Should We Be More Like Germany?

Germany is Europe’s biggest economy and has many world-leading firms that export to countries around the globe. Its unemployment rate at 5.4% is half that of its European neighbours and, most importantly, its youth unemployment rate of 8% is a third of the European average and at its lowest level in 20 years.

This is a remarkable performance at a time when many countries are experiencing their worst recession in living memory and high levels of unemployment persist across Europe.

The fact that so many countries are struggling with the effects of the recession makes Germany’s success all the more remarkable and puts it in a clear position of strength.

Its economic influence is certain but its role as leader less so, not least for historic reasons, as it appears reluctant to do more than suggest that others adopt a similar approach to managing their economies.

Germany’s economic model is focussed on stringent national housekeeping, maintaining competitiveness and export-led growth of its goods and services to markets around the world.

It kept unemployment low during the worst of recessions by topping up employees earnings when they had to work shorter hours and paying them to take courses during quiet periods.

Germany, and its young people, benefit from an extensive vocational training system that enables school-leavers to go to university or combine further education and workplace experience in a wide range of industries.

Its focus on competitiveness and mix of world-leading small and large company exports to growing economies keeps it strong and provides a credible strategy for the future.

The German approach is criticised as it doesn’t address the debt burden, low wage or high unemployment issues of its neighbours and doesn’t help growth in the Euro area which, it is argued, would benefit its own economy.

Its weaknesses include the growing numbers of low paid jobs in the economy, an increasing gap between well-paid permanent posts and low paid temporary contracts and a growing shortage of skilled workers due to its low birth rate.

Germany, however, is likely to continue its success by focussing on good housekeeping, competitiveness and growing exports to economies outside Europe to reduce its economic reliance on the euro area.

SO, given the strength of the Germany economy in the most difficult of times should we be more like Germany and if not what should we do?

What about you?

Should we be more like Germany?

Look forward to hearing your feedback in the comments below.