| If you were to believe the consensus view about Germany, the economy is on its knees, public finances are in such bad shape that Germany will not meet the terms for EMU entry in 1999, and German industry is locked in the sclerosis of high labour costs and declining world market share. Nothing could be further from the truth. Germany will get its fiscal house in order in 1997. And German reforms at the levels of the household (shop opening hours), corporate (embracing shareholder value) and government (fiscal consolidation) are increasingly entrenched. Grass-roots reform of German corporate culture will restore its health. The irony is that none of these things are happening in France. France won't make Maastricht, the economy is not reviving and corporate and labour market reforms are missing. This means that a quality gap between the two economies is opening up, which could scupper European integration and monetary union exactly the opposite of the intention of Kohl's reforms. If you want to know why Germany's different, visit Bonn: it is the most understated political capital for one of the world's most powerful nations. The parliament is a low-lying building, aptly called the "goldfish bowl". |