The danger of a breakup of the euro-zone has pushed Germany to a verbal intervention, pledging to do “anything” to save the euro. The president of the ECB, Mario Draghi, first used these strong words. Germany repeated them in two statements: the first was together with the French, while the second was with the Italians. It is still to be seen what Germany and the ECB are really willing to do. However, despite the eroding of the euro’s popularity in the German public, the euro-zone’s locomotive has very good reasons to take some losses for the sake of the common currency. The value of the euro, even at its strongest days, would have been significantly weaker than the old Deutschmark. Germany enjoys a weaker currency as it helps its export machine. The country has less competition from countries within the euro-zone, that would have otherwise had a weaker currency. It also has an advantage over external competitors thanks to the euro. This was acknowledged by the German Council of Experts, also known as the “Wise Men” or FÃ¼nf Wirtschaftsweisen in German. They see a loss of of no less than 3 trillion euros is a scenario where the European Monetary Union falls apart. Ambrose Evans-Pritchard mentions about this in article discussing other euro-zone issues. Also a major German company fears this scenario: Michael Heise, the chief economist of the German insurance giant Allianz also sees an appreciation of 15-20% in the D-Mark that would lead to a drop of 5% in GDP within a year. And this mess will likely continue far longer according to Heise: Over four or five years after a break-up of the currency union, the German economy is likely to suffer production losses of up to 25%, compared with normal economic development It’s also important to remember that German institutions are heavily exposed to Spain and Italy. So will Germany take a small loss now to prevent a bigger one afterwards? They could start by allowing the ECB to launch a full QE program, among other options that the central bank has. See the ECB preview for all the options for turning a corner in the crisis. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam Forex News Today: Daily Trading News share Read Next Forex Daily Outlook July 31 2012 Anat Dror 9 years The danger of a breakup of the euro-zone has pushed Germany to a verbal intervention, pledging to do "anything" to save the euro. The president of the ECB, Mario Draghi, first used these strong words. Germany repeated them in two statements: the first was together with the French, while the second was with the Italians. It is still to be seen what Germany and the ECB are really willing to do. However, despite the eroding of the euro's popularity in the German public, the euro-zone's locomotive has very good reasons to take some losses for the sake of the common… Top Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.