Samstag, 7. Januar 2012
Our success - the PIIGS´s Problem
From Ralf-Dieter Brunowsky
Germany is the best working economy in the middle of the financial and banking crisis. Unemployment hits the lowest level since 20 years, car industry is extremely successful, exports to asia - especially china reaches amazing numbers. AUDI for example exported 313 000 cars last year alone - 37 percent more than last year. Volkswagen, it´s mother company, sold first time ever more than 8 million cars worldwide.
So how come?
I can see five reasons:
1.) Chancellor Angela Merkel provides a stable well anchored policy. She is reliable, her word counts internationally. Her Treasure Secretary (Finance Minister) Wolfgang Schaueble does a good job. Although its Coalition Partner FDP is in permanent trouble the Government is stable and Merkel is a modest but extremely efficient leader.
2.) Germany´s deregulation of labour market is a result of former chancellor Gerhard Schroeders "Agenda 2010". It was the key factor to revitalize Germany´s productivity.
3.) Having a lower inflation rate than the other Euro-Countries Germanys competitiveness is permanently increasing compared to the other countries.
4.) Germany has the best conditions in the bond market ever. It can borrow money so cheap as never and refinance former bonds with higher interest rates.
5.) Decreasing unemployment means increasing tax income for the government - plus much more payments to the the social security institutions. 2011 alone created 700 000 new jobs which pay additional into social security-funds.
So why worrying?
Because Germany´s succees will be its future problem: The politicians have neclected the main cause of the debt crisis: Germanys surpluses against most members of the Euro Zone.
The economies of the PIIGS (Portugal, Ireland, Italy, Spain) cannot and will not recover through austerity programs. They need urgently more growth for debt reduction.
Therefore the only way seems to me (see also Heiner Flassbeck Unctad) - steered by the ECB - Lower inflation rates for PIIGS and higher inflation rates for Germany. Only this would help to reduce the surpluses of Germany against PIIGS, because PIIGS are right now forced to finance Germanys surpluses (and vice versa their deficits). Over the last years this cumulated to about 400 Billion Euros debt from PIIGS against Germanys Bundesbank.