3-24-2011 Daniel Gross on German Growth complicates ECB Monetary Policy.

3-24-2011 Daniel Gross on German Growth complicates ECB Monetary Policy.

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Unformatted text preview: Why Germanys Growth Could Hurt the Eurozone Recovery Daniel Gross, March 24, 2011 As Greece and Ireland flounder, as Portugal teeters on the edge of national bankruptcy, and as the U.K. (new word alert!) austeritizes itself back into recession, you would think that any sign of economic growth emanating from Europe would be welcome. After all, more rapid growth offers the only painless way to reduce deficits. But here's the thing. In the heart of Europe, one economy is lighting up the scoreboard, in relative terms: Germany. And ironically, that may be bad news for the struggling nations on Europe's periphery. Germany's export-oriented economy weathered the recession quite well. In 2010, Germany grew 3.6 percent. In January, 2011, the government raised its forecast for 2011 growth from 1.8 percent to 2.3 percent. So what could be wrong? Well, 90 years after its struggles with hyperinflation and the political, economic, and moral madness that ensued -- Germany still has a deep-seated, intense fear of anything that resembles a hint of a whiff...
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