GÜTERSLOH, Germany, April 30, 2013 /PRNewswire/ --
Community currency ensures growth, wealth and employment - benefits are retained even in case of high write-offs due to debt cuts for South-European crisis states
Germany profits considerably from the Euro, as a current model calculation of Prognos AG shows that was drawn up on the order of the german Bertelsmann Foundation. "Germany's membership in the currency union reduces costs for international trade and protects it from strong exchange rate fluctuations," Aart De Geus, chairman and CEO of the Bertelsmann Foundation, said at the annual press conference of the foundation in Gütersloh.
Even if Germany was to lose most of its claims due to the different Euro rescue measures, the economic benefits from the currency union would still more than balance out this loss. "A return to the deutschmark would cause considerable economic damage. Germans would lose income and workplaces," said De Geus.
The study proves: Without the Euro, growth of the real gross domestic product (GDP) in Germany would be lower by about 0.5 percentage points per year. Adding up the growth benefits of Euro membership results in a profit of nearly 1.2 trillion Euro between 2013 und 2025. This corresponds to about half of the entire German economic output in 2012.
The Euro is good for the citizens as well: The average extra income per citizen between 2013 and 2025 will be about 1,100 Euro per year. The deutschmark scenario would also deteriorate the situation on the labor market. Reduction of growth of the gross domestic product by 0.5 percentage points would cause loss of about 200,000 workplaces.
The benefits that Germany has from its Euro-membership are even present if considerable claims towards the four Southern-European crisis countries Greece, Portugal, Spain and Italy are lost in the next years. Additional calculations were based on write-offs of 60 percent of the claims per country. The higher public debt in this case or the fiscal consultation demand increased by this would dampen the economic dynamics, but the effects would remain within narrow borders.
"A Europe without the Euro would fall apart politically as well and would be a losing player in international competition," said Aart De Geus. "To ensure economic prosperity and stability, we finally need to remove the efficiency and legitimation deficits, which means that the present currency union needs to be developed further into an economic, social and political union. Only then will the common currency ensure growth, wealth and employment all over Europe."
For questions, contact: Dr. Thieß Petersen
For more information online, see: http://www.bertelsmann-stiftung.de
SOURCE Bertelsmann Stiftung