no mention of sources though.
That is a site put up by one of the authors of a report exploring the idea that the PIIGS should write off their mutual net balance debt: if I owe you $10, and you owe me $2, then we strike the $2, and I owe you $8 while you owe me $0, reducing loss by friction. That report (pdf) is linked from the site.
I found that site by searching for the filename of the image (EURBEF.png), and looking for a post or article that uses it and cites its source. This is one such post:
There are more subtle issues, too. Its very hard to know what to count as Irish sovereign debt. Do you count 'working capital' on loan from the ECB? How do you value the assets of the nationalised banks, which perhaps count against debt? Also, adding to the confusion, is that countries have an incentive to use various accounting strategies to minimise the figures.
So its very hard to come up with an estimate that everyone agrees on.
One of the Irish economic commentators, generally thought to hold the most pessimistic outlook, is academic economist Morgan Kelly; he wrote an article in the Irish times, in May, where he estimated the debt at 250B euro (~$340B) (http://www.irishtimes.com/newspaper/opinion/2011/0507/122429... - pretty grim reading).
Obviously a terrible amount of debt, but its half the amount quoted in the NYT.
How did Ireland get like this? A comment elsewhere on this article has a pretty good summary: http://news.ycombinator.com/item?id=3230142
Basically, we had a housing bubble in Ireland, some very careless bank management (like the rest of the world) and a political failure to either A) regulate the banks properly, or B) to deal with the consequent bank failures properly.
When things started to go south in September 2008, the government of the day made a decision to guarantee much of the debts of the main Irish banks. This turned out to be a very bad decision. Its also a decision that the ECB and other EU countries won't let Ireland wriggle out of, as many of the creditors of the Irish banking system are other EU financial institutions (worried about systemic risk) - to the extent that Ireland recently paid off a controversial unguaranteed bank loan, under pressure from the ECB.
So this is why the Irish sovereign debt is so high.
The fundamentals of the economy could have been better - there was too much building construction, for a start - but they weren't bad; the state functions, people pay their taxes, Irelands a good place to do business, and is becoming a very friendly place for startups; so the scenario is very different from Greece; but the level of debt is sadly huge.
It's the construction sector that's not so good now.
The print version contains the above mentioned countries and speculation on China as well: http://www.nytimes.com/imagepages/2011/10/22/opinion/2011102....
Edit: Data is from statistics released October 20, 2011.
What was more disturbing in that article is that it clearly shows that the activity of those banks is still very sane and that they made profits and all indicators are green even through the last few months. In other words, besides market speculation, nothing justifies the 20% drop of the CAC40 or 50% drop for certain groups (Carrefour is now worth less on the market than their assets).
I'll reach back when I find the article.
Edit: I believe it's this article, but it's now behind a paywall:
Maybe equity value drop is predicting a drop in asset value?
Seeing where we stand now this was quite a visionary step. Switzerland paid for it with slower growth etc. but is now one of the countries with the healthiest Budget (a feat especially considering Switzerland does not have any natural resources) and one of the few (besides Singapore and Norway I think) that is not in danger of losing its Triple-A ratings.
Since US GDP is currently far below potential GDP that would seem to allow for a substantial fiscal stimulus right now but force the government to save when the economy is stronger again.
Many people saw the Swiss Franc as a safe haven currency and massively bought them up, driving up the exchange rate. This caused Switzerland's exports to become uncompetitive which is also slowing what is a very export driven economy.
Oddly enough prices haven't really come down domestically either, but neither has unemployment risen that much (despite large layoffs in the financial services sector, particularly in their biggest banks, UBS and Credit Suisse).
Sweden and Estonia
Still, you are right that they may not be reducing debt, but at least they are keeping it stable.
Anyway, I think Italy does have a great industrial base, so they have something to work with if they can get some reforms done. Not so in Greece.
But maybe I'm just whistling in the dark here. If interest rates spike and the ECB stops buying debt all talk of longer term sustainability will be moot.
