8 Responses to “Euro Benefited Germany More than Others in Zone”


  1. But going forward it will benefit LESS. That’s the point, isn’t it? The past is the past.

    Think of the huge benefit to Germany if they exit the euro, and reinstate the Mark. Germans are thinking it.

    A currency is a culture.


  2. You should have read the post ;-)

  3. Roger McKinney Says:

    Nice analysis. Thanks!


  4. Andreas, well, yes. :) Thanks. lol.


  5. Interestingly, my colleague José Abad suggests that Germany benefited the most.

    He argues that German net national disposable incomes in ppp increased more than those in other economies due to return from investment abroad.

    Of course this is interesting and neglected in my post.

    I mainly focused on who attracts investment, gdp growth and unemployment.

    But then the question is by which standard we decide who benefited the most? And is this caused by the euro?


  6. Everyone uses the euro, so, if Germany has done better than other countries, it suggests some other factor(s). If German gained more competitiveness than other countries, it did something else.

    Andreas has a convincing story.

  7. Pietro M. Says:

    Really interesting post.

    I wonder what has been the role of Schroeder’s Agenda 2000 in regaining competitiveness. From what I read, it seems that Schroeder put his political career at stake making clever policies, reducing wage growth and increasing the strength of the economy after the post-unification binges. It looks like an extremely rare case of politician who preferred responsibility to votes, two goals that in democracy are usually incompatible. However, I have no access to German newspapers because of the transaction costs due to language, and I don’t know if this narrative is ok.

    Is this surprising and exceptional (for politics) long-sightedness changed with Merkel? My view is that she really likes getting votes, as when she promised to get rid of nuclear power after Fukushima, but the private and public financial lobbies must be really worried about the crisis to force her to lose votes by not opposing bailouts. Probably, real effects on the German economy in case of a PIGS bloodshed would be great, however.

    PS It is noticeable that economic policies have shifted from policy of giving tax-payers’ money to banks to giving it to banks’ creditors. The number of tools to live at other people’s expenses is ever growing.


  8. Well, I give Schröder credit for keeping Germany out of the Iraq war (I had to mention this) and for making the labor market more flexible (with the help of Merkel’s CDU).

    But his party never liked this policy.


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