Alive, Well and Living in Germany

As the European Central Bank raises the interest rate in conformity with the Maastricht enshrined friedmanite theories on controlling inflation by restricting money supply, Germany follows positively neo- keynesian policies to enjoy a growth rate of over 3%.

Two characteristics stand out: the investments in infrastructure at both federal state and regional Lander levels, using European Union regional funding and allowances; and the utilisation of lower wage and other costs in the newer Union member states, to where medium and low level manufacturing is being rapidly outsourced. This last is particularly important in providing manufacturing to the high, guaranteed German standards that are recognised and sought by consumers; China, India and Brazil aren't getting a look-in.

In the meantime, and with the encouragement of state direction and provision, investment is being poured into cutting edge technologies; the provision of financial and other services as the basis of the moden state's economy has been rejected in favour of highest tech research and manufacturing together with the maintenance of a standard manufacturing base next door (so to speak). Education, education, education has returned high investment by providing a skilled and ready workforce that equally readily is rewarded with high quality work.

While Friedman is doubtless making his hyper-liberal contribution to holding down inflation, the web of trade union/ employers/regional/federal state agreements on wages and conditions, welfare and social provision must have its recognition too; Germany and indeed much of central Europe where this model holds, has updated its trade unions and its workforce relations with other engines of growth and well being.

Ten wasted years after the New Dawn, we have a London city-state and a depessed and dependent hinterland, unreformed unions, inefficient welfare and social provision at enormous cost, with Scotland and Wales making for the hills.