On holiday last week, whilst idly counting the number of grains of sand, and wondering if this vast number is exceeded by the number of planets in the universe (it was Thursday, and the golf course was closed) my musing veered frighteningly (for me) towards the eurozone, and the upcoming German election. Now, I know that some of you guys in the US are a bit bored with the endlessly complicated and ultimately doomed structure that makes up the single currency, but indulge me for a couple of paragraphs.

For a while now – actually, since Euro sense (sic) were worth anything – I have been boring whoever was silly enough to listen, about the conundrum of austerity being force fed to the people of the southern european countries, with seemingly no similar hardship being felt in Germany and its wannabes. So it was with interest that I noticed that the IMF last week slammed into Germany, and I think the timing, close to the election is interesting. They have basically said that Germany has to cut its trade surplus in half, or in IMF speak `Fiscal over-performance should be firmly avoided`.

This brings out into the open, a simmering argument, with the IMF quietly furious about being emboiled in helping to save a single currency project that has the means within its membership to recycle surplusses and self heal. The IMF further ventured that (the real problem !!!!) Germanys currency is under-valued by some 10%. They didn`t go on to say this, but other studies indicate an over-valuation of some 15-20% in the southern european area. And this sounds about right to me, the only thing getting in the way therefore is the single currency.

So, the September election in Germany will be of huge interest. Will it result in an anti Euro vote, almost certainly not, but it will be interesting to see what (if any) sacrifices are to be asked of the population in order to keep the monetary union intact. And, it will be even more interesting to see how the rest of Europe responds to the manifesto. Watch this space……..