Llamalandia wrote:Arkolon wrote:The German economy being "pretty awesome" is a total byproduct of the European Union's structure. Namely, the euro is cheaper than the Deutschmark and so German exporters profit greatly from the currency union. Furthermore, the Eurozone allowed easy access to cheap credit for the European periphery, who indebted themselves to take in German capital and to buy more German products. Being in a currency union like the euro also means export-led growth is the only viable way to induce sustainable (ie not cyclical) growth, so in some sense Germans profit from the imbalance in the European economy. Paraphrasing the words of a FT columnist: "huge surpluses are just as bad as huge deficits", but these surpluses keep Germany strong, and the rest of the Eurozone weak. German mentality compels them to think that internal devaluation would do them well, and used the crisis (an Anglo-Saxon creation, in their eyes) to reject Anglo-Saxon economics, notably Keynesianism, which would spur demand and would avoid feeding this self-reinforcing crisis of austerity.
When the Eurocrisis hit the German labour market was malleable enough to absorb most of it, and its exports were more reliant on purchases outside of the European Union - which explains the change in German foreign policy to turn a blind eye to unethical Chinese (or other authoritarian) practices since these people are financing the resilience of the German economy.
Well being Austrian school myself, it sounds to me like german rejection of Keynes is good and it clearly seems to be working well for them. Plus a lot of Eurozone weakness is a result of their own policies which discourage free enterprise and promote socialism.
Socialism... Socialism... Socialism... I know what that means... I just can't see it...
