What can be done to make Germany invest more in the other euro-zone countries?
Since the euro-zone crisis (2010-2013) Germany has not lent its excess savings to the other euro-zone countries, but to the rest of the world. This has prevented a significant increase in investment in the euro-zone countries other than Germany. We therefore seek to determine what can be done to make Germany invest its excess savings in the other euro-zone countries. Th ese following conditions would have to be met : The return on capital would have to be high in these countries; Banks' balance sheets would have to be cleaned for low-quality assets, so that German interbank lending to other countries could start again; Governments’ fiscal solvency would have to be good, to restore lending by German banks and investors to other euro-zone governments, and also to banks (given the correlation between sovereign risk and banking risk).