Will Germany take advantage of its role as exporter to become the locomotive of the euro zone?

- "We shall compare Germany, France, Italy and Spain. The weight of exports, and especially exports to high-growth countries, is far higher in Germany than in the other three countries, a fact that should be favourable to Germany in the future."
- "However, will Germany become the locomotive of the euro zone given that the other countries are weakened by the fact that indebtedness is not increasing?"
- "To answer this question, we must take into account:
outsourcing by German industry: exports can have a very large content of imports from emerging countries and not generate much value added in Germany, nor a large amount of additional exports from euro-zone countries to Germany;
the ongoing wage squeeze policy, hence the sluggish demand from German households and therefore the sluggish activity in Germany."
- "All in all, given these features, one should not overestimate Germany's potential role as locomotive for the euro zone."
Natixis Flash Economics 336 20100630

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