# SPIEGEL Interview with Linde CEO



## Firefly (6 Feb 2012)

An interesting interview with one of Germany's leading exporters on the future of Europe and the growing debt crisis.

http://www.spiegel.de/international/business/0,1518,809341,00.html


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## Purple (6 Feb 2012)

Thanks Firefly, very interesting.


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## Firefly (6 Feb 2012)

*"Reitzle:* If we don't manage to discipline the debt-ridden countries, Germany will have to withdraw.


*SPIEGEL:* Excuse me? Germany is supposed to withdraw from the euro and introduce its own currency? The consequences would be tough: This currency would appreciate, and German industry would have trouble selling its products abroad. 

*Reitzle:* Of course it would lead to appreciation of the deutsche mark, the northern euro or whatever currency we would then have. But it would soon be less than we fear. Although unemployment would rise in the first few years, because of declining exports, we would come under growing pressure to become even more competitive. And within only five years, Germany could be in a stronger position relative to Asian competitors.
"

And he's right....and where would we be without Germany backstopping our budget deficit then???


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## Chris (10 Feb 2012)

Good quote you pulled there. What he doesn't elaborate on is that a stronger currency will mean that raw material import prices will plummet. Germany pretty much imports all oil and gas, and that bill would become significantly cheaper. He certainly is right that in the short term there would be an impact on exports, but I believe this impact would be a lot smaller than many think. People who buy German made products are willing to pay a premium because of the quality they believe they get, and I think that many people will continue to pay such a premium.

The other thing is that proof lies in the history books. After WWII, then economics minister Erhard was told by allied occupiers and socialist opposition that under no circumstances should he allow a strong currency or get rid of price and wage controls. He did the exact opposite and because of those actions Germany boomed more than any other country in the world. Basically what happened is that a strong currency encouraged capital creation; capital creation allowed more businesses to come into existence and more existing businesses to expand and become more productive; higher productivity drove down prices of producer and consumer goods and increased employment; this made money and income more valuable in real terms resulting in prosperity for everyone in society.
He outlined all the opposition he got and what he actually did in a great book called "Wohlstand fuer Alle" ("Prosperity for Everyone"), but I am not sure if an English translation is available.


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