For months now, soaring government debt has shaped public debate over economic policy in the eurozone. One often overlooked aspect is that the deficits of some countries are not only attributable to crisis-related revenue shortfalls and higher spending or poor budget policy. They are partly also due to reduced growth prospects resulting from a country’s lack of competitiveness. The differences in competitiveness are increasingly becoming a problem for EMU, especially since the gaps between the member states have grown over the past few years... [more]

The German economy emerged from its deepest post-war recession in the middle of 2009. We are optimistic that during 2010 the recovery will continue and that the upturn which is currently still being largely driven by monetary and fiscal policy will become increasingly self-sustaining. This is indicated by the expansionary monetary and fiscal policies, the stabilisation of the financial markets, the synchronised global economic upturn, low inflation and the improved sentiment among both companies and households. This year we expect real GDP to grow more than 2%. [more]