How Germany is able to run the world’s second largest export economy
I've said it before in another comment [1]:<p>>There's nothing I enjoy more than the plight of the German Saver, who's obsession with "fiscal responsibility" has led to shitty austerity politics all across the EU (to be fair some other northern European countries like Netherlands also share the same view) and depressed growth for the poorer southern European countries.
Germany has benefited most of all from the unfinished project of the EU. Without becoming a federal union like the US, but having a common currency, Germany's exports have been artificially cheaper and thus more competitive for over 20 years.<p>>This is the natural outcome from the obsession with running fiscal surpluses. Now Germany is on the brink of recession and they're finally starting to make some noises about fiscal spending, but the politics will likely limit it to modest deficits than anything transformational. Enjoy the negative rates.<p>The common currency (Eurozone) is deeply flawed and it only allows a rich country like Germany to win at the expense of poorer countries like Greece or Portugal. I find it insane that EU politics have never really dealt with this. I find it absolutely insane that after the 2011 sovereign debt crisis, Germany somehow managed to escape with keeping the Eurozone intact and having the poor countries impose austerity instead.<p>There absolutely needs to be a political revolution in the Eurozone countries. Either complete the EU project by becoming a United States of Europe, and receive all the equalizing payments of healthcare, social security, and common military spending at the federal level, or get rid of the common currency. It's just hurting the poorest people in the Eurozone to keep the current arrangement.<p>You might be under the impression "well Germany might be parasitic vis a vis other Eurozone countries, but at least it's good for working Germans", but you'd be wrong.<p>The US today has a tight labor market which will eventually drive wages up if it persists long enough. Germany on the other hand has similar employment statistics but they did it with the Hartz reforms [2]. The unemployment stats look great because you can get a shitty low wage job [3].<p>Germany has kept the wages of workers depressed in order to be an export powerhouse. It's parasitic on other Eurozone neighbors but also on German workers. The people who have benefited the most from this arrangement are the German capital class. The shareholders and managerial class of German industry, whether it's giants like Volkswagen or even the small Mittelstand companies. German workers should have gotten wealthier over time which would have made Germany similar to the US in being driven by domestic consumption. That in turn would have made other EU members better off because those wealthier Germans would have been able to consume more of their goods and services. It's truly baffling how even German workers have put up with this. They're losing to the benefit of German capital.<p>[1] <a href="https://news.ycombinator.com/item?id=20793982" rel="nofollow">https://news.ycombinator.com/item?id=20793982</a><p>[2] <a href="https://theconversation.com/questioning-the-claim-of-germanys-employment-miracle-106895" rel="nofollow">https://theconversation.com/questioning-the-claim-of-germany...</a><p>[3] <a href="https://en.wikipedia.org/wiki/Marginal_employment#Germany" rel="nofollow">https://en.wikipedia.org/wiki/Marginal_employment#Germany</a>