German industry has been working to increase productivity, with notable success:
German firms are conquering the market for the machines that power world industry, racking up record sales of €98billion (£67billion) last year on the back of booming growth in Asia.
Germany’s engineering federation in Frankfurt, VDMA, said the country’s share of the €500billion global market for everything from laser systems to machine tools and polymer electronics rose to 19.3pc in 2004, compared with 5.2pc for France and 4.8pc for Britain.
Sales to China jumped 26pc on the year before, reaching €7.8billion.
Analysts say it is the latest evidence that Germany is emerging as lean and fit “Teutonic tiger” after a decade-long squeeze on wages and corporate costs, despite the continued slump at home and a raft of quality problems in the car industry.
The country is now the biggest exporter of merchandise of all kinds, ahead of the United States, China, and Japan, cornering 10pc of total world export market, according to the World Trade Organisation’s 2005 report.
That won’t do much for Germany’s unemployed, or the German economy in general, at least not in the short run. German wages are too high, even given the high productivity, and the labor market and general regulations being far too rigid. Wages will have to be frozen at current levels for a number of years, and regulations have to become less onerous before any substantial improvements can be expected.