Economically-sound Germany at risk if Greece falters

(CBS News) BERLIN - Why can't the Euro nations agree on a plan? In Germany, the situation is being compared to Titanic, one of the greatest disasters in history.

Since Euro Zone is like the Titanic heading for an iceberg called Greece, there's plenty of concern on the first-class deck called Germany. If Greece goes down, it can take even Europe's biggest economy with it.

"I believe Europe is right in a crossroads right now," Gerhard Hofmann, director of the German Cooperative Bank Group, told CBS News.

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"We are entering a critical zone now," Hofmann said. "We cannot go on like this forever."

To go on like this means to continue to use the wealth generated by Germany's efficient industries to underwrite the debts of Europe's foundering economies. When they're small -- like the economies of Ireland, Portugal or Greece -- the sums are manageable. But, when they are big -- like Spain -- it's different.

"The question is not how much has already been committed to the European project, but what will we have to do in the future?" Hoffman asks, adding that the factors of how much has to be given and at what rate also plays into the equation.

Already there are signs people have had enough. Efruz Ongun hoped to enter medical school and wonders if she'll spend her working life paying taxes to pay off other people's debts.

"One day it's Greece, the other day it's Spain, and it will continue," she said. "And I just ask myself 'Until when? Until Germany is also starting to have a crisis and need money from other countries?'"

In the short term, though, Germany is actually seeing some benefit from the crisis, including incoming investment through foreign money seeking refuge in German property.

The flow of money in Europe isn't all from north to south. There's a hidden flow as well in the opposite direction, money fleeing the uncertainties of Greece and Spain and coming here, looking for security in German banks.

"That is what we call in Germany 'brick gold,'" developer Marc Weise said. He believes it is the beginning of a boom.

"It's absolutely an alternative," he said. "People love to invest into brick gold in Germany and especially in Berlin."

Germany needs an intact Europe. Most of its exports -- particularly at the hi-tech end -- go to the rest of the European Union. Already, at one laser manufacturer, they claim their orders are down. The Titanic of the Euro Zone may already be taking on water.

  • Mark Phillips

    Mark Phillips returned to the CBS News London bureau as a correspondent in 1993. He has covered many major stories since then, including the war in the Balkans, the death of Princess Diana and the weapons inspection conflicts in Iraq.

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