Comments: Germany revives, but Britain is still well ahead

Hello, I apologise for my intrusion. First thing, Europe is somewhat like Japan 20 or more years ago. Take BAA and the Spanish takeover. The money is Chinese and Arab oil money. They have no confidence in Paper and want Bricks and Mortar. Spain is just a vehicle. But the speed with which Britain and America is printing money, Could end in disaster. This, is of course only my uneducated, opinion.
My principal reason for this e-mail was to ask you to ,Please look at this Website: There are other Sites, and links are on a Page there. Please note the Organisations who have agreed to the link.
I did try to place an advertisement in The Times last year, but it was rejected. The Mail also rejected my attempt. The Telegraph did publish. Regards, ATF.

Posted by Anthony Thomas Flynn at June 6, 2006 08:04 PM

The reason Germany has had better export success is because of the rise in the pound since 1996. This priced our exports out. Indeed since then, despite the boom manufacturing output is about the same as it was then, which rather proves it. The curse of North Sea oil.
Talking of which since the rise in the oil price over the last 2 years
the value of our oil output must have more than doubled. This should have given a massive boost to GNP. Why has this not been shown in the figures?

Posted by David price at June 6, 2006 10:28 PM

What matters over the long term are growth and employment - the balance of payments doesn't matter at all, as long as it can be financed, since Britain has a floating exchange rate. If the markets ever believe that our current account position is unsustainable, our currency will fall and the position should improve (subject to certain conditions). Germany, of course, doesn't have this option since it foolishly embraced the Euro (or Teuero, as some people call it over there).

Germany has a better position on trade because its manufacturing sector is bloated, for a number of reasons, making up something like 35% of its economy compared to half that in Britain, the US or France (figures from memory). Manufacturing goods are much more tradeable than services, on average. Its education system produces a large number of high-school graduates perfect for manufacturing companies, and it has an admired system of technical education, in which I briefly participated as a teenager some years ago. Its university education is arguably much weaker than Britain's however, taking a much longer time to award its degrees and allowing people to drag out their student years almost indefinitely. During the Bretton Woods period, its exchange rate was low, which biased the economy in favour of producing tradeable goods, and the legacy of the companies and skills-base formed in that period survives. And the commitment of the Buba to price stability, and with it relatively stable interest rates, meant that manufacturing business in particular could plan better. In addition, there are numerous short-term factors such as the insatiable demand of industrialising third-world countries such as China for German capital goods.

Posted by PJ at June 8, 2006 05:12 PM
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