ies.
Should the project of a European monetary union fail, there is a threat of competitive devaluations, trade wars, protectionism, renationalization of economic policy, deflation--if not depression--and, in general, a regression to the 1930s. That was the gloomy picture painted not long ago by German President Roman Herzog, against the background of which he emphasized the efforts needed to bring about decisive progress in the European unification process.
Germany, along with the rest of Europe, need significant economic corrections. Unemployment in Germany has reached record levels, economic growth has slowed to a crawl, German competitiveness in high technology industries is declining and even the country's ability to meet the Maastricht criteria for European monetary union is being questioned.
Any remaining doubts about the grave straits Germany finds itself in economically were removed by recent unemployment figures showing a sharp rise in unemployment, bringing the total up to 4.66 million. Helmut Kohl called for a wage hike moratorium in order to again make it cheaper to hire new workers. Germany's 12.2% unemployment rate (19% for eastern and 10.8% in Western Germany) is much higher than the current rate in Britain.
Not only are more Germans unemployed than ever before, but economic growth has also been sluggish. National unification led to a temporary consumer boom as East Germans bought the Western cars and electronic goods that had been denied them in the days of the Wall. But this temporarily disguised a long-term trend toward slower growth. Germany's famous "economic miracle" really only took place in the 1950s and early 1960s when the country's 12% plus growth rates were among the highest in the world and comparable to those of Asian "tiger" economies today. But by the late 1960s and 1970s German growth rates were overtaken by those of France, Italy, and above all, Japan. By the 1980s Germany was growi...