The amount of government debt the non bank private sector wants to hold now is maybe half the existing stock. Higher real interest rates might increase that level somewhat by encouraging saving, as might mandated savings. The alternatives are inflation or default, or trying to float a giant government hedge fund to take on the leverage, the EFSF plan.
I don't think the the EFSF will play much of a role in that. Ultimately the ECB will have to keep Italy's (and later Frances) bond yields at a sustainable level. They will have to do what the Fed and the Bank of England have been busy doing all along: monetize the debt. Trouble is, they're not legally permitted to do that, but I think the Germans are pragmatic enough to let it happen. The question is when.
edit: The surplus/deficit is the first derivative of the debt. Whether a country runs a surplus or a deficit changes from year to year.
None of it cancels out.
That being said, do governments buy bonds of other countries? Or is it just financial institutions and individuals buying them?
So while it does look like "Greece owes Ireland $8.5bn" is at least partially cancelled out by "Ireland owes Greece $0.8bn", I would expect that these statements roughly translate to "The Greek government owes various Irish banks $8.5bn" and "The Irish government owes various Greek banks $0.8bn", which unfortunately don't cancel each other out.
I'm not sure where the information from this diagram comes from because I didn't think a banks exposure to different countries was public knowledge.
Historically it was not available.
Meanwhile, German economic policy essentially consists of:
1) Tight fiscal policy to crush any signs of a recovery.
2) Tight monetary policy to crush any signs of recovery.
3) Tie yourself to some profligate countries so that you have a cheap exchange rate
and can sell s***loads of exports.
4) When the countries you provided vendor finance to start having trouble paying
you back insist that they follow 1) and 2).
5) Wonder why everyone hates you.
..."It's a pulley system - you throw everyone over the cliff and let the rope
take you higher. But eventually you reach the pulley."
reminds me of Air France 447, the people running the show initially reacted by pushing the stick in the wrong direction, they're still way behind the curve, by the time they react with sufficient force, might be too late, crash of markets, governments defaulting, countries abandoning the Euro.
So in fact it is essential that in eurozone:
1. Germany and France be saved from the worst.
2. Germany and France beat the other juvenile countries into fiscal submission.
3. The new "germanized" europe lifts itself out of ash.
Whatever people think, the whole point of eurozone is "germanization" of Europe. It's not as some people state that Germany is trying to occupy the Europe. The fact is that Europe wants to occupy Germany. Thats the whole point, the whole Europe and its citizenry would like to live in Germany.
And Germans know full well what they're doing - I'd even dare to say that they know what they're doing even better than 'mericans. Don't forget that Germany annexed DDR 20 years ago and that DDR was in much worse shape than any of PIIGS. Alo Angela Merkl along with many people in charge, grew up in DDR.
I hope we can agree that these are horrible numbers for wealthy EU countries and not the result of political choices, but primarily bad management. I mean even countries that really cannot be considered laissez-faire capitalistic like Sweden (14), Germany (19), France (29) are doing much better. Even the former eastern european states, that started at a much lower level have better rankings...
So I wouldn't say that the aim is some "germanization" of Europe, but that the reforms in Italy+Greece are just clearly necessary.
Since Italy+Greece joined the Euro, they had the cheapest access to credit ever and it didn't help them at all. Maybe the harsh reforms and austerity now isn't optimal either because it is killing the economy, but it seems it is the only thing that can work.
That's nonsense. The German welfare and pension system is really bad compared to e.g. The Netherlands and Scandinavian countries (which are doing fine economically, by the way). Besides that, Germany doesn't even have a minimum wage.
To us, Germany means: potentially bad income when you work (no minimum wage), bad income (Harz IV) when you are long-time unemployed, and bad income when you retire (compared to e.g. The Netherlands where you do not only get whatever private pension you build up, but also a decent state pension).
Citizens of EU states are free to move to and work in other EU states. So, if your point were true, we'd see lots of immigration to Germany. Which isn't the case.
