Lessons from Europe's Winners and Losers

Berlin had perfect weather last week, and there was no better place to watch the world go to pieces than Dressler's open-air terrace on Unter den Linden. Berlin famously is one of the world's coolest cities, an edgy outlet for young artists. But it is also the face of the economic future. German unemployment is down from 11% in 2006 to 6.8% this April, with barely a bump during the Great Recession of 2008. Back in 2006, by contrast, Spain's unemployment rate was just 8%. Now it's at 25%. Spain is likely to go bankrupt, right after Greece, and the Germans don't really care. All of Germany's export growth in the past ten years has gone to the east, not the south.

One really can't talk about a European economy when key indicators are moving in opposite directions in different countries.


Germany will emerge from the European crisis intact. So far, Germany hasn't even noticed that there is a crisis. Berlin real estate prices are soaring, I'm told, as Greeks and Italians turn up with suitcases full of cash to invest in one of the few property markets that showed no price appreciation during the bubble years. More important: the smartest Greeks and Spaniards are looking for work in Germany. Germany's workforce has begun to shrink rapidly, but it will assimilate skilled workers and professionals from the feckless European south.