Ten years ago, Germany’s economy was mired in recession while the rest of Europe was recovering. Its unemployment rate was higher than the euro area average; it was violating European rules on excessive deficits and its financial system was in crisis. Today, however, Germany is held up as a model for other countries to follow.
CEPS Director Daniel Gros concludes that only some elements of the German ‘model’ are useful for the embattled peripheral countries of the euro area today. Germany’s reluctance to reform its services sector and its meagre productivity record are the aspects that should not be copied.