Why Germany is not a model for the eurozone

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Series Details October 2010
Publication Date October 2010
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Many Europeans believe that confidence in the eurozone is best restored by turning the region into a larger version of present-day Germany. However, Germany is not the world-beating economy of current myth. Its vast trade and current-account surpluses are not evidence of ‘competitiveness’, but of structural weaknesses that depress consumption and investment at home. Germany is not exempt from the need to reform. An unreformed Germany would be a poor model for the eurozone to follow. Internally, it risks producing a region suffering from chronically weak demand, debilitating cycles of competitive wage cuts and prolonged slumps in the indebted periphery. Externally, it could weaken the world economy and strain the international trading system.

Source Link http://www.cer.org.uk/publications/archive/essay/2010/why-germany-not-model-eurozone
Related Link(s)
ESO: Background information: Is Germany really rebalancing? http://www.europeansources.info/record/is-germany-really-rebalancing/
ESO: Background information: Why Germany cannot be a model for the eurozone http://www.europeansources.info/record/why-germany-cannot-be-a-model-for-the-eurozone/

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