Over at the New York Times, Jack Ewing has a look at the German economy’s real weakness — overregulation.”On one side, [Germany has] this very dynamic, innovative, competitive and refreshingly unsubsidized export sector,” Andreas Wörgötter, a senior economist at the organisation for Economic Cooperation and Development tells him. “On the other side, there is a much less glamorous services sector which depends on barriers to entry, subsidies and not developing and reaching out for new activities.”
Ewing finds that as much as Germany’s amazing trade surplus is a result of the strength of its manufacturing sector, it’s also a result of a “chronically anemic spending by consumers and businesses on imports” — and it’s a problem that affects everyone:
If Germany built up its services sector, it might buy more products from hard-pressed trading partners like Greece or Spain, whose debt problems are closely tied to their longstanding trade deficits. Everybody would win, the argument goes.
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