Workshop of Europe ... a factory in Germany. Photograph: Sean Gallup/Getty Images
Greece's economic crisis is a gift from heaven for the German government. The country is the ideal conservative dystopia of an irresponsible government financing a supposedly overblown welfare state by ever increasing debt, where workers enter retirement in their mid-50s, the dead continue receiving pension payments and public employees earn bonuses for arriving punctually at work. Never mind that, exceptions aside, public expenditure as a proportion of GDP is lower in Greece than Germany and the average Greek works longer hours and retires only half a year earlier than the average German. That did not stop those stories from being widely reported by the German media. It strengthened the moral tale of the hard-working Germans being abused by lazy southerners. The tale is convenient because it diverts attention from Germany's responsibility for the eurozone's current economic woes.
The tale goes like this: while Greeks wasted their time on the beach drinking Ouzo, Germans implemented painful economic reforms. Indeed, in the 2000s Germany deregulated its labour markets, reduced real wages to increase competitiveness, shrunk the public sector, cut pension entitlements and implemented a debt break into the constitution. After almost a decade of dismal economic growth and heavy belt-tightening, Germany has negotiated the 2008 global economic crisis successfullyalmost without employment losses, has since grown strongly and now registers the lowest unemployment rate since 1991. If southerners would have just followed the German model, the whole crisis could have been avoided... read more.
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