Will Britain Overtake Germany?
Aug 31st 2004, 3:26 pm
#1
Guest
Posts: n/a
Will Britain Overtake Germany?
August 28, 2004
GLOBALIST
Can Galloping Britain Catch Gloomy Germany?
By ROGER COHEN,
International Herald Tribune
"The British press has been making much of the notion that Britain might
overtake Germany as Europe's largest economy by 2025. Economic predictions,
particularly those that peer so far into the future, are questionable
things, but this one at least has the merit of framing a central fact of
European life: a galloping Britain and a gloomy Germany.
A Mori opinion poll this month for the Financial Times revealed that only 7
percent of the British population is concerned about unemployment. The
reason is that if you lose your job, you find another one: the jobless rate,
at 4.8 percent, is the lowest since the 1970s.
In Germany, by contrast, the unemployment rate is more than double the
British, and over 4 million people are looking for jobs six years after
Chancellor Gerhard Schröder declared, on taking office, that slashing
unemployment was his top priority. Katinka Barysch, a German economist based
in Britain, noted that surveys suggest that two-thirds of Germans worry
about losing their jobs.
"When you're worried," she added, "you don't spend. When you feel good, you
do." That is a fair summary of the state of the national psyches in Germany
and Britain these days. Domestic consumption in Germany remains anemic
because confidence is low; companies are not hiring, because they do not see
the demand to justify it. The country, still struggling with a unification
hangover, seems locked in a negative spiral.
The British, however, buoyed by property prices that have risen close to 20
percent in the past year, are on a spending spree. The prosperity of central
London has become almost obscene; even once depressed northern towns like
Newcastle have come alive.
All the consumption is helping to fuel growth expected to reach close to 4
percent this year, about double the predicted German level.
The political impact of these differences is broad. Prime Minister Tony
Blair seems well placed to win the next election, despite his difficulties
over supporting the United States in Iraq, precisely because the economy is
so strong. Schröder, who avoided an unpopular war, looks increasingly
embattled because his talk of reform to make the German economy nimbler has
not been matched by action.
Germany accounts for about a third of the euro economy; its fortunes, along
with those of France, dictate the image of the euro zone, even if other
smaller countries like the Netherlands and Finland are doing well. As long
as Germany's funk continues, and France does little better, any chance of
Britain joining the euro will remain remote. Why join a club that is
struggling?
"Britain should certainly not join the euro zone because it is not
structurally aligned," said David Hillier, chief economist for Barclays
Capital. "In fact, with its flexible labor markets, lack of red tape, low
savings ratio, strong housing market and current account deficit, Britain is
far more similar to the United States than the euro zone. If Britain is
going to join a monetary area, it should join the dollar."
It is true the two economies seem to have a lot in common, not least the
strong fiscal stimulus provided in recent years by both the British and
American governments. But Hillier's is a provocative suggestion. The Finnish
and Italian economies do not have a lot in common, but manage to coexist
within the euro zone. Britain might also find an accommodation if it had the
will.
The fact is that British objections to the euro retain a large political
component; the sovereign isle remains prickly about its sovereignty. Britain
is also understandably wary of compromising its success. The vitality of
Blair's economy is striking and the battles now being fought in Germany
between management and unions over competitiveness - longer hours for the
same pay - have the feel of struggles resolved some time ago in Britain.
But might the British boom soon bust?
Interest rates have moved up smartly since last November; that may soon
start to worry all those borrowing against their homes to buy and buy.
The sheer pace of the rise in house prices has some people talking about a
bubble and recalling the housing-price collapse of the early 1990s. Net
personal borrowing as a percentage of post-tax income is about 120 percent.
That is higher than in the late 1980s, and certainly more than the average
German burgher would tolerate.
The Bank of England, whose empowerment with control over interest rates in
1997 coincided with the start of a period of steady expansion, has a close
eye on these problems and has proved adept at keeping the economy on course.
Most economists expect a modest slowdown, but no crash.
Gordon Brown, the chancellor of the exchequer, knows his chances of
succeeding Blair depend on extending Britain's "NICE" - Non-Inflationary,
Consistently Expansionary - times.
"The British picture has its shadows," said Barysch. "The most unequal
economy in the European Union, with spreading poverty and social exclusion.
Poor public transport that often leaves people unable to get to work on
time. But this is a place now boasting full employment in the south-east and
a country flexible enough to allow people to get ahead. Euro-zone job
protection needs reform."
