> 1) Germany creates wealth better than other countries
No, his basic argument is that Germany creates wealth better than others in large part because EMU has allowed it to benefit from unnaturally low exchange rates. If it still had the deutschmark, it would be trading at a much higher level, reducing its competitiveness.
I think he's pretty much spot on with his analysis, but who knows what the solution is.
Wait, with the strong Deutsche Mark West Germany had trade surpluses all the time.
German's core competitiveness is not based on price. Price has an influence, but countries buying a German (Siemens) gas turbine for a power station don't do it because it is especially price competitive. They do it because of its technical qualities mostly. Same for the High Voltage DC lines that Siemens sells to China. Same for the high-speed trains that Siemens sells to China, Russia, Spain, ...
That is indeed a valid counter-argument. I guess you'd have to quantify the proportion of its exports that are price-insensitive to be sure. I'd be interested to know if anyone has a rough idea?
No, his basic argument is that Germany creates wealth better than others in large part because EMU has allowed it to benefit from unnaturally low exchange rates. If it still had the deutschmark, it would be trading at a much higher level, reducing its competitiveness.
I think he's pretty much spot on with his analysis, but who knows what the solution is.