One Simple Chart That Explains Why Germans Resent Bailing Out The Rest Of Europe

This weekend, France and Germany were rebuffed in their plan for a “pact for competitiveness” which would have seen eurozone member states adopt similar labour and tax policies to Germany.

If you’re wondering why other member states aren’t interested, just look at the gaps between Germany and other member states of the key issues of the pact.

The 7-year age gap of Female retirement between Germany and Greece, Italy, and Austria is definitely the most glaring labour number, but across the board only Spain (same ages) and Ireland look close to the Germany retirement model. Consider how difficult it was for France to raise its retirement age, and you’ll understand why this is no easy issue for European leaders.

Corporate income tax rates are high in Germany compared to the rest of the eurozone, and one aim would be to make those more unified. This is likely to hit Slovakia, but will be much more harsh on Ireland, who count their low tax rates as a key source of economic growth..

And wage indexation to inflation, which doesn’t exist in Germany, was the key reason Belgium had no interest in the deal.

Don’t miss: The dominos that could fall next in Europe >


Photo: Societe Generale

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