The problem with Germany is in some ways the problem with China: too little domestic consumption, too much reliance on beggar thy neighbor policies that promote exports but keep the regional and global economy from really growing.
It’s difficult to see how the PIIGS of Europe get anywhere so long as Germany refuses to promote domestic demand.
And the rest of Euroland’s not very pleased by Germany’s unwillingness to spend a bit more.
For the moment, the Germans are hoping that enough gullible bond buyers will save them from having to bail out the Greeks, while enjoying the export benefits of a euro in decline.
Not a sustainable policy over time, when Euroland growth is a pedestrian 1.5%, but good enough for the inflation hawks to feel complacent in Frankfurt.
Gorilla says: “Their burghers order up a mercantalist burger, and hold the feta!”
