Is Germany willing to repeat its ost-mark experience?

After the Berlin Wall fell and the prospect for German reunification became apparent, the German government had a difficult choice to make. At what value would it convert the ost-marks of the East Germans into the Deutsche marks of the west?

The decision was made to bite the built and convert them at a one-to-one ratio even though the ost-mark was worth a fraction of a Deutsche mark on the black market.

The German government made the difficult decision that it was in the long-term interest of the reunited country to essentially transfer a great deal of wealth from the prosperous West to the impoverished Communists East.

The have a similar decision to make today. Are they willing to bite the bullet and transfer vast amounts of German wealth to less productive EU states for the sake of greater good.

I contend that they will, eventually. What is unclear is whether they are willing to make the move now or make it at a later date. It will politically unpopular in the short-run (and probably over the medium-term, as well) but it is necessary to preserve the euro.

The euro, you’ll recall, is not a financial construct, but a political construct, designed to keep Europe from breaking into open warfare every 20 years the way it did from around 1800 to 1945… Germany will come to the rescue of the euro someday, though perhaps not today.