Not too many years ago, Germany was dubbed “the sick man of Europe”. But structural reforms have brought the country back on track. The medicine which was decried back then as “taking a wrecking ball to the welfare state” showed remarkable effect. Of course, reforms in Germany cannot serve as a blueprint for other countries.
The structural features of the European economies differ markedly and every country needs a different set of reforms. Nevertheless, the German experience may serve as evidence that reforms do pay off in the end. The reforms also helped Germany to recover rather quickly from the crisis. Indeed, the German economy regained momentum last year and according to all forecasts this upturn will continue.