And I didn't mean that these peripheral people are all looking to move to Germany and eat Bratwurst and drink Beer, while reciting Goethe and enjoying Shit German Welfare. By the way, calling German welfare bad is absurd and completely a matter of political and personal convictions. Some of our US friends here would call German welfare socialistic and dangerous (?).
There are also other reasons why people don't emigrate - language and cultural barrier is key here. Romanians and Bulgars are migrating to Italy, due to language and cultural similarities. Polish are migrating to UK - since new generations apparently speak better English than German, etc. If more people spoke German, then you would see much more emigration to Germany, hell you don't even need to migrate for the most part. Being able to get business connection with Germany going on a personal level is more than enough for one to get going.
What I mean is that New Europe would want more of Germany (or Old Europe) in their own countries. And by that I mean an judicial systems that work. Government that actually offers some services beyond employment for the unemployable and privileged. And system where hard working people are protected from scores of predators. This is the gist of problems that Europe is facing currently. As far as Greece, Italy and Spain goes - its not the same as the CDS crisis in US. The problems that led to current state of affairs have been well know for a long time, but have not been acted upon due to ignorance and systemic corruption on the part of these weak countries.
I'm sorry, but you sound like all you know about europe is what's been airing in the news for the last year. You call the spanish economy "weak", when in fact it's the 5th largest. Italy is the 4th.
Please check your facts. A few good comments about the judicial systems aren't enough to offset having an argument that stands entirely on stereotype and pulp news.
My division is not geopolitical, it is more of an cultural division. Protestant vs Catholic would be a starting point of two bigger blocks.
I haven't called Italy and Spain economically weak. However they are weak as far as civic virtues go, work and business ethics also leave a lot to be desired. When confronted with these issues people usually go and play the "meiterranean melos" card. When in reality these countries are likely just failing to cultivate a sense of personal responsibility in the citizenry and institutions.
No. The Poles migrated to the UK because only three pre-2004 EU members (the UK, Ireland, and Sweden) would actually let them in. (All other pre-2004 EU members exercised their right to impose temporary immigration restriction on new members for up to seven years), and there had been a fair-sized Polish community there since WW2. http://en.wikipedia.org/wiki/Polish_Resettlement_Act_1947
If you are worried about minimum wage, you are likely looking for work in "unskilled areas", and of course Germany isnt great for that, which the high numbers of long-term unemployment show. It probably doesnt make sense to move between high income EU countries for minimum wage work anyway, since your cost of living etc. will probably increase if you dont have localized knowledge or a social network.
This "no minimum wage" is rather a red herring, since the Harz IV income is rather high there is a de facto minimum wage, since practically nobody would work for 3€ / hour.
Thats the whole point, the whole Europe and its citizenry would like to live in Germany
Immigration levels among the developed countries in the EU, which are shockingly low despite there being no actual barriers to transit, demonstrate this. This translates to a lack of cooperation and leadership, which many europeans agree is the true cause of all this trouble.
I couldn't understand the worldview of the Greeks, but now I realize that the grasshopper -- by its very nature -- hates the ant and always thinks he cheated.
A big part of the issue is lack of solidarity, no one trusts the government, no one wants to pay taxes, no one wants to make the hard choices. But when the government and leadership is seen as out for itself and dysfunctional and the wealthy are inoculated from pain while the average people suffer, then people think they are unfairly asked to sacrifice.
(if I may digress, some of this, sadly, is increasingly applicable to the US, including adoption of inflammatory ant/grasshopper rhetoric/posturing. There are a lot of dysfunctional poor subcultures, but also a lot of poor people who work a lot harder than middle and upper classes with little to show for it, limited opportunity to join the middle class, limited access to decent education and health care for their kids
When someone is trying to take away what you are accustomed to having, it's quite easy to persuade yourself of their moral degeneracy, whether they are 'dirty hippies', or 'fat cat banksters'. When you have interests to protect, it's quiet easy to find ideologies that make them just and necessary. Politics: A strife of interests masquerading as a contest of principles - Ambrose Bierce)
What is happening now that you object to, and what solution do you propose?
