Germany has resisted efforts by other countries to extract even more money from the German taxpayers.

If Germany does not like paying for keeping the Euro, then Germany must pay its workers enough that they can import as much from other Eurozone countries as Germany wishes to export to them.

It was clear from the very beginning that the Euro was not supposed a wealth transfer mechanism.

Current accounts surplus; no wealth transfer. Pick one.

You are basiscally whining about not beeing able to steal more from us.

No, you're whining about basic arithmetic:

Total exports to other countries
+ total wealth transfers from other countries to you
=
total imports from other countries
+ total wealth transfers to other countries.

And that's really not negotiable unless you want to abolish double-entry bookkeeping.

- Jake

Friends come and go. Enemies accumulate.

But the euro is a wealth transfer mechanism. It transfers wealth from the poor to the stinking rich. So from the poor in both Germany and Greece to the stinking rich in both Germany and Greece.

If German workers got paid enough to keep Germanys trade balanced, they could afford more holidays in Greece and the workers in Greece could then afford more industrial goods from Germany. Instead we get Harz in Germany to push wages (though they call it inflation) down and slaughter of jobs, wages and rights for workers in Greece.

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Germany has resisted efforts by other countries to extract even more money from the German taxpayers.

When you have an agreement to keep exchange rates pegged to each other, each side should be responsible from defending its own currency from appreciation, because trying to defend your own currency from depreciation is an untenable position. This is because you can always print more of your own currency to buy foreign currency, thereby devaluing your currency ("defending your currency from appreciation") but you cannot always buy your own currency with your foreign currency reserves, thereby increasing the value of your currency ("defending your currency from depreciation"). The recently established one-sided bound on the Swiss Franc's exchange rate is an example of this - the Swiss bound is unassailable if the Swiss Central Bank chooses to defend it. It will never run out of reserves, rather it will accumulate reserves, trying to enforce its stated policy.

Bundesbank refusal to hold its end of a stable exchange rate deal (granted: nobody made it explicit that it was everyone's obligation to defend their own currency from appreciation) ejected the Pound and the Lira form the European Exchange Rate Mechanism 20 years ago. The EU should have recognised that this made stable exchange rates within it unsustainable and stopped pursuing them as a policy goal. The Euro project should have been abandoned by the French side. Unfortunately for us all, the Bundesbank did defend the DM from appreciation when it looked like it was the French Franc that would be ejected next.

Therefore, contra your claim I quote at the start, the Euro is a huge wealth transfer mechanism towards intra-EU net exporters (notably Germany, but also the Netherlands and Finland) because it put all the economic burden of the fixed exchange rate regime on the shoulders of the deficit countries (which would naturally see their currency depreciate if if were allowed to float).

Keynes recognised that devaluation, deteriorating terms of trade and indebtedness are in themselves a penalty that deficit countries have to pay, so at Bretton Woods he proposed that, in order to restore a sustainable fixed-exchange-rate system (then the Gold Standard) this system would have to impose some sort of penalty on surplus countries. The US, then the world's exporter of last resort, "took the position of absolutely no". This is typical of exporters of last resort in international trade crises (see China and Germany at the G20 in 2009).

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

What is "other countries"? It isn't "other countries" that "extract wealth" from the German taxpayer. It's European (and prominently German) banks. Greece for example saw precious little of the first loan deal money, and is assured not to see any money from the latest deal. It all goes to service unserviceable debt, which should have been repudiated (or generously restructured) in early 2010. That the German government decides to bail-out the banksters claiming that it has to do that because of the "lazy Greeks" or all the other racist stereotypes that a Bild reader can be driven on, is a game a couple of centuries old at least: nationalism and racism in the service of local elite interests. In fact most sane people (Die Linke prominent among them) were against the first loan, on exactly these grounds.

I would be very careful about using the term "steal" in the context of Greco-German relationships. First of all Greece was among the countries that helped German recover in the 1953 debt settlement (without which Germany would never have gotten back on its feet), and also Germany has never repaid back the forced loan that the Nazi occupation forces forced on the Bank of Greece, taking pretty much all of the gold in its treasury. The loot was kept by the FRG without repayment, pending reunification. After reunification it became "old history". This is not about war reparations (a separate matter) but about an actual debt, never repaid but never forgiven also by the Greek state. At this stage of Greco-German relations it is a sure bet that the (quite defendable legally I'm told) loan claims will be put on the table by the successor gvt, especially if it is of the left.

The road of excess leads to the palace of wisdom - William Blake