Sunday, April 4, 2010

EU becomes Mitteleuropa?

Germany is coming under fire now from all sides for -- I kid you not -- being "too competitive." At first, I thought that the claims that Germany needed to raise its wages so that countries like Spain and Greece could compete were just left-wing radicalism, but at least one French official recently made the same claim, and the idea resonated throughout the German press, with a mixed response. Some Germans support the idea, while others think that Germany's friends in the EU should buckle up and get back to work.

Here's an interesting claim from a website I do not know otherwise:

European states are borrowing money (mostly from Germany) in order to purchase imported goods (mostly from Germany) because their own workers cannot compete on price (mostly because of Germany). 

The website charges -- somewhat unfairly, I would argue -- that Germany is now (finally) conquering Europe, this time economically rather than militarily. (Still haven't gotten over history, eh? ) It seems to me that Germany often simply focuses on products the world will obviously need and tries to build things that work. Other countries that more or less do the same (the Netherlands, Austria, etc.) are also not doing all that poorly right now, whereas countries like Spain and the UK simply get too much of their GDP from superfluous things like real estate and tourism (in the case of Spain) or pop culture and the banking sector (in the case of the UK). When the money runs out in places like the Netherlands and Germany, all of those sectors suffer because they are based on "play money" -- money left over after the necessities have been bought.

The investments of that Germany has made in renewables certainly do not hurt.

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