ANGELA MERKEL has a favourite mantra to offer troubled euro-zone countries: they should copy Germany. As she put it last autumn: “What we have done, everyone else can do.” Fifteen years ago, the chancellor’s analysis goes, her country was widely regarded as the sick man of Europe. Then it opted for fiscal austerity, cut labour costs and embraced structural reforms, turning it into an economic powerhouse.The gap between Germany and southern countries in the euro zone is indeed wide. Its economy is growing faster than most of theirs; youth unemployment in Germany is at a 20-year low, whereas it remains at record highs in Spain and Greece; and the German budget is in surplus, even as France, Italy and Spain struggle to hit deficit targets fixed in Brussels.When it comes to fiscal prudence, Mrs Merkel is a paragon. Indeed, this newspaper wishes she were a little less austere, and spent more to boost Europe’s demand. But on structural reform, her record is weak. The credit for Germany’s rebound should really go to the “Agenda 2010” reforms started by her predecessor, Gerhard Schröder, in 2003. Since then Mrs Merkel has had the odd flourish—she bravely...
from The Economist: Leaders http://ift.tt/1jVeysH
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