Its economy is the most prosperous and stable
Several German cities are said to be amongst the most livable cities
Berlin today is seen as the hip center of Europe
Why is that ?
Has Germany evolved into the model paradise in Europe and the world ?
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In a closed EMU economy scenario i would agree to your assessment, but since the EMU is integrated into a globalized world you shouldn't forget that despite the German competetiveness the the EMU has a trade [b]deficit[b]. The obvious solution to this is that the less competetive EMU economies have to improve and not for the more competetive ones to decrease.
leviathan wrote: Germany could do something to boost domestic demand.
Certainly, some EU countries need to improve. Some economies of the south have disadvantages because their labor forces aren't as flexible. Changes in that department take time and won't pass without protests.
Germany could do something to boost domestic demand.
They could introduce binding minimum wage law for one.
That Germany's currency can't appreciate compared to theirs is a huge disadvantage for everyone else. German industry profits hugely. German consumers less so. This behavior may be sensible for an aging society but its no helpful to the wider situation.
In essence, while Germans should consume more, some other Europeans should consume less.
Which we already have where it is necessary...
and besides that the wage level is still numerous times higher compared to our EMU partners with a lack of competitiveness.
This simply ignores the fact that there are extreme cultural differences. Given the current future expectations (over aging society, inflation scenario, workplace insecurity, housing costs) of the German customer, who always consumed less, because of the higher saving rate as a direct result of the culturally higher investment horizon, you can be really happy that we are in a self-sustaining growth cycle.
Actually this is what is happening. The domestic demand improved greatly and it will improve more and more in the future as we are already going into a over-aged population (average is currently around 40 iirc).
Actually this is not true. The current situation is that the we suffer since 1998 from mainly too low interest rates from the ECB to counter the inflation problem. Thats why the German consumer is suffering and keeping his money tight and that's why the German industry profits. Of course you can now demand higher interest rates, but have some fun telling it the PIIGS.
Negotiator wrote:- got confused -
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