How would I have assessed the economic situation in Germany, had I given this speech six years ago? In fact, my assessment would have been quite dire. In spring 2004, the German economy was just about to turn the corner after three years of stagnation. However, the relief about the first signs of economic recovery was clouded by obvious structural problems.
Whereas the cyclical upturn was sustained primarily by stimuli to German exports stemming from a buoyant world economy, there were hardly any signs of a broadly based and selfsustaining upswing, not least owing to high structural unemployment and depressed private consumption.