If Germany’s economic model is the future of Europe, we should all be quite troubled. But that is where we seem to be going. The apparently successful re-election campaign of Angela Merkel, the Christian Democrat chancellor, promises “Germany’s future in good hands”. More, in other words, of the same. The policy response to the eurozone crisis is likely to remain a programme to induce member states to follow Germany’s path to competitiveness: cutting the cost of labour. Make no mistake; that has been the basis of the nation’s export success in the past dozen years; and exports have been its sole consistent source of growth in that period. But low wages are not the basis on which a rich nation should compete.
© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.