Germany relies on the weakest members
It's probably because of a truth that no one likes to talk about: Germans have benefitted greatly from the euro -- it's given them an artificially weak currency. Normally, one would hate to be paid in a weak currency -- among other things, it makes their vacations abroad more expensive. But for Germany, a weak currency has been its ticket to prosperity. If the Germans would leave the euro, they would actually be shooting themselves in the foot.
Consider that Germany, which has a generous social safety net, relatively high wages and just 80 million people, is the world's second-largest exporting country. The euro has played a significant part in this. German exports have more than doubled since they went on the euro in 1999, going from around 469 billion euros to well over a trillion euros in 2010. The rate of growth was also twice as fast as other nations in the zone. While there is no doubt that the Germans make quality stuff, the reason they are able to export so much at competitive price points is because they are operating with a relatively cheap currency.
Germany's export engine works two ways. First, it exports more to non-eurozone countries because the exchange rate of the euro is weaker than it would be, all things being equal, if it had stayed on the Deutsche Mark. That's because the euro encompasses 17 nations, many of which are "weak," therefore bringing down the value of the currency relative to the dollar and the pound. China gets a lot of flak for artificially manipulating its currency to maintain its exports. Germany doesn't have to do that – all it needs to do is sit back and watch another weak eurozone nation go down in flames and its exports get more competitive on the world stage.
Take the latest export data out of Germany. Even though the eurozone is in crisis and the region looks to be headed for another recession, German exports in September rose nearly 1% from the previous month to 91.3 billion euros, which is the highest level since records began. In August, when the crisis hit overdrive, exports were up 0.2% from the previous month. Meanwhile, imports into Germany fell 0.8% for September, increasing the nations burgeoning current account surplus. Normally that would cause Germany's currency to strengthen, but since there was trouble down south, the euro weakened, making German exports even more competitive.
The second way the euro helps Germany is that it has given them a much larger market to dump their goods. Around two-thirds of German exports go to members of the eurozone – that's just the 17 members part of the common currency, not the 35 that are part of the European Union's free trade area. The euro makes business much simpler as it eliminates foreign exchange risk. An artificially low euro in Germany means an artificially high euro in weaker countries like Spain and Greece. That means those countries can afford to buy German goods. It's therefore no wonder why German cars, white goods, electronics and machinery dominate the eurozone.
In Greece, a country that arguably shares much more in common with its Middle Eastern neighbors than its eurozone partners, being on the common currency has been a bit of a curse. With access to new credit lines, the Greek populace and its government went on a spending spree. Much has been discussed about how the Greek bureaucracy paid itself lavish wages. While true, that is just part of the massive sovereign debt bill the country rang up in the past decade. The country also paved lots of roads, constructed new airports, tunneled new subway systems and procured state-of-the-art weapons for its military. Behind most of these projects were German companies.