Sir, When Jürgen Stark (“ German prudence is not to blame for the eurozone’s ills”, February 12) claims that the difference between Germans and others is that the Germans have lived within their means and others have not, he conveniently forgets that the Germans had considerably more within which to live than the others. “Conveniently”, because the answer to the next question — how is it that they had more — is most inconvenient.

They had more because they enjoyed an inordinate competitive advantage due to the more than 20 per cent undervaluation of the euro in comparison with the other eurozone currencies, resulting from their higher productivity at the inception of the euro. This undervaluation permitted Germany to accumulate a €1.2tn trade surplus with the other members. Stark et al would have you believe that this surplus is not a matter of real exchange rate differences, but rather, one of German virtue standing firm against the vice of others.

Since internal devaluation would work only for those whose foreign trade (imports and exports) to GDP ratio is comparable to that of Germany — and there are no such member states — Mr Stark’s moralising is the voice of self-interest.

Peter Róna

Kisasszond, Hungary

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