Sick man of Europe risks relapse

THROUGHOUT the 1990s and much of the 2000s, Germany was known as the sick man of Europe. Weighed down by the costs of reunification, suffocated by high taxes and labour regulations, and battered by the competitive pressures of globalisation – if you could name an economic torture, Germany suffered from it. Maybe that’s why the new crisis feels less urgent than it is.

Germany’s economy today is in a state of health that usually seems unattainable for old Europe. Real growth was 2.5% last year. Exports power a trade surplus of 8% of gross domestic product. Unemployment is at a post-reunification low of 3.7%.