Germany runs too fast

Germany remains Europe’s “economic engine”. Thus “we should all become a little more German” at least in terms of productivity and budgetary rigour. Having said this, Germany is under close examination by the EU Commission for its excessive account surplus and a manufacturing and commercial system that are too strong and export-geared compared to the rest of the EU.That also happens in the Europe of the crisis and rampant unemployment. Yet the decisions taken by the EU Executive have their own logic that can be found in a set of lengthy documents presented past November 13. Among these documents – that give the official kick-off to the fourth European semester for the coordination of economic and budgetary policies – figure the “Annual Growth Survey” (establishing the economic and social priorities of the Member States for the coming year, to be pursued through reforms and policies), the “Alert Mechanism Report” (identifying imbalances and systemic risks within the single market), the recommendations on the draft budget of eurozone countries, Reports concerning excessive deficit procedures and, not least, the draft Employment Report.  The presentation of the tiles of the complex governance strategy, set out by the 28 EU member States and coordinated by the Commission, brought to the fore at least five key points. The first tends to boost confidence: “The EU economy has reached a turning point. Joint efforts start to produce results and growth is starting to be seen”, said  the President of the Commission, José Manuel Barroso, echoed by Commissioner Olli Rehn: “The economic forecasts”, presented last week, “show that we are on track”. For the EU Executive there is an urgent need for political stability in all States, taking the helm on reforms and fiscal adjustment, and most important, focusing on “job creation, especially for young people”. Second. Seen that EU Countries’ economies are increasingly interdependent (especially those adopting the same currency) “economic policy is clearly no longer a merely national responsibility”, said the president of the Commission, acknowledging that the actions of every Country impact another”. Therefore “we must jointly protect the interest of Europe”. “The Commission cannot -nor does it intend to – run national political economies”, Barroso underlined, “it is a question of ensuring that what is good for a given member country will have a positive impact also on the other member states”. Then he came to Germany (third point) “Germany – Barroso went on – is the European Union’s economic powerhouse, and an added value for the EU. However, there are signs of account surpluses” and in particular a strongly positive balance due to export. “None of us would dream of challenging the competitiveness of Germany. What should be established is whether this approach “of the largest EU country” restrains the recovery of others, or whether instead it can be refocused “for the development of its neighbouring countries. For example, by opening the tertiary market for services to companies of other EU Member States, or favouring domestic demand (“balancing the level of wages with productivity”), which in turn has repercussions that extend beyond German borders; investing in the economies of the EU … In short,  Berlin’s politics, the German Industry, the country’s economic system as a whole, should extend a hand to Europe. National wellbeing must not undermine the recovery of other countries. On this point, the Commission acknowledged a debate that has been ongoing on for some time in Europe.     Ma while Germany’s economy is too “strong”, insolvency procedures involve 15 EU countries – fourth point – opened by the Commission. Problems vary: France “loses competitiveness” and shows a deficit of more than 3% allowed by the eurozone, Italy “must continue with the reforms,” undermined by the risk of political instability; excessive imbalances have been detected for Spain, Hungary, Slovenia, while Croatia’s economy is ailing. Under observation are also Belgium, Bulgaria, Denmark, Malta, the Netherlands, Finland, Sweden and the UK and even Luxembourg. The fifth acknowledgement should be the point of departure, said Labour Commissioner Laszlo Andor.  “Employment must remain a priority for all EU Countries. “Without jobs families” can’t make ends meet, young people “have no future”, social unbalances increase, “poverty increases”, posing a risk to social stability. Who knows whether Angela Merkel, in drafting the program of the new government, will take this into account.