The solution is for the ECB to monetize government debt, and combine that with much tighter fiscal monitoring to ensure it isn't abused; but the ECB is forbidden by treaty from lending to governments and the German public is implacably opposed to changing this.
Greece is a country that can't afford it operations. It has no economic growth and large unemployment. It survives by borrowing money. In a "normal" situation, it would go bankrupt and its money would be devaluated. Then in several troubled years it could experience growth again because with a devaluated money you are in a better economic position to make things and sell them.
In reallity, Greece is part of the Euro zone so its money is the Euro and it has no control over it. Greece's situation is comparable to that of California (although not to the same extent).
While many economist agree that austerity doesn't bring growth, at least it stops the bleeding. Also, we "don't know better" is the general concensus. Not to mention it worked for Iceland.
Government spending isn't "bleeding"; economies are feedback systems, and changes to spending in one location directly reduces income in other areas, which results in lost productivity until the system readjusts. Adjusting the system when productivity is already low is one of the worst times to do it, because there's very little to take up the slack.
On the other hand, Greece probably needed a crisis like this in order for it to face up to its governance problems.
I don't know why you quoted "don't know better"; I didn't say that, nor anything like it, as far as I understand. Iceland is not very relevant, again, since it had its own currency; in sudden devaluation, it reduced the value of monetary wealth of its citizens massively. You could view it has a massive government appropriation of citizen assets.
Hardly; The government got itself into so much debt in the first place because of tax evasion lowering tax revenue and high government expenditure. i.e The government spent too much servicing its own people, now it needs to grab the citizens' assets back to repay it all.
The Greek economy is not fundamentally different than it was when it was accepted into the EU. France and Germany knew that then and know it now. They just want to have their cake and eat it too. They loaned money to a country that had little hope of paying it back. It's fun to say "it's all the debtor's fault" but there are two sides to every debt relationship and in this case, as much fault lies with France and Germany as it does with Greece.
Also, Iceland didn't go through the forced austerity that is being pushed upon the Greeks. The Icelandic government essentially defaulted when it nationalized the banks. There was no "We'll give you a bailout if you crush your economy through austerity programs" from the EU because Iceland is not an EU country.
Austerity only stops the bleeding to foreign creditors at the expense of the country's citizens. It does not stop the bleeding internally in the local economy. The Greek population knows this and that's why they are strongly resisting.
Yes, deflation is dangerous, but here it is the only way to get around the fixed Euro currency to lower prices.
I'm confused. Devaluation is inflation, right? You're saying that lower government spending may lead to inflation?
And you think deflation is the more desirable outcome?
I'm not disagreeing, but I haven't heard that line of reasoning before.
Normally when the government gives a whole stack of money to its citizens, the country's currency inflates. Its exports will then be cheaper to others.
Greece cannot do this; Its currency is fixed with its major trading partners. There is no way to lower prices of its exports... besides deflation.
There's two ways out of it. Quit the Euro (default on debts) and inflate the economy to lower export prices (look where that got the US, I'm starting to be skeptical of this tactic), or cut public spending, start deflation, to lower export prices.
Since in France, Germany, prices are not deflating, deflation in Greece will lower Greece's export prices. While consumers in Greece may stop spending... "Ooo my money goes up in value by simply holding it", importers in France and Germany will not stop spending "Buying from Greece is cheaper than buying from France, Germany. No brainer". They're not going to stop spending because if they stop spending money to import they also stop earning money from selling the imports to their home countries.
Lower export prices -> Increased exports. Eventually, hopefully, it will bring the country back into growth.
I think deflation is more dangerous when your currency isn't fixed with others, because then banks/companies will be able to manipulate your currency to take advantage of the deflation in the country. When the currency is fixed, there is just as much point for an importer to play with currency as US Steel plays with US Dollars. (i.e Not their business).
