Great note from Nomura's Richard Koo, looking at the so-called "competitiveness problem" of the Southern European nations.
Rather than some inherent problem found there, Koo says that what happened is that after the 2000 tech bubble collapsed (a bubble which Germany shared heavily in) the ECB used exceptionally loose monetary policy to stimulate the economy, so that Germany wouldn't have to revive its economy via fiscal policy.
Rather than some inherent problem found there, Koo says that what happened is that after the 2000 tech bubble collapsed (a bubble which Germany shared heavily in) the ECB used exceptionally loose monetary policy to stimulate the economy, so that Germany wouldn't have to revive its economy via fiscal policy.