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The Eurozone has broadly neutral external trade and current account balances, as the currency is allowed to float freely. Any Northern Eurozone or "Neuro" will likely have a hawkish central bank and broadly neutral current account balance. Since Germany will do its darnedest to retain a sizeable current account surplus and it will be an even larger percentage of the Neuro economy than it is of the Euro economy, there must be some Neuro countries with structural trade/current account deficits. The Euro crisis will reproduce itself within the Neuro unless the Neuro is deliberately devalued (i.e., the "currency war" that Germany accuses everyone else of engaging in).

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Mar 10th, 2013 at 07:07:11 AM EST
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