The employment rate: The main difference between Germany on the one hand and France, Spain and Italy on the other

Germany now has a much higher employment rate than France, Spain and Italy. This can be explained by the higher level in Germany of labour force and youth skills, faster corporate modernisation and the fact that a large industry has been maintained . Germany’s higher employment rate leads to a greater supply of goods and services than in France, Spain and Italy, which explains most of the differences between Germany and the three other countries: Fiscal surplus in Germany and deficits in the ot her countries; External surplus in Germany and the need to contract domestic demand to eliminate external deficits in the other countries; Rising living standards in Germany relative to the three other countries. Instead of criticising Germany’s surpluses, France, Spain and Italy should conduct policies to raise their employment rates as fast as possible.