@lispm: imports would be cheap, and German labor would be very expensive. Germany (like most of Europe) imports raw materials, adds value with labor, and exports finished goods. BMW could not export made in Germany cars with a profit anymore; this could still be good for BMW (just like Apple, they could build everything in China), but it would be bad for the Germans.
We still have factories in Germany and outside of Germany.
Each BMW uses a lot of materials and energy for production. That would get a lot cheaper. Plus BMW imports lots of parts from other countries.
We really had that discussion years ago. When the West German Deutsche Mark was getting stronger all the time. BMW expanded in Europe and outside of Europe. Still it kept its factories in Germany. The quality of its workforce is extremely high.
@lispm: "the raw materials would get cheaper" doesn't mean anything for export. Raw materials for export get in, and they get out inside the finished goods - at the same exchange rate. The exchange rate is neutral for raw materials that get reexported.
Instead, relative labor cost would change. That labor is high quality? Yes, it is. But importers wouldn't buy it "at any cost". Higher price, same value -> less demand.
As for the DM getting stronger all the time: It did so in time, while German relative productivity was rising. On the contrary, this would create an incredible shock. I wish you not to see your dream come true. You could find out it's a nightmare.
The German manufacturing industry does not export raw materials. It exports cars, machines, tools, power plants, .... For building these things it needs all kinds of materials. Much of that is imported.
> relative labor cost would change
German has already a much higher labor cost than most comparable countries. Still we have industry here and Germany is the second largest exporter in the world.
Changes in currency only have short time effets. The prices tend to new equillibirum. Your imports get cheaper and after a while it reaches a new equillibirum (balance) between the two.
Deflation(Inflation can only grant a short term benefits and that is without calculating in the distortionary effects.