This is all what I think Germany is trying to make Greece do. I don't have evidence for any of it.
However I don't know if real damage is being done. Greece has import agriculture and tourist industries. Are the fields being left untendered? Is are there hotels being left half constructed?
I agree that unemployment is waste of human capital.
Perhaps the government should have just halved all there employees wages rather than laying them off?
Yes, but this is normal for Greece; leave your building unfinished, even if only cosmetically, and you pay no tax on it. A desperately needed tweak to the law is to start taxing buildings when they are actually used.
Don't get me wrong, I have no animosity toward the UK or anything like this. I also find BBC's reporting to be of very high quality and I watch it daily. However there is total unfairness regarding the Europe thing at the BBC.
Basically I'd sum their coverage as "See what's going on? We told you so!".
That said, I disagree with you regarding the "stay out of the Euro". I now think that it is sad that the UK didn't get more involved in the Europe. The UK is probably the only country that could have weighed enough to get France and Germany to actually implement another management.
Europe is victim of the "small team" problem. It's a small team so it's ok if the two biggest guys manage it hand in hand because everybody's just ok with that and nobody can really challenge them. Problem arise with tougher times like we experience.
You guys should have really pushed us :) My opinion: we needed you to kick us and tell us it's not ok to just take the lead; it needs to be formalized AND democratic.
Hopefully we withdraw fully from the EU, and the Euro collapses.
Just watch the Eurovision song contest for an idea of how ridiculously different Europe is from the UK, and how widespread the whole "we like them but not them" thing is.
I don't want to pull the wrong rope but how can you group cultures like Slovakia, Spain, Greece... and saying "we" are different.
Europe as a whole is a bunch of countries with different cultures that team up together to be stronger. The only common treat is the continent.
You can be happy that you aren't involved in the "saving the euro" mess and you should be. But believing that you are somewhat distanced from the EU or that it would be possible to believe is totally delusional - the european integration is extremely deep even if the euro fails and in my opinion cannot be stopped or reversed.
In addition, the cultural differences are not really that large. Europe has a common fascination with arguments and alcohol, especially the Northern parts (which include Uk, Ireland, Scandanavia, Netherlands and Germany). Historically, there have been huge links between the UK (and ireland) and these countries. To claim that there are these huge differences based on the Eurovision is a little absurd.
That being said, while watching the Eurovision i often find myself regarding them with a mix or horror and bemusement, but thats mostly because they're the kind of people who go on the Eurovision, not because they are of different nationalities.
The UK does have a problem though, in many ways we are much more like america economically than the rest of europe, but european is trade is big part of our economy.
It's fairly obvious that our countries usual musical output is pretty decent, and if we entered any of that into the contest, we'd win (If it was actually anything to do with the song).
I love the Eurovision song contest though, because it highlights how ridiculous the idea of integrating Europe is. You get countries who always vote for each other even when the song is rubbish, and you get no one voting for us, even when we have a half decent song. The Eurovision song contest is the best advert for a 'euro-skeptic'.
Apparently Europe created the Eurozone because they were afraid of the newly united Germany
I do get where you're coming from though, since Germany and France have been the motors of the EU's economy. Fair enough.
But the original claim from the ancestor was that Germany and France created the Eurozone and others joined later. That's simply factually untrue.
But with the Euro, other countries in the Eurozone which have had a negative balance of trade (a trade deficit) balanced out Germany, preventing the Euro from appreciating too much. This helped Germany's export sector, helping keep them competitive.
The other issue with the Euro is that Germany's economy was already adjusted for low interest rates; but the introduction of the Euro meant low interest rates in countries which had not historically had them.
Ireland didn't have a big government deficit problem; Ireland's problem was a property bubble driven by reduced rates on mortgages. It only turned into governmental debt when the government guaranteed bank debt, having been convinced by the banking-political cabal in the middle of the 2008 crisis that the bank problem was liquidity, not solvency; but with banks holding assets formed from inflated house prices, they didn't have as much capital as they thought.
