Is Germany turning a blind eye to its weaknesses as some of its economists are warning? And will the country retake the “Sick Man of Europe” title?
In a Bloomberg article the positives and negatives of Merkel’s rein are weighed up, the Gerhard Schroeder legacy is assessed and the future demographics and employment hurdles considered:
Since 2010, the country has lost its top-five spot in the World Economic Forum’s competitiveness index to Japan.
But… Unemployment is near a 20-year-low and locally made high-technology machinery and automobiles are achieving record sales across the globe
Merkel’s government claims wages rose an average 2.6 percent last year as unions brokered deals boosting pay by as much as 6.5 percent.
But… Productivity isn’t keeping pace with wage deals; Eurostat estimates a decline of 0.2 percent in 2012 and growth of 0.5 percent in 2013.
Warning bells are ringing for Merkel who heads towards her third general election in the autumn of this year.