[Economics] A New Agenda 2010 - The Causes for the Euro Currency Union

Siehe auch:
[Wirtschaft] Eine neue Agenda 2010 - Die Folgen für die Währungsunion

In the previous part it was explained how the real wage level was reduced down as a result of Agenda 2010 among other things by reducing social benefits. However it can be proven that no jobs were created, but rather that existing jobs were simply distributed among several people. For Germany this resulted in a stagnating domestic economy and an increased export quota and export dependency. In addition uninterrupted foreign trade surpluses were generated. These claims can be lost in the event of insolvency, are inevitably devalued as a result of inflation and are also devalued in the event of a currency reform.

Germany's foreign trade surpluses are offset by foreign trade deficits in other euro-currency member-states. This resulted in production, jobs and in particular industrial production in the other euro-currency member-states were pushed away. In the following the consequences of the 2010 Agenda in Germany for the euro-currency member-states are presented.

We have a fantastic labour market in germany at the moment. A very well funtioning good low wage labour market. [1]

Foreign Trade Balance
Industrial Production
Unemployment Rate

Foreign Trade Balance

On the one hand it is recognizable that the foreign trade balances of the selected countries have become more and more apart since 2000. Although there were rashes in 2008 (banking crisis) and from 2020 (Corona & Russia-Ukraine War) there is no adaptation. Germany in particular protrudes with a massive excess of foreign trade. An explanation of why Germany protrudes in this way is wage restraint in Germany as a result of the Agenda 2010. Germany had a real advantage in the euro zone which other euro member states could not evade by devaluing the currency. Exchange rates between the countries were abolished with the euro currency union.

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Summering the trade balances shows that Germany has built up massive demands compared to abroad. At the same time the other countries, apart from Italy, have built massive liabilities compared to abroad. Foreign trade deficits are bad for the countries concerned because the imports crowd out the local economy. Foreign trade surpluses are bad for the countries concerned because the claims inevitably depreciate due to inflation.

[2] [3] [4] [5] [6] [7]

Industrial Production

In contrast to the other countries industrial production standardized at 2005 due to the Agenda 2010 has massively won industrial production. One explanation for this is the low-wage politk in Germany as a result of and since the 2010 Agenda. Germany became above-average dependent on export. However this happened at the expense of the other countries in the euro zone. Germany has had an increase in industrial production of up to 35% since 2005 (2017). The other countries of the euro zone have lost industrial product in the same period up to 24% (Portugal 2012).

[8] [9] [10] [11] [12] [13]

Unemployment Rate

In direct comparison it can be seen that the Agenda 2010 from 2005 essentially reduced Germanys unemployment rate. But the unemployment rate of the other countries has initially increased. Spain stands out because the unemployment rate has only increased and no improvement is recognizable. France and Italy have had a comparatively low improvement in the unemployment rate since 2014 and 2015. Greece and Portugal on the other hand have been able to reduce a significant part of their high unemployment rate since 2013. However Greece still has the second highest unemployment rate of the considered countries.

[14] [15] [16] [17] [18] [19]

It is open whether the countries under consideration really have created work or their unemployment rate is disguised by part-time like in Germany. However it is certain that the import surpluses have replaced local jobs and produced unemployment. Furthermore it can be seen that industrial production has been permanently displaced.

[Economics] A New Agenda 2010 - What the Old One Has Caused
[Economics] A New Agenda 2010 - What a New One could Cause 2025-02-08

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