DM and stronger than the Lira. That gives an inherent advantage to Germany and conversely deeply disavantage Italy. That's why there never was a currency union without transfers in history before the euro. It plainly can't work.

What Mitterand and Delor did was take a gamble. They pushed for an unsustainable currency union hoping it would extend to a fully featured fiscal union when a crisis inevitably came. Sadly, that's not what happened when said crisis came and we are now stuck with a setup which is either slowly erroding the competitivity of the periphery or forcing it into pro-cycle austerity in the name of a political doctrine it never chose while it favors a few core countries widely misallocating their excess savings while pretending to be virtuous. Our saving grace

It's obviously completely unsustainable hence the constant rise of extremist parties in the perepheric countries but like a good quasi-neocolonial setup, you will see a lot of people actually defend it with arguments which are roughly the same as the one the empires used to use: leaving will be economical ruin, the alternative is chaos, you obviously can't manage your economy without us.

It's no surprise the strongest industrial player in the EU is becoming Poland. It is because they are out of the euro. Look at how while they are theorically forced to join by the treaty, they are doing everything they can to stay out.

Amusingly, we might all end up being saved by Trump because tariffs on top of two decades of systemic underinvestements have put the German economy so out of balance, we might finally witness the end of ordoliberalism.

[0xDEAFBEAD]

>Still, as a net importer, the USA generally benefits from a strong dollar. The dollar is in a fairly unique position anyway as it remains the internation reserve currency.

I would say the causality goes the other way, we are a net importer because foreigners need dollars since they are the reserve currency.

[throw-the-towel]

But how does weakness of their economies lead to the euro being undervalued?

[StopDisinfo910]

The euro being undervalued is a relative statement. It’s undervalued for Germany in the sense that considering Germany current policies and trade balance, an equivalent German only currency would be considerably stronger. That’s a significant part of how Germany remains competitive despite investing so little in their productivity.

Conversely, it’s extremely overvalued for the economy of the periphery. If you look at their trade balance and policies, their own currency would be far weaker. Paradoxically this would be a boon for them. Sure it would impact their ability to import but it would make their exports far cheaper in relative terms.

Adding country with economy pulling down the value of the euro is therefore extremely advantageous to Germany at the expense of the periphery. This is by design. A currency union can’t work without transfers.

That’s why it’s extremely unfair to impose the euro as part of the criteria for joining and why you see country like Poland doing its best to not join. Sadly, Spain, Portugal, Greece and Italy are stuck in. I personally can’t refrain from strongly resenting the union every time I see someone from the advantaged core pretending to be morally virtuous while being the direct beneficiary of one of the most unfair transfer setup since decolonisation and pretend the south should just go with austerity which is the exact reverse of what’s actually needed (investment and devaluation).

I somehow understand how we got there and the weight the completely botched unification of Germany in 1990 carries in it. It doesn’t really make the pill easier to swallow.