> Germany’s strong exports are being bought by all European countries which some argue is the cause of the rest of Europe’s unemployment and fiscal problems. Us in the USA like to think it is because of bloated entitlement programs, which very well could be the major cause or a contributing factor, but it is at least plausible that the absolute real cause is Germany’s strong industrial position combined with their ability to export to the rest of Europe.
I seem to remember reading an article around 2007 or so (anyway, before the shit started hitting the fan) about how the German employees' real wages had been practically stagnant in the previous decade, and about how the employers' association had basically told the unions that "it's either you keep your wage demands in check or the jobs will move to Eastern Europe". It seems to have had worked, if only for the fact that the German consumers weren't as easy going with their money.
Quite so. Germany has been running an immensely profitable manufacturing-and-technology economy on the basis that demand for their goods comes from exporting to other countries, who buy on the credit they receive from German banks. Therein lies the rub: if Germany couldn't export, its domestic consumption would be totally unable to hold up its economy. They'd go into an overproduction crisis like the US and Japan.
I seem to remember reading an article around 2007 or so (anyway, before the shit started hitting the fan) about how the German employees' real wages had been practically stagnant in the previous decade, and about how the employers' association had basically told the unions that "it's either you keep your wage demands in check or the jobs will move to Eastern Europe". It seems to have had worked, if only for the fact that the German consumers weren't as easy going with their money.