EU elections 2014: Does Germany rule your world?

...The success of the Mittelstand is thanks to German banks, says Simon Tilford, chief economist of the Centre for European Reform.

“This is partly down to the structure of the German financial system. Small and medium sized businesses have been able to access long-term capital at quite favourable interest rates. Regional banks were essentially underwritten by the state, borrowing very cheaply, and then lending on to these businesses at very reasonable rates.”

...However, what is becoming an increasing issue for Europe is Germany’s “fetishisation” of exports (in Tilford’s phrase) has become the template for so many other countries.

As Tilford says: “It is very hard for the eurozone as a whole if its largest component has a large surplus of savings, an economy which is so export-dependