"I cannot find anywhere on the internet a database showing the FRF/DEM and ITL/DEM evolution from 1970 to 2000.

"What I am trying to do is to plot the trade & services balance between Germany and France on one side and Germany and Italy on the other side (yet France alone would be a good start) together with the evolution of both forex before the EUR.

"From memory, the DEM always appreciated vs. both currencies whilst the trade balance remained positive for Germany. Thanks for your help".

Eoin Treacy's view Thank you for this interesting question. Subscribers may have some additional input. I posted a number of charts for legacy European currencies versus the US Dollar in Comment of the Day on November 23rd 2010. Bloomberg no longer carries data for cross rates for the legacy Eurozone currencies. However, they do still carry spot rates for these currencies versus the US Dollar. Since all currency quotes are ratios and we have access to Italian Lira, French Franc and Deutsche Mark, US Dollar spot rates it is possible to reverse engineer the cross rates that existed prior to the adoption of the Euro.

I created proxy values for the Italian Lira, French Franc, Greek Drachma, Portuguese Escudo, Spanish Peseta and Irish Punt (quoted the other way around) versus the Deutsche Mark. We have more history for some than others but a common thread of underperformance versus the Deutsche Mark was evident throughout the 1980s and '90s. This persisted until the European Exchange Rate Mechanism (ERM), was established and culminated in the final pegs against the Deutsche Mark. The only trade data I found was between France and Germany and it only dates from 2000. However, a widening trade deficit is evident over the last decade.

These charts demonstrate the strength of the Deutsche Mark prior to the creation of the Euro. Most currencies had been falling against it for the better part of 20 years. From the perspective of German exporters this must have been difficult since their foreign competitors were gaining an advantage by selling in a progressively weaker currency. France, Italy, Spain and other peripheral countries gained access to Germany's low cost of credit but opted to forego the ability to devalue their respective currencies. Germany has emerged as an even more dominant economy following the establishment of the Euro. It is not only richer than its neighbours but its businesses have flourished in an environment where other European countries were not familiar with relying on cost and labour efficiencies in order to compete. As one of the greatest beneficiaries of the Euro's creation, Germany's leadership is now a prerequisite for a solution to the current problems.