For those who smugly accept notions of “old Europe” the Financial Times’ analysis of Germany’s export success will probably be a shock:
In spite of Germany’s unexceptional macroeconomic data, no other industrial nation has so successfully harnessed the opportunities offered by an interconnected global economy.
This mid-sized country of 80m, often painted as angst-ridden, risk-averse and allergic to change, has been the world’s largest exporter of goods every year since it overtook the US in 2003.
In 2004, the most recent year for which the Organisation for Economic Co-operation and Development provides comparable data, German companies exported just under $1,000bn (£530bn, €780bn) worth of products, nearly as much as the UK, France and the Netherlands combined. Its trade surplus was six times that of China.
To Germany’s cost, however, it hasn’t yet found a way to translate that success into growth and jobs domestically. Its export-oriented companies are thriving, but too many of its people are moribund.
You are spot on again…
I hope that the German team will do will in the world cup this summer, it may provide “du bist deutschland” boost we both commented on a couple of months ago. At least amongst my German friends, I sense a loosening of the belt, even if it just to buy a new flat-screen HDTV to watch the soccer on!
I’m less worried about export-led economies that don’t want to spend, than I am about economies spending more than they can afford to.
I think your distinction on what makes economies truly healthy is right. The interesting question for me is whether US business can transform into the same type of intelligent, export-led organizations as is so common in Germany.
I think the transformation will be essential for the US to have a prosperous economy later this century. Unfortunately, it is highly questionable whether the US workforce has the skills and flexibility that can be found in Germany and other northern European countries.