Germany Should Leave the Euro but Probably Can't

According to some, an underlying problem in the euro zone is the productivity gap between the creditor nations and the "Club Med" countries, 20 or 30 percent by some counts. Inside a currency zone like the euro, the way to reduce that imbalance is for the less productive countries to slash wages and payroll.... But whatever mitigation you could provide would do little to change the awful social reality of that adjustment. The alternative, of course, is to restore the currency markets. A 20-to-30 percent fall in the value of a new peseta or drachma would do a lot to make the southern countries more competitive.... Still, a forced exit from the euro would be seen as humiliating. And it would foster precisely the sort of resentment that European politicians have spent the last 60 years trying to avoid.... So why not have Germany walk out instead? The economic effects might be much the same as forcing Greece, Spain, or Italy to exit. The move could be spun externally as a self-sacrificial move by a noble Germany to correct the productivity imbalance in the EU. Internally you could sell it on the basis that German taxpayers would no longer be on the hook for all the presumed spending excesses of the South. In other words, a German exit might be a way to throw out the bathwater without losing the baby. One problem with this strategy, if it can be called that, is simply that a break-up of the euro may not in Germany's short-term interests.