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The German way out

The economic wheel in Germany seems to have turned full circle. Berlin’s assertion that it is heading towards ‘full employment’ is quite encouraging.

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This positive note from one of the major growth engines of Europe has come at a time when many other economies of the region are struggling with high debts. It is no small feat, and can set the ball rolling in the continent, which is mired in bailout packages and critical government monitoring of private entrepreneurship. The fact that Germans are spending and the domestic consumption is strong enough is a sign for growth activity elsewhere. But Germany can’t afford to sit back and celebrate its smooth sailing, as the nature of interdependence in the Eurozone demands an assertive role on its part to fend off reactionary tendencies and possible default by any of the 27 members in the 
jittery club.

Amidst the gloom of pestering recession, it is a welcome development that German economy has grown at the rate of 0.7 per cent compared with the Eurozone average of 0.4 per cent. Similarly, the unemployment figures have come down to fewer than three million, down from five million. The success would not have been possible had the centre-right of Chancellor Angela Merkel not cohabited with the liberal agenda of the pro-business FDP. The political acumen and agenda to pull Europe’s largest economy and the world’s second largest exporter out of the woods has finally worked. Berlin’s insistence on a strictly regulated economy, coupled with regulations, is undoubtedly a role model for the world at large, which is keeping its fingers crossed while evaluating the fissures of Wall Street even to this day.

Though the sinking economies of Greece and Ireland have almost been anchored, thanks to the generous packages doled out for them, Portugal and Spain are now knocking at the door of bankruptcy. All this goes on to prove that the dilemma of supply and demand is yet to be addressed in Europe. To further compound the stability index of the euro are divergent growth prospects, and the size of governments and subsidies that are in vogue. As agreed at the G20 summit in Seoul, the need of the hour is to see to it that how individual policies come to haunt the collective productivity of the Eurozone, and there should be a mechanism to check it, accordingly. Germany’s prescription of state-centrism balances is in need of being reenacted elsewhere.