This has played a part in Germany’s becoming the anchor of stability in the euro area. Looking forward, however, it quickly becomes clear that the healthy condition of the German economy is certainly not assured on a long-term basis. Disregarding migration effects for the moment, there will be one-and-a-half million people fewer on the labour market in 2020. That is a decline of 2.5%.
Indeed, it was one of the founding fathers of the Freiburg School, Walter Eucken, who has – in his book, “Grundsätze” – provided the blueprint of a competitive order, for which he views stability oriented monetary policy as crucial pre-condition. “Alle Bemühungen, eine Wettbewerbsordnung zu verwirklichen, sind umsonst, solange eine gewisse Stabilität des Geldwertes nicht gesichert ist.