In spite of its large trade and budget surpluses, Germany refuses to help reverse Europe's slowing economic growth, writes Dr. Michael Ivanovitch.
An acceleration of German economic growth would immediately trigger an increase in German purchases of goods and services from its European trade partners, most of which are members of the continent's free trade area.came in at 563 billion euro.The U.S., in particular, would also have a chance to increase its puny. But there would be more U.S.
There are two questions now: how important would be the impact of Germany's faster growth on its import demand?and will Germany accept to stimulate its economy? Based on the data of the last three years, the German import demand is very responsive with respect to GDP growth: A 1% increase in economic growth triggers a 2% increase in import demand.But hold the champagne, or the German "Sekt," because Germans have always steadfastly refused to change their export-driven growth model — less charitably defined as a "beggar-thy-neighbor" policy that should have no quarters in a grand project of the European economic and political union.
Yes, Germany — by far Europe's largest economy — has settled to count on exports to lift itself from a deflationary quarterly growth rate of
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