EZA 926 Report: Germany / euro area – is small government beautiful?
15 December 2009
- The German coalition agreement provides a substantial scaling back of government activities through privatisation, deregulation and tax cuts.
- Similar promises were made in 2007/8 by the then incoming conservative governments in France and Italy. So far both governments have failed to deliver.
- The pro business coalition will also face a steep uphill struggle in rolling back state involvement in the economy both from the left, and from internal division.
- Since economic reform will be pivotal in determining the prospect of a sustained recovery in Germany and in Europe, this piece aims to give a brief account on the key yardsticks in terms of the size of government and the hurdles to be overcome.
Asset conclusions: decisions on rolling back the public sector may offer the chance for Europe to engineer a major out performance of financial assets, both equity capital and fixed income.
Please see the attached analysis from Michael Clauss as a pdf file to read onscreen or simply print and read at your convenience.
Dr Michael Clauss: Germany Politics / Economy / Equities Sectoral Analysis
Tel: +49 89 64254046
michael.clauss@eurozoneadvisors.com
Discussion Partners
John Arrowsmith: ECB / Regulatory
Tel: +44 7720 59 1726
john.arrowsmith@eurozoneadvisors.com
Dr Michael Clauss: Germany Politics / Economy / Equities Sectoral Analysis
Tel: +49 89 64254046
michael.clauss@eurozoneadvisors.com
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