Whether that reform will ever come to Germany remains uncertain. If it does
not, the recent talk of the British economy overtaking the German may prove
more than fanciful. The chattering stemmed mainly from a report from a
Barclays economist, Christopher Smallwood, who suggested that the
combination of a plunging German work force and slower German growth would
put Britain ahead in just over 20 years. That is quite a thought considering
Germany's population is now 82.4 million and Britain's 60 million.
But I suspect visions of hordes of Brits swarming down Unter den Linden
boasting of their superiority - you can just hear them, "We are the biggest
and we are the best!" - may well be enough to spur Germans to rethink things
in time to prove yet another economic prediction wrong."
</>
GLOBALIST
Can Galloping Britain Catch Gloomy Germany?
By ROGER COHEN,
International Herald Tribune
"The British press has been making much of the notion that Britain might
overtake Germany as Europe's largest economy by 2025. Economic predictions,
particularly those that peer so far into the future, are questionable
things, but this one at least has the merit of framing a central fact of
European life: a galloping Britain and a gloomy Germany.
A Mori opinion poll this month for the Financial Times revealed that only 7
percent of the British population is concerned about unemployment. The
reason is that if you lose your job, you find another one: the jobless rate,
at 4.8 percent, is the lowest since the 1970s.
In Germany, by contrast, the unemployment rate is more than double the
British, and over 4 million people are looking for jobs six years after
Chancellor Gerhard Schröder declared, on taking office, that slashing
unemployment was his top priority. Katinka Barysch, a German economist based
in Britain, noted that surveys suggest that two-thirds of Germans worry
about losing their jobs.
"When you're worried," she added, "you don't spend. When you feel good, you
do." That is a fair summary of the state of the national psyches in Germany
and Britain these days. Domestic consumption in Germany remains anemic
because confidence is low; companies are not hiring, because they do not see
the demand to justify it. The country, still struggling with a unification
hangover, seems locked in a negative spiral.
The British, however, buoyed by property prices that have risen close to 20
percent in the past year, are on a spending spree. The prosperity of central
London has become almost obscene; even once depressed northern towns like
Newcastle have come alive.
All the consumption is helping to fuel growth expected to reach close to 4
percent this year, about double the predicted German level.
The political impact of these differences is broad. Prime Minister Tony
Blair seems well placed to win the next election, despite his difficulties
over supporting the United States in Iraq, precisely because the economy is
so strong. Schröder, who avoided an unpopular war, looks increasingly
embattled because his talk of reform to make the German economy nimbler has
not been matched by action.
Germany accounts for about a third of the euro economy; its fortunes, along
with those of France, dictate the image of the euro zone, even if other
smaller countries like the Netherlands and Finland are doing well. As long
as Germany's funk continues, and France does little better, any chance of
Britain joining the euro will remain remote. Why join a club that is
struggling?
"Britain should certainly not join the euro zone because it is not
structurally aligned," said David Hillier, chief economist for Barclays
Capital. "In fact, with its flexible labor markets, lack of red tape, low
savings ratio, strong housing market and current account deficit, Britain is
far more similar to the United States than the euro zone. If Britain is
going to join a monetary area, it should join the dollar."
It is true the two economies seem to have a lot in common, not least the
strong fiscal stimulus provided in recent years by both the British and
American governments. But Hillier's is a provocative suggestion. The Finnish
and Italian economies do not have a lot in common, but manage to coexist
within the euro zone. Britain might also find an accommodation if it had the
will.
The fact is that British objections to the euro retain a large political
component; the sovereign isle remains prickly about its sovereignty. Britain
is also understandably wary of compromising its success. The vitality of
Blair's economy is striking and the battles now being fought in Germany
between management and unions over competitiveness - longer hours for the
same pay - have the feel of struggles resolved some time ago in Britain.
But might the British boom soon bust?
Interest rates have moved up smartly since last November; that may soon
start to worry all those borrowing against their homes to buy and buy.
The sheer pace of the rise in house prices has some people talking about a
bubble and recalling the housing-price collapse of the early 1990s. Net
personal borrowing as a percentage of post-tax income is about 120 percent.
That is higher than in the late 1980s, and certainly more than the average
German burgher would tolerate.
The Bank of England, whose empowerment with control over interest rates in
1997 coincided with the start of a period of steady expansion, has a close
eye on these problems and has proved adept at keeping the economy on course.
