It would seem that the strongest member of a declining organization would want to leave the losing proposition. But, as French Premier Charles DeGaulle once exclaimed, “Nations do not have friends, they have interests.” For that reason, Germany will do all it can to ensure that the European Economic Commission and the euro itself endure.
A weak euro masks German economic strength, which allows more exports. The German economy is very strong with an unemployment rate around 5.5% — the lowest level since East Germany was reunited with the West.
And as detailed in an article in the Financial Times by James Wilson, ”German business upbeat on 2012 prospects,” the German economy will grow more in 2012. As reported in Wilson’s Financial Times piece, Germany’s economic strength has remained almost unaffected by the euro zone crisis. The unemployment rates continues to fall. Last month the Ifo index of Germany’s business climate showed an unexpected rise.
While exporters such as Siemens (SI, quote) have benefited from the euro zone crisis and the weak currency unit, the German financial sector has suffered.
The iShares MSCI Europe Financials Sector Index Fund (EUFN, quote) is down almost 30% for the past 52 weeks. Deutsche Bank (DB, quote) and Commerzbank AG (CRBZY, quote) are both off substantially for the last six months.