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2011-06-28 Natixis Do Germans Work More Than Southern Europeans - No, They Work Much Less, And Not More Intensely

2011-06-28 Natixis Do Germans Work More Than Southern Europeans - No, They Work Much Less, And Not More Intensely

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Published by: kjlaqi on Jun 29, 2011
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12/19/2011

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3 June 2011 - No. 401
Do Germans work more than SouthernEuropeans? No, they work much less, andnot more intensely
ECONOMIC RESEARCH
Author:
Patrick Artus 
 Chancellor Angela Merkel has highlighted the short working time of the Southern Europeans as one of the main reasons for their economic problems; she has actually suggested that the length of holidays and the retirement age should be harmonised for the Southern euro-zone countries to "deserve" Germany's support.We will first compare the working time in Germany and in the Southern euro- zone countries (France, Italy, Spain, Portugal and Greece) over one year and over their lifetime.We will then try to identify the factors, other than the working time, that can explain the difference between the economic situation of Germany and the Southern euro-zone countries: productivity, productive specialisation, labour cost, savings; quality of the labour force.We show that: 
-
 
the Germans work much less (over one year, over their lifetime) than the Southern Europeans; and they do not work more intensely either; 
-
 
Germany's better economic performance is above all explained by the innovation drive and by the higher household and corporate savings rate.
 
The major differencesbetween Germany andthe Southern euro-zonecountries
We use the term
"Southern euro zone" for France, Italy, Spain, Portugal andGreece.
We know
the major differences between Germany and the Southern euro-zonecountries,
which are:
-
 
the weight of industry (Charts 1A
and
B),
which is higher in Germany (Italy isnot a "Southern" country from this point of view);
-
 as a result,
foreign trade,
where Germany runs a surplus while the Southerneuro zone runs a deficit
(Charts 2A
and
B),
due to
Germany's far greaterexposure to countries enjoying rapid growth (Chart 2C);
-
 
the use of credit prior to the crisis - and fiscal deficits since the crisis - toboost growth
in the Southern euro zone, but not in Germany
(Charts 3A
and
 B);
this is currently weakening the economy of the Southern euro-zonecountries, given the deleveraging needed in the private as well as in the publicsector;
-
 
the ability to obtain growth in the current situation, which is markedlybetter in Germany (Chart 4),
since there is no need for deleveraging inGermany, and since the high corporate profitability
(Chart 5A)
and the low levelof unemployment
(Chart 5B)
is paving the way for quite rapid wage growth
(Charts 5C
and
D)
, which is not the case in the Southern euro-zone countries.
Chart 1AManufacturing employment (as % of total)
1012141618202224990001020304050607080910111012141618202224
Germany France ItalySpain Portugal Greece
Sources: Datastream, Eurostat, Natixis 
Chart 1BValue added in the manufacturing sector(in volume terms, as % of GDP)
68101214161820222499000102030405060708091011681012141618202224
Germany France ItalySpain Portugal Greece
Sources: Datastream, EIU, OECD, Eurostat, Natixi
 
Chart 2ATrade balance (EUR bn, annualised)
-150-100-5005010015020025099000102030405060708091011-150-100-50050100150200250
Germany France ItalySpain Portugal Greece
Sources: Datastream, Natixis 
Chart 2BCurrent-account balance (as % of GDP)
-20-15-10-5051099000102030405060708091011-20-15-10-50510
Germany France ItalySpain Portugal Greece
Sources: Datastream, Natixis 
 
Flash 2011 – 401-
2
 
 
Chart 2CExports to emerging countries as a whole incl.Russia and OPEC (as % of GDP)
02468101299000102030405060708091011024681012
Germany France SpainItaly Greece Portugal
Sources: Datastream, Natixis 
Chart 3ALoans to the private sector* (Y/Y as %)
-505101520253035404599000102030405060708091011-5051015202530354045
Germany FranceItaly SpainPortugal Greece
Sources: Datastream, Natixis 
(*) Households + companies
 
Chart 3BFiscal deficit (as % of GDP)
-16-12-8-4049900010203040506070809101112-16-12-8-404
Germany France ItalySpain Portugal Greece
Sources: Datastream, Natixis forecasts 
Chart 4Real GDP growth (Y/Y as %)
-8-6-4-2024689900010203040506070809101112-8-6-4-202468
Germany France ItalySpain Portugal Greece
Sources: Datastream, Natixis forecasts 
 
Chart 5ASelf-financing rate
204060801001201401601809900010203040506070809101120406080100120140160180
Germany France ItalySpain Portugal Greece
Sources: Datastream, Eurostat, Natixis 
Chart 5BUnemployment rate
369121518219900010203040506070809101136912151821
Germany FranceItaly SpainPortugal Greece
Sources: Datastream, Eurostat, Natixis 
 
Flash 2011– 401 -
3
 

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