Let's take porsche cars as an example. Porsche pegs a price in euros, and the price that US customers pays is the equivalent price in dollars (plus some extra fees, but those are generally negligible). A weaker euro means that 1 dollar is worth more euros, so that the dollar cost of the porsche to US customers is lower than it would have been otherwise.
On the other side, US exporters are hurt because the stronger dollar means that they have to charge more euros for items.
A similar issue exists between US and china
Wouldn't it be better for Germans to work less and have other people send valuable goods to them?
Aren't we considering the counterfactual where Germany never entered the Euro and had it's currency dragged down by weaker nations? In that counterfactual, the currency appreciation would have been slow and there would have been plenty of time to adjust. So the unemployment effects would have been minimal.
So ultimately, all the Euro did was reduce German buying power and force Germans to work more.
ADBOC.It seems to me that it actually works out more like redistributive taxation than one might naively think from what you wrote. An artificially cheap currency means more manufacturing jobs at static wages more than the same number of people working more hours. It has very approximately similar effects to progressive taxation, or more accurately it acts as a subsidy to the German manufacturing sector.
I don't know (but doubt) if the German people would have signed up for this, but the possibility is stronger given that Germany is in the extremely unusual situation, for a developed country, of having a larger manufacturing sector than a services sector.
I don't think I actually disagree with you on any point.
Agree denotationally but object conotationally
(Did I misread you? What you write seems rather xenophobic besides being somewhat economically illiterate. From a strict economic point of view, there is no surplus of jobs. The price of labour should rise until the demand for labour abates; and the German workers would be better off. To the degree that that isn't happening (though Germany's population overall is decreasing, not increasing), it is because Germany has an open economy with free movement of labour. If you're attacking that, you're attacking the whole foundation of the EU, and I don't want much more to do with you.)
Unless you are looking to increase your population you don't design policy to encourage immigration, you design policy to improve the lives of people already living there (indigenous or not). After all the government has invested in these people prior to working via services and schools. It is not xenophobic to put your needs ahead of those outside the country or suggest it should be so.
The reason the price of labour doesn't increase needs only a simple answer; that demand is met by supply from an open economy and free movement of labour. This benefits immigrants from weaker economies, of course, but also German businesses who employ them. If the EU did not have this freedom, ordinary Germans would be better off, but we would all lose out for three reasons described by DuncanIdaho.
Furthermore, I don't actually think tsotha was being Islamophobic, just that that was a potential misreading; it seemed slightly xenophobic at best, given the reality that a combination of healthy market for labour and an economy open to free movement of labour naturally gives rise to immigration.
Plenty of countries design policies to encourage immigration, of the right people, for different values of "right". Your assertion seems to me to be flat out wrong; the qualification of "looking to increase your population" seems semantically meaningless in this context, as it is assumed in encouraging immigration.
I also strongly dispute your assertion that if the EU didn't have freedom of labour, then ordinary Germans would be better off, on far more grounds than DuncanIdaho. Germans would be at least worse off from lacking freedom of labour themselves (these things are normally reciprocal); and they'd have a lot fewer opportunities to trade, and more obstacles, without all the rest of what the EU brings to the table. Furthermore, the character of the European continent would be dramatically different; I think it's questionable that it would have been as peaceful has it has been. Germany would still be split without the EU, for one thing.
No, obviously you don't see at all. My point was there's no benefit for a country to create more jobs than it has people. The rest is just projection. It must be easy pride yourself in a good post when you respond to things people didn't write.
>From a strict economic point of view, there is no surplus of jobs. The price of labour should rise until the demand for labour abates; and the German workers would be better off. To the degree that that isn't happening (though Germany's population overall is decreasing, not increasing), it is because Germany has an open economy with free movement of labour.
