The Guardian, June 24, 2012
German finance ministry officials fear that a collapse of the eurozone would decimate the country’s economy, driving thousands of companies out of business and putting an additional 2 million people out of a job.
A ministry official told Der Spiegel of the latest projections, which belie any sense that Germany, the richest and most powerful eurozone economy, is negotiating a solution to the crisis from a position of overwhelming strength.
In the first year after a breakup, the German economy would contract by 10% and the number of unemployed would soar above 5 million, the ministry predicts. Germany’s current jobless figure is just under 3 million, the lowest in two decades.
Hundreds of thousands of jobs would move abroad, and thousands of companies would go bust. The country’s deficit would shoot up as tax income fell and the government was forced to increase expenditure, from bailing out banks to spending more on social welfare.