Will German Growth Push Euro Interest Rate Up?

How much longer will Germany want or need to be a member of the euro zone is a question that's been increasingly asked since the start of this financial crisis.

However, with the stunning strength of the bounce-back in Germany becoming clearer and clearer with every data series release, this is a slow burn story that could easily catch fire and engulf the euro zone.

The single currency has always been something of a political creation rather than an economic one. But increasingly it's economics that will determine its future, rather than politics. Put simply, it will not be too long before Germany doesn't need its euro zone partners and certainly won't want to pay for their problems.

As Goldman Sachs' Jim O'Neill pointed out to CNBC last week, China will soon be more important to Germany as an export market than France. Berlin's relationship with Paris, traditionally the beating heart of the EU, is already weakening.

Economic realities would suggest that process is only going to accelerate and if Berlin is less worried about Paris, then what about its relationships with Athens, Lisbon or Dublin?

With the crisis making it clear that Germany is going to have to provide long-term financial help for much of the rest of the region, one has to wonder how interested the country's leading businesses are in footing the bill.

The euro was partly created to take currency volatility out of the equation for the region's companies and in the process lower costs. However, if the bulk of your trade is outside the euro zone then why do you need to worry about currency stability and why do you need to financially backstop the rest of the region?

To be fair, there are some upsides to membership. Possibly the biggest one comes from the very weakness of the rest of the zone. Greece, Ireland and Portugal have all done German manufacturing a favor this year by driving the euro lower, in the process making German exports much more competitive.

However, borrowing a cheaper currency from Greece is not a long-term strategy especially from the Bundesbank's perspective. If the German economy keeps growing, then it won't be that long before a case could be made for higher rates. Just look at Sweden, where the Riksbank has already pulled the trigger.