the value of Germany's net foreign assets - which, as the chart shows, are pretty large. Their answer is that a 20% appreciation would reduce the value of those assets by about E160bn, or 7% of German GDP. That is a big hit. But remember that German creditors will also take a hit if these countries ultimately have to default. As the second chart shows, 7% of GDP looks manageable compared to the price that Greece or Portugal would pay, if they were forced out of the euro, and their domestic economy subsequently depreciated by 20-25%. (Though, as I said earlier, precisely for that reason, you would expect them to restructure in that instance as well.) It's interesting to compare these numbers with the massive positive shift in the UK's balance sheet after the pound fell by 25%, on a trade weighted basis, in 2008. By the end of 2008, net foreign liabilities of 352bn had turned into net foreign assets of 92bn - even though we ran a balance of payments deficit throughout and exporters had not even begun to start taking advantage of the lower pound. Amazing what a little - OK, a large - depreciation can do. Of course, it is precisely because they can't restore their national balance sheet and competitiveness the old fashioned way that Greece and the rest are now facing such a miserable few years within the euro. But what if Germany left, what would the new eurozone look like? Graham Turner has