Germany on a roll as economic reforms pay off
Germany, once derided as the "sick man of Europe", has suddenly bounced back with its economy booming and budget overspending slashed after long and painful economic reforms.
Only a few years ago, Germany, with the eurozone's biggest economy, also had the lowest growth and one of the highest deficits.
But data published at the end of last week showed that Germany's economic fortunes improved dramatically last year when growth hit a six-year high point and the public deficit was hacked back by a third.
Growth of German gross domestic product (GDP) nearly tripled to 2.5 percent in 2006, from 0.9 percent in 2005, the federal statistics office Destatis calculated in preliminary figures.
It was the third-biggest increase in annual GDP since re-unification in 1990.
Germany is reaping the rewards of some very tough economic reforms, initiated by the previous government under Gerhard Schroeder and carried on by the current administration under Angela Merkel.
"After a wrenching five-year adjustment crisis, Germany is reaping the rewards of its strenuous efforts," diagnosed Bank of America economist Holger Schmieding.
"Pronounced wage restraint, some structural reforms, as well as cuts in taxes and government expenditure have led Germany to become a better place to invest in again," he said.
AFP
(China Daily 01/16/2007 page16)
