Ciocca, P. (2018), “Germany and its Low Growth”, Annals of the Fondazione Luigi Einaudi, 52(2): 221-244.
In Germany during the last 20 years the growth of domestic demand did not exceed 1% per annum, limiting the progress of GDP. It was a policy choice. The budgetary deficit was cut and transformed into a surplus. Since 2013 net public investment have been negative. National saving by far exceeded aggregate investment. Germany transferred to other countries a vast amount of real resources through an increasing surplus in the balance on current account. A huge creditor position with abroad was accumulated, at the cost of heavy lossess on portfolio investments. Being economically sub-optimal, this choice raises the question of its rationale. Evidently, Germany pursues non-economic goals. De facto, Germany could excercise political influence on debtor countries, including european partners. Such suspicion could jeopardize the unification of Europe.