Many in Germany are nostalgic for the deutsche mark. A poll shows despite the euro's strength, it's often mistakenly blamed for inflation
The euro is enjoying its days in the sun. It has gained steadily against the US dollar since early 2006, and steadily against the British pound since late 2007. More international investors have used it over the past few years as a holding currency and the American rapper Jay-Z gave it bling status last November by flashing euro bills in a music video.
But more and more Germans are disgruntled with it, according to a new poll published by the Association of German Banks (Bdb) on Friday.
The association says the number of those dissatisfied with the euro in Germany has risen: A full 34 percent of poll respondents now want a return to the German deutsche mark.
The main reason given was a belief that the euro is to blame for inflation. Real prices did rise after it was introduced as a cash currency in 2001—leading to the nickname "teuro" in Germany, a play on the word for "expensive." But 53 percent of respondents blamed the euro for price hikes over the past year.
Manfred Weber, the BdB's general manager, says this impression is false. "Since the beginning of the currency union, inflation has been relatively low, at around 2 percent on average," he told the Berliner Zeitung newspaper. "The euro is therefore one of the most stable currencies in the world, and is no less stable than the deutsche mark."
But the yearning for the deutsche mark also has a lot to do with a nostalgia for better times. "For many people the deutsche mark is still a symbol for the economic upswing of the post-war years," Weber said. "They regard it as the stable currency par excellence." But impressions might change, he said, since the euro is laying a foundation for future high living standards in Germany.
However, some economists think a strong euro will slow Europe's economy as a whole, since a strong euro makes European goods more expensive. Jean-Claude Trichet, president of the European Central Bank—whose low interest-rate policy has helped keep eurozone inflation in check—warned in March that exuberance in the currency markets for the euro could stifle European growth.
German growth has already been affected, Peter Bofinger, an economist at the University of Würzberg and a German expert on currency policy, told SPIEGEL ONLINE last February "German exports have stagnated in real terms since August," he said. "The rising euro exchange rate...carries substantial risks for an export-oriented economy like Germany's."
Whatever the risks of a strong euro, many Germans seem to be betting on a return to times past. A Forsa opinion poll in early 2008 found that 34 percent of all Germans still had coins and bills from their old currency—and the German Central Bank estimates that a total of 14 billion deutsche marks are still in circulation.