Rising Powers and Economic Crisis in the Euro Area

Abstract

In response to the euro crisis, the euro area has adopted an export-led recovery and growth strategy. With Germany as the example to be emulated, and its labor market reforms of the past decade in particular, espe- cially the crisis-ridden member states in the south are instructed to improve their cost competitiveness in order to accumulate export surpluses with which to repay their debt. Emerging economies as the global growth engines of the coming decades are identifi ed as the markets that should absorb these trade surpluses. How realistic are these objectives and the instruments that are identifi ed to attain them? Are the right lessons drawn from the German example?