According to the Daily Telegraph “…For every exporter, there has to be an importer, and since the euro was created, the default importer of choice has increasingly been the European periphery. To fund these imports, the periphery has been borrowing on subsidised terms from the Germans, which in turn has created the problem of massive external indebtedness which lies at the heart of today’s crisis.
For all countries to be in current account surplus with everyone else isn’t mathematically possible. Not everyone in the eurozone can play this game. What’s more, for the eurozone periphery to export to Germany on the scale necessary to support renewed growth is going to require not just massive gains in competitiveness by the periphery, but radical change in Germany, too.
Germany would need to transform itself from a surplus to a deficit nation. Germans would need to stop saving and start spending – or, in other words, become less German. That’s not going to happen in our lifetimes. And yet Mrs Merkel thinks that if everyone behaves like Germany, things will get better. No, they won’t; in fact, the reverse will occur. Europe is condemning itself to a vicious downward spiral in demand....
Don't stop now. Find out more at http://www.telegraph.co.uk/finance/financetopics/davos/9041788/Davos-2012-Can-the-Germans-stop-being-German.html
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