ABROAD and at home, a rising chorus is criticising Germany’s chancellor, Angela Merkel, for her economic policies. Her foreign detractors are frustrated by Germany’s quasi-fetishistic pursuit of “the black zero”, as Wolfgang Schäuble, her finance minister, calls the budget that he plans for next year—the first since 1969 to aim for balance. At the recent IMF/World Bank meetings in Washington, DC, he became increasingly defensive as one speaker after another blamed Germany’s austerity and huge current-account surplus for holding back the world economy. Germany should exploit record low interest rates and its peerless fiscal leeway to borrow and invest more, many argued. Other countries would do better to emulate Germany and save more, Mr Schäuble replied.At home calls for more public investment are growing. But many German economists share Mrs Merkel’s desire to balance the budget, as do her centre-left Social Democrat (SPD) coalition partners. Domestic critics tend to be crosser about the soft-leftish policies that she, despite being leader of the centre-right Christian Democrats (CDU), is enacting with the enthusiastic support of the SPD. These include: pension…
The Economist: Europe
