Germany's cost disadvantage is considerable: What consequences?

When comparing levels of manufacturing unit labour costs in Germany, France, Spain and Italy, we see the magnitude of Germany's production cost disadvantage : 16% against France, 17% against Italy, 28% against Spain. Germany's very significant cost disadvantage explains why: German industrial production is declining relative to that of the euro zone; Germany's market shares are weakening relative to those of the euro zone; Supporting German industry through investments (private or public) is pointless as long as production costs are so high . Germany will probably use its fiscal space to lower companies' social contributions and improve its cost competitiveness, which is what German employers are calling for.