Germany's choice and the euro zone’s functioning

A number of Germany's strategic choices or strategic preferences have a decisive impact on the euro zone’s functioning. Germany wants economic policy to be steered by rules; it has therefore imposed budgetary rules on the euro-zone countries, which now has definitely led to lower fiscal deficits than those that would appear spontaneously. The question of new budgetary rules that are more favourable to public investment therefore arises. But it is worth noting that Germany has not been able to impose its views in terms of monetary policy. Germany has a very strong preference for savings (a weak preference for the present); this has currently led to massive savings (by the government and the private sector). The serious point is that these savings are being lent to the rest of the world outside the euro zone, and not to the other euro-zone countries. This weakens euro-zone investment and growth, in the short and long term. When Germany has been in trouble (after the turn of the century), in particular due to a cost competitiveness problem, it has conducted non-cooperative policies (wage restraint, corporate tax cuts) that have restored its situation at the expense of the other euro-zone countries. Germany is still in trouble now, and there is reason to fear the use of non-cooperative policies again (instead of cooperative policies, such as the creation of a European Investment Fund). Germany is a proponent of ordoliberalism (which appeared in the 1930s at the university of Fribourg), according to which the government’s role is to set rules (competition, protection of employees), but not to intervene in companies’ choices. Therefore, no pro-active fiscal policy (through public investments), no industrial policy, no income policy, no trade policy (and obviously independent central bank, price stability, budget balance, free trade). This ordoliberal view of economic policy in Germany enters into conflict with the intentions of other euro-zone countries: active public investment policy, strategic industrial policy, "intelligent" protectionism. Germany had to give in on monetary policy: could it also give in on fiscal policy, public investment policy, industrial policy, the use of savings in Europe, and a rejection of non-cooperative policies?