Most economists expect a modest slowdown, but no crash.
Gordon Brown, the chancellor of the exchequer, knows his chances of
succeeding Blair depend on extending Britain's "NICE" - Non-Inflationary,
Consistently Expansionary - times.
"The British picture has its shadows," said Barysch. "The most unequal
economy in the European Union, with spreading poverty and social exclusion.
Poor public transport that often leaves people unable to get to work on
time. But this is a place now boasting full employment in the south-east and
a country flexible enough to allow people to get ahead. Euro-zone job
protection needs reform."
Whether that reform will ever come to Germany remains uncertain. If it does
not, the recent talk of the British economy overtaking the German may prove
more than fanciful. The chattering stemmed mainly from a report from a
Barclays economist, Christopher Smallwood, who suggested that the
combination of a plunging German work force and slower German growth would
put Britain ahead in just over 20 years. That is quite a thought considering
Germany's population is now 82.4 million and Britain's 60 million.
But I suspect visions of hordes of Brits swarming down Unter den Linden
boasting of their superiority - you can just hear them, "We are the biggest
and we are the best!" - may well be enough to spur Germans to rethink things
in time to prove yet another economic prediction wrong."
</>
Sep 1st 2004, 3:35 am
#2
Guest
Posts: n/a
Re: Will Britain Overtake Germany?
On Wed, 01 Sep 2004 03:26:47 GMT, "Gregory Morrow"
<[email protected]> wrote:
>August 28, 2004
>GLOBALIST
>Can Galloping Britain Catch Gloomy Germany?
>By ROGER COHEN,
>International Herald Tribune
>"The British press has been making much of the notion that Britain might
>overtake Germany as Europe's largest economy by 2025. Economic predictions,
>particularly those that peer so far into the future, are questionable
>things, but this one at least has the merit of framing a central fact of
>European life: a galloping Britain and a gloomy Germany.
Bismark must be spinning in his grave.
************* DAVE HATUNEN ([email protected]) *************
* Tucson Arizona, out where the cacti grow *
* My typos & mispellings are intentional copyright traps *
<[email protected]> wrote:
>August 28, 2004
>GLOBALIST
>Can Galloping Britain Catch Gloomy Germany?
>By ROGER COHEN,
>International Herald Tribune
>"The British press has been making much of the notion that Britain might
>overtake Germany as Europe's largest economy by 2025. Economic predictions,
>particularly those that peer so far into the future, are questionable
>things, but this one at least has the merit of framing a central fact of
>European life: a galloping Britain and a gloomy Germany.
Bismark must be spinning in his grave.
************* DAVE HATUNEN ([email protected]) *************
* Tucson Arizona, out where the cacti grow *
* My typos & mispellings are intentional copyright traps *
Sep 1st 2004, 3:45 am
#3
Guest
Posts: n/a
Re: Will Britain Overtake Germany?
On Wed, 1 Sep 2004 19:41:33 +0300, "Markku Grönroos"
<[email protected]> wrote:
>"Hatunen" <[email protected]> kirjoitti viestissä
>news:[email protected].. .
>> >
>> >"The British press has been making much of the notion that Britain might
>> >overtake Germany as Europe's largest economy by 2025. Economic
>predictions,
>> >particularly those that peer so far into the future, are questionable
>> >things, but this one at least has the merit of framing a central fact of
>> >European life: a galloping Britain and a gloomy Germany.
>> Bismark must be spinning in his grave.
>Since when Otto von or anyone else has paid slightest attention to the
>British press aside from some Brits?
Think drollery.
************* DAVE HATUNEN ([email protected]) *************
* Tucson Arizona, out where the cacti grow *
* My typos & mispellings are intentional copyright traps *
<[email protected]> wrote:
>"Hatunen" <[email protected]> kirjoitti viestissä
>news:[email protected].. .
>> >
>> >"The British press has been making much of the notion that Britain might
>> >overtake Germany as Europe's largest economy by 2025. Economic
>predictions,
>> >particularly those that peer so far into the future, are questionable
>> >things, but this one at least has the merit of framing a central fact of
>> >European life: a galloping Britain and a gloomy Germany.
>> Bismark must be spinning in his grave.
>Since when Otto von or anyone else has paid slightest attention to the
>British press aside from some Brits?
Think drollery.
