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Rodriguez is poised to join Real in a big-money move after the Colombia international was pictured arriving in the Spanish capital on the weekend.
The 23-year-old, who won FIFA's Golden Boot with six goals at the World Cup in Brazil, scored 10 goals and registered 12 assists in his debut season for Monaco following his €45 million transfer from Portuguese giants Porto at the start of 2013-14.
While Germain concedes Rodriguez's departure would be a huge loss, the Frenchman is adamant Monaco - bankrolled by Russian billionaire Dmitry Rybolovlev - can replace him due to the club's resources.
"All the players have faith in the club's officials," he told L'Equipe.
"If James leaves, as he's considered as one of the best in Europe right now, it would be a huge loss.
"But Monaco can always buy new recruits. I'm sure we'll have a team as competitive as last year."
