“German stocks: it is really a fight of olives against autos.  Germany will do well if the current EUR structure, which benefits Germany, continues.  This is so even if smaller EURozone countries leave the EUR in economic agony.  If the EURozone implodes it is likely it will do so in 1 of 2 ways, one bad for Germany, one slightly less bad.  If Germany leaves the EUR and adopts the Neue DM, a harder currency Germany will hurt its autonomies, and thus their share prices.  Olive Tree Europe will romp and this is where you should put your money.  So you don't want to hold German exporters here though domestic German shares may do a bit better.  If, however, a Northern Eurozone block led by Germany (DE, NL, maybe, just maybe Be) form the NeueEUR, the negative effect will be lessened but not eliminated.  Eurozone cheer leader France, by the way, also has Olive Trees though it has some autos too (Jeremy Clarkson might disagree).  In all scenarios, good German companies will be good investments in the longer term because Germany is fulfilling its 200 year potential as the leader of Europe, like it or lump it, Britain and France.  Whether this German led Europe is able to operate all its economies successfully is another question.  Spain and Italy will still have olive trees and Germany will still have autos and machinery.  One has high barriers to entry, the other doesn't.”

David Fuller's view

Thanks and well said.  I have often said that Germany benefitted from the soft Euro, but it has also coped with a strong DM in the past, not least due to its extraordinary manufacturing ability.