The Economist Germany’s economy goes from bad to worse
German success in the 2010s reflected the country’s competitive advantage against the rest of Europe.
At the start of the century, Germany was struggling with reunification. Its price level was higher than others in the common-currency area.
Then, in the early 2000s the Hartz reforms, which included labour-market liberalisation, put a lid on costs by weakening labour’s bargaining power.
At the same time, debt-fuelled growth in southern Europe drove the price level higher in the euro area as a whole.
By 2019 the price-level gap between Germany and the rest of the euro area had narrowed. The impact of the energy squeeze, with Germany especially reliant on Russian gas, pushed the country’s price level higher. For the first time in more than two decades, Germany does not have a cost advantage over its euro-zone peers.
More government spending could provide a boost, but ministers are constrained by self-imposed fiscal rules.
Annual net public investment has fallen from 1% of GDP in the early 1990s to zero.
Although criticism of the “debt brake”, which limits the federal structural deficit to 0.35% of GDP a year, has become more common, few observers expect any change before next year’s federal election.
The Economist 15 October 2024
Tyskland lyckades genomföra vad ekonomerna kallar en interndevalvering.
Hur kunde då Tyskland lyckas med det som i dag framstår som omöjligt för länderna i Sydeuropa?
https://englundmacro.blogspot.com/2011/12/wolodarski-och-tysklandss-framgang-med.html
The Hartz IV reforms – so widely praised as the foundation of German competitiveness, and now being foisted on southern Europe – did not raise productivity
Ambrose Evans-Pritchard 8 Oct 2014
http://www.nejtillemu.com/tyskdebatt.htm#1112ambroselysande
The legacy of Hartz IV is a lumpen-proletariat of 7.4m people on “mini-jobs”, part-time work that is tax-free up to €450.
This flatters the jobless rate, but Germany has become a split society, more unequal than at any time in its modern history.
A fifth of German children are raised in poverty.
http://www.nejtillemu.com/tyskdebatt2016.htm#Hartz
Tillbaka till Wall Street och Stockholm 19-20 oktober 2024
https://englundmacro.blogspot.com/2024/10/wall-street-och-stockholm-19-20-oktober.html
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