Germans play the economics game right

German Chancellor Angela Merkel has been  pushing for bondholders to take some of the hit the next time a bank sheepishly puts its hand up and admits it's got no money. Sounds fair enough to me. Why should it be the poor old taxpayer who has to cough up every time a bailout is needed?



The Germans have got economic policy pretty well sussed. The Euro isn't a problem for them (unlike for Ireland) as it's basically the Deutschmark II. The interest rates suit them and this helps them with their exports. Exports account for more than one third of their national output, I believe. But more pertinently (for us) they actually have more of a savings culture over there, and don't regards mortgages as a vehicle for borrowing money to buy stuff you can't afford - rather it's for getting a place to live in. In fact renting is more of a way of life in Germany than in the UK. They don't make quite such a fuss as we do about 'getting on the property ladder'.

Their national economic policy is something we could learn from. They have a diversified economy, not one disproportionately reliant on the financial sector (although Frankfurt is doing pretty well). Many of their smaller industries and businesses are family-owned and run, so they pass down generations and don't rely so heavily on loans from banks. They support and nurture their manufacturers, and have an excellent apprentice system that we could do well to emulate, rather than trying to churn out graduates with degrees in vocational subjects unsuited to the market place. British industrial relations may have improved since the dark days of the 1970s but a lot of that has been due to the reforms Mrs Thatcher forced through; in Germany there is a consensus between unions and industry that has existed since the war.

It's not just about the usual image of Germanic efficiency; it's also about taking a long-term view of things, staying out of debt and investing for the future. Not so difficult really. I always remember that around the time of Euro96, when Germany knocked England out on penalties, the German team was sponsored by Mercedes-Benz; whereas the England team was sponsored by Green Flag - a breakdown company.