Report
Patrick Artus

What differentiates Germany's economic philosophy from that of the other euro-zone countries: A rejection of quick fixes

In the dominant economic philosophy in Germany, quick fixes are rejected: The exchange rate should not be devalued to restore competitiveness (which France, Spain and Italy did regularly until the creation of the euro); Public debt should not be used to stimulate demand (which is France’s and Italy’s current choice); It cannot be accepted that interest rates are lower than the growth rate to improve borrowers’ situation (which is the choice that the ECB has made currently). This difference between Germany's economic philosophy and that of the other euro - zone countries raises several important questions : Who is right? This is probably a question of preference for the present and acceptance of wage adjustments and the " effort strategy"; Can Germany and the other euro-zone countries be in the same currency area?
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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