As Europe struggles through its sovereign debt crisis, Germany is considered the strong arm of the region.But before the formation of the eurozone the country had quite the current account deficit, compared with Ireland, Italy and France.
Stephanie Kelton, Associate professor of Economics at the University of Missouri, and Avraham Baranes, a Ph.D student, have put together a brilliant presentation titled “How Germany’s labour Market Reforms Crushed The French and the PIIGS.”
What follows is a sequence of charts that show Germany go from a current account deficit to a massive surplus. It helps give an idea of why Germany wants so desperately for the euro to work.
Note: Thanks to Stephanie Kelton for giving us permission to run this presentation. You can follow Stephanie Kelton @deficitowl and visit her blog New Economic Perspectives. Also thanks to Edward Harrison for pointing out the presentation on Twitter.