Euro

Posted 4:48 PM by Dil
Home-grown hazards
SIR – The euro and the European Union are not important contributors to Germany's economic difficulties: unlike its rigid labour market, profligate social-security system, legacy of a botched unification and relatively unsophisticated financial sector (Charlemagne, Jun 7th). Germany's contribution to the EU is dwarfed by the sums wasted on subsidies and tax breaks promoting unproductive ends. There is no need for Germany to breach the deficit-spending limit to design a growth-friendly fiscal system.

If Germany had entered monetary union with a dangerously high exchange rate, the first sector to suffer would have been exports. Instead, its exports are about the only thing to have held up. Monetary union is not the cause of Germany's ills, but by exacerbating the symptoms it is Germany's best protection against its politicians ignoring the problem still longer and sending the country the way of Britain in the 1960s and 1970s.

Hans Geberbauer
London