Which was my point. This doesn't benefit the Germans. They would have been much better off allowing the price of labor to rise, which would have meant broadly-shared prosperity. As it is, only the large corporations and the state will benefit. But that was the point of the EU, wasn't it?
> If you're attacking that, you're attacking the whole foundation of the EU, and I don't want much more to do with you.
Oh my! Has the EU become a sacred thing now? It was a stupid idea, or at least a stupid implementation, one that Europe will be regretting for generations. Personally, I try to see the humor in it all - beyond that it's not my problem. Now, if you'll excuse me I need to find a soft shoulder to cry on now that you don't want anything to do with me.
Specifically, I live, work and travel in many different European countries, none of which are the country of my birth; and so too does my (German) girlfriend. The way of life I've experienced would not be possible without the EU or something very like it. Your opinion, as expressed, is in opposition to my way of life. That's the source of the vehemence of my opposition.
(Hopefully you'll note that I am neither a state nor a large corporation, yet I've benefited in many different ways.)
(This nationalistic notion that nations are important, that they should look after their own above others, I think is responsible for many evils in history, some very recent. I think humanistic cosmopolitanism is far better than "us for ourselves" ideologies.)
These people will become centres of new productive hubs, where there has be nothing of the sort thus far.
It is just globalisation on smaller scale. Europe is trying hard to integrate and mix all the countries and cultures in Europe to the level that would make warfare between their citizens too costly to anyone.
That's what the Germans thought, originally. Turns out to be wrong. If you move to a new place and live there for a few decades, raising your family there, you don't leave unless you don't have any choice. That place is home, especially for your children.
>Europe is trying hard to integrate and mix all the countries and cultures in Europe to the level that would make warfare between their citizens too costly to anyone.
Yes, and it's not working. Even the leaders acknowledge that now. And before they get too comfortable they should remember Yugoslavia tried to do the same thing.
>Yes, and it's not working. Even the leaders acknowledge that now. And before they get too comfortable they should remember Yugoslavia tried to do the same thing.
Hmm. Saying its not working is rash. It didn't work as well as optimists hoped for it also didn't works so bad as pessimists hoped for. What leaders are realizing now is not that EU integration isn't working. It's just that current approach is losing steam.
And one should note, that current approach was more of an amalgam of inertia and half assed attitudes than something coordinated and sincere.
Beneficiaries have been the former east and farmers. Italians can buy German milk that would otherwise be expensive.
Here's some speculative fiction on Germany without the Euro: the DEM is a very strong currency. Bankers drive fast German-branded but Eastern-europe-manufactured cars along a financial-sector corridor that stretches between Zurich and a much larger Frankfurt am Main and which has sucked the momentum out of the city of London.
Munich has some strength for being in the middle of this but has been hit hard by the loss of manufacturing jobs. Most regions are less fortunate still. Production for export is impractical. There's significant social unease, particularly against hard-working migrants from other European areas "taking german jobs".
There are many poor regions that haven't crossed over into services mindset and vast regions of poverty. Wealthy western states resent seeing all their taxes disappear to weaker regions. There's general dissatisfaction with the reunification project.
In short - a harsher take on the UK.
(I've no ideas about France.)
The reasoning is approximately as follows:
It was obvious by 1989 that monetary policy for European countries was de facto set in Frankfurt by the Bundesbank. The further you moved from the D-Mark interest rate the less D-Marks your currency would buy and reality would kick in inflating your currency. Mitterand had personal experience of this dynamic having been elected on a Socialist platform and ramped up spending without increasing taxes as much as would have been necessary to pay for the spending.
So he wanted a voice in European monetary policy, so a European currency with a central bank modelled on the Bundesbank.
So France wasn't duped at all.
One proposed end game I've heard is the solid Euro zone currencies (DE,AT,NL,LX,FI, maybe FR, eventually PL and Estonia, maybe others) seceding to a new currency which would end with the ECB managing two currencies.
The Euro, not as bad an idea as it looks in hindsight, though the scrutiny for countries that wanted in should have been much higher.