Germany: Responsible for Europe’s crisis?

Germany’s economic policies have strengthened its domestic economy but weakened Europe’s less developed economies. Low prices, resulting from low wage increases, have made German products more competitive in the European market. Meanwhile, domestic consumption has shown muted growth, allowing imports to remain low. The result is a high trade surplus and one of the largest GDPs in Europe. But Germany’s economic values of working hard and saving money belies a fundamental imbalance in an economy that relies on cooperation with fellow members of the European Union. If other economies suffer, demand for German products will likely decrease, hurting the German economy as a result. Hence, Germany must stimulate domestic consumption of foreign products if it is to continue to benefit from demand for its own exports. – YaleGlobal