Here's Why Germans Support the Euro

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Pforzheim, Baden-Württemberg. If you want to see why Germans continue to support Chancellor Angela Merkel and the euro, you should visit this state in southwest Germany, the third-largest in the country and the heart of the nation's industrial machine.

Think of it as the Orange County of Germany: wealthy, conservative and slightly suspicious of foreigners. This is the home of Daimler, Porsche and SAP, Europe's largest software company.

Few of Germany's 16 other states have benefited more from the country's export-led boom than Baden-Württemberg. Its unemployment rate of 5 percent to 6 percent is among the lowest anywhere in Europe.

I am visiting members of my extended family who moved from Romania between 25 and 50 years ago. Ethnically German, they were immediately granted citizenship and chose to live here because of the concentration of high-paying jobs. One works developing hardware for cable TV, another is in industrial machinery, a third just retired from the construction business, a fourth is in dentistry.

When I brought up the euro and Germany's membership in the euro zone, all of them voiced a grudging support. There is a weariness of the seemingly endless requests for Germany to backstop the rest of the continent. It is not said in so many words, but the idea of "Germany first" is very much on everyone's mind.

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They want their politicians to solve the problems of Germany before those of the rest of Europe. One example: Recent flooding in southern Germany has been the worst in centuries, but there has been widespread criticism that assistance has been slow in coming to those who lost their homes.

"When there is a disaster somewhere else in Europe, the Germans are the first to help, but when there was disastrous flooding here, our own government was slow to help," one of my cousins said over a dinner of Kartoffelsalat (potato salad), Kasefleisch (meat with cheese), Apfelkuchen (apple tart) and local rose wine, in a village near Pforzheim, about 50 miles south of Stuttgart and less than an hour's drive from the French border.

But don't think any grumbling about the euro means that Germans want out of the euro zone.

"Germany depends on exports now," one of my cousins said. "We will not leave the euro, because it helps us too much."

Most Germans do not know much about the inner workings of the European Central Bank, but everyone here knows two facts about the euro zone: Germany has a higher economic output per worker than its southern European neighbors, and the other European countries can't devalue their currencies to be more competitive, as they did in the past.

That's why every one of the dozen or so Germans I have spoken with—from a wealthy real estate developer in Berlin, to a retired construction contractor in Villingen-Schwennigen, to members of my extended family living near Pforzheim, continue to support the euro.

To understand why, you have to look to the heart of the economy in this region of southern Germany: small and midsize manufacturing, known here as the Mittelstand (midsize company). It's a business that's slowly disappearing in the United States: thousands of small companies (of 20 to 500 employees) in auto construction, electronics, optics, metallurgy, and clockmaking, to name just a few. What they all have in common is that particular German genius: precision engineering.

Here's the key fact: About 40 percent of all this industrial output is exported.

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That's why Germans who shrug when I ask about the ECB back the euro: They believe it has helped make them even more competitive against their fellow Europeans.

Every German I have spoken with is very careful not to accuse Southern Europeans of being lazy, but it's clear they all believe that the German willingness to work harder than everyone else is at the core of this country's post-war success.

And that's why most people here are conservative and continue to support Merkel, even though they may think she's somewhat colorless and prone to flip-flop on many issues.

That support is starting to shift, however, because politics is changing. Baden-Württemberg's Landtag (state assembly) has been controlled by the center-right Christian Democrats since the state was created in 1951. But not anymore.

Here's two ways you can tell the old party politics matter less: A Green Party-led coalition won control of the state assembly two years ago, and on the night I was visiting my relatives in a village near Pforzheim, the local meeting hall was packed with voters who wanted to hear the five candidates for Burgomeister (mayor), four of whom had no party affiliation.

My cousins talked enthusiastically about Green politics, which have finally entered mainstream thinking after gestating for 40 years.

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They said the old party lines—the wealthy and upper middle class supporting center-right parties like the Christian Democrats, and the workers backing center-left parties like the Social Democrats—are starting to dissolve. Many perceive that both parties have run out of ideas.

But don't kid yourself. There might be plenty of energy for "going Green," but when I asked a cousin what was foremost on the minds of local citizens, he didn't hesitate to answer—jobs. It's a pretty simple equation: Support for the euro is higher in high-employment regions like Baden-Württemberg than it is is high-unemployment regions like the former East Germany.

And it is on that statistic—job growth—that the future of the euro is likely to be settled. Even in Germany.

—By CNBC's Bob Pisani