************* DAVE HATUNEN ([email protected]) *************
* Tucson Arizona, out where the cacti grow *
* My typos & mispellings are intentional copyright traps *
Sep 1st 2004, 4:41 am
#4
Guest
Posts: n/a
Re: Will Britain Overtake Germany?
"Hatunen" <[email protected]> kirjoitti viestissä
news:[email protected]...
> >
> >"The British press has been making much of the notion that Britain might
> >overtake Germany as Europe's largest economy by 2025. Economic
predictions,
> >particularly those that peer so far into the future, are questionable
> >things, but this one at least has the merit of framing a central fact of
> >European life: a galloping Britain and a gloomy Germany.
> Bismark must be spinning in his grave.
Since when Otto von or anyone else has paid slightest attention to the
British press aside from some Brits?
news:[email protected]...
> >
> >"The British press has been making much of the notion that Britain might
> >overtake Germany as Europe's largest economy by 2025. Economic
predictions,
> >particularly those that peer so far into the future, are questionable
> >things, but this one at least has the merit of framing a central fact of
> >European life: a galloping Britain and a gloomy Germany.
> Bismark must be spinning in his grave.
Since when Otto von or anyone else has paid slightest attention to the
British press aside from some Brits?
Sep 1st 2004, 3:40 pm
#5
Guest
Posts: n/a
Re: Will Britain Overtake Germany?
"Gregory Morrow" <[email protected]>
climbed onto an orange crate and shouted:
>"Britain should certainly not join the euro zone because it is not
>structurally aligned," said David Hillier, chief economist for Barclays
>Capital. "In fact, with its flexible labor markets, lack of red tape, low
>savings ratio, strong housing market and current account deficit, Britain is
>far more similar to the United States than the euro zone. If Britain is
>going to join a monetary area, it should join the dollar."
Prices in the UK are so high that the only way I can keep from getting
upset at the cost of things when visiting the UK is to pretend that
pounds are dollars. Never thought I'd be a trendsetter.
--
The bass player is like a good offensive line. The team sucks when you
are not on your game. When you're on your game, everyone congratulates
the quarterback, running back, and receivers. -- Dave in a.g.b.
climbed onto an orange crate and shouted:
>"Britain should certainly not join the euro zone because it is not
>structurally aligned," said David Hillier, chief economist for Barclays
>Capital. "In fact, with its flexible labor markets, lack of red tape, low
>savings ratio, strong housing market and current account deficit, Britain is
>far more similar to the United States than the euro zone. If Britain is
>going to join a monetary area, it should join the dollar."
Prices in the UK are so high that the only way I can keep from getting
upset at the cost of things when visiting the UK is to pretend that
pounds are dollars. Never thought I'd be a trendsetter.
--
The bass player is like a good offensive line. The team sucks when you
are not on your game. When you're on your game, everyone congratulates
the quarterback, running back, and receivers. -- Dave in a.g.b.
Sep 1st 2004, 5:01 pm
#6
Guest
Posts: n/a
Re: Will Britain Overtake Germany?
Hatunen <[email protected]> wrote in
news:[email protected]:
> Bismark must be spinning in his grave.
Chances are he would be impressed. See reasoning in
http://groups.google.de/groups?as_um...rthlink.net%3E
Regards
--
There are still 27466510 unread articles in 24412 groups.
http://www.wschwanke.de/ usenet_20031215 (AT) wschwanke (DOT) de
news:[email protected]:
> Bismark must be spinning in his grave.
Chances are he would be impressed. See reasoning in
http://groups.google.de/groups?as_um...rthlink.net%3E
Regards
--
There are still 27466510 unread articles in 24412 groups.
http://www.wschwanke.de/ usenet_20031215 (AT) wschwanke (DOT) de
Sep 1st 2004, 9:20 pm
#7
Guest
Posts: n/a
Re: Will Britain Overtake Germany?
[email protected] (Charles Hawtrey) writes:
> Prices in the UK are so high that the only way I can keep from getting
> upset at the cost of things when visiting the UK is to pretend that
> pounds are dollars. Never thought I'd be a trendsetter.
They're also very variable. You have to "shop around" vigorously to
find reasonable prices. It can be done.
--
-- Chris.
> Prices in the UK are so high that the only way I can keep from getting
> upset at the cost of things when visiting the UK is to pretend that
> pounds are dollars. Never thought I'd be a trendsetter.
They're also very variable. You have to "shop around" vigorously to
find reasonable prices. It can be done.
--
-- Chris.
