Charlemagne, (2013), “Fawlty Europe”, The Economist, 01 Νοέμβριος.
“DON’T mention the war” is the catchphrase from one of the best-loved scenes in “Fawlty Towers”, a British television comedy series. John Cleese plays the eccentric owner of a small-town hotel who causes uproar by incessantly and rudely talking about the war to his German guests. These days in Brussels the equivalent catchphrase about Germans has been “Don’t mention the surplus”. It would be funny were it not for the hardship that Germany’s obsession with competitiveness is causing.
For Germany booming exports are the measure of economic virility. To an extent, it has a point. The woes of the euro zone were, in large part, caused by southern Europe’s loss of export competitiveness. Yet a large and persistent surplus in the trade balance (or the current-account balance, which includes foreign income) can be the symptom of a distorted economy. If big surpluses were a guarantee of vitality, then Japan would never have suffered its lost decades.
Within the euro zone troubled economies cannot devalue to regain competitiveness or loosen monetary policy to suit their needs. Instead they must adjust by painfully reducing wages and prices relative to those of others. Such “internal devaluation” can be done gradually, by holding down wages, as Germany did before the crisis; these days, though, it is accompanied by wage cuts and deep recessions. By contrast surplus countries, including Germany, the Netherlands and Austria, enjoy an artificially low exchange rate. Were Germany still using the Deutschmark, its currency would surely appreciate.
Για όλο το άρθρο, πατήστε εδώ.
Σχετικές Αναρτήσεις
- Gros, D., (2013), “The Myth of German Euroskepticism”, Project Syndicate, 09 Οκτώβριος.
- Marzinotto, B., (2013), “The euro complements Northern European economies more effectively than those in Southern Europe”, Europeans Politics and Policy Blog, 02 Οκτώβριος.
- Delors, J., Vitorino, A. and Bertoncini, Y., (2013), “Germany and the EU: a new cycle?”, EurActiv, 30 Σεπτέμβριος.