Schroders' Jolly: Germany 'loves' being part of eurozone

Bob Jolly, head of global macro at Schroders, has said Germany "loves" being part of the euro and suggested neither Greece nor Italy would exit the single currency for fear of the consequences.

"The competitive environment is sweet as you like for Germany. It loves being in the euro," Jolly said. "Germany has a massive benefit from being the cheapest member of the currency. It is much more competitive than it was, dramatically so against the likes of Spain and Italy. The real issue in Germany will be controlling inflation." Jolly said Greece would see its output contract by between a quarter and a third if it implemented the necessary austerity measures, whereas an exit from the euro would result in a contraction of 50%. Italy, by contrast, is "near enough self-financing"...