Germany Turning Spanish, Spain Turning German: Moec

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Oct. 29 (Bloomberg) -- Gilles Moec, co-chief European economist at Deutsche Bank, discusses the economic changes he sees in Germany and Spain and what they mean for the European economy. He speaks on Bloomberg Television’s “Countdown.”


The slander is flying.

Explain your thinking.

What you are saying is that you are seeing a number of tentative swaps and the characteristics of each european economy.

Germany is turning french.

To some extent, yes.

There is a upside to view of the germany growth model.

Germany continues to ration the message demand and achieve competitiveness and stability.

Actually come at the moment, the main engine is consumer spending growth in europe and it comes from germany.

It stopped falling three or four years ago.

There is normal gain in competitiveness stop -- competitiveness.

All this talk of minimum wage is very french.

After 10 or 15 years of hard work in restoring profitability after the shock of unification, there is a temptation to move towards a system that will be dependent on domestic demand and wages are growing and consumer spending growing.

They are key parts of the can -- the economy.

That is the problem.

That is part of the integration.

It is hard to move away from it- lead model.

Clearly, that is the root of the german ross says.

They're going to try to find the right way.

Yes, the bulk of the german economy is still on exports and competitiveness.

If they go too far on wages, there could be backlash.

Don't forget about the success that we had in germany with the labor market.

That was due to the possibility of creating lots of jobs at the low end of the wage scale.

If we get into a minimum wage that is close to the minimum wage, a lot of the success and progress in taking people out of welfare could be jeopardized.

I think that the general view of the german elections was that it was a non-event.

There were no dramatic decisions about europe.

Where germany is going in the next few years, there are stark choices to make.

The germans are turning french.

The spanish are turning german.

Again, i think there is a view of spain as a country that continues to pile up capital and labor.

That was the model until 2007. spain has been forced to abandon this model.

What we have seen is a very nice catch up and profitability in the last three or four years and a nice improvement in performance and profitability.

Lots of changes remain.

I think the reality of the new model in spain is about trying to secure strong market shares on the outside and trying to keep costs in check.

They are good at that.

And, probably by force, a growth model in spain that will be driven by exports.

This text has been automatically generated. It may not be 100% accurate.


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