Some economists claim that the ECB’s policy is not expansionary enough for Germany. It is argued that real interest rates are higher in Germany than in many other euro area countries because of our low rate of inflation. I believe, however, that it is not sufficient to look at real interest rates in isolation.
We have to take into consideration at least two other factors. First of all, it has to be pointed out that the relatively low inflation rate in Germany results in a real depreciation within the euro area. By itself, this leads to increased competitiveness on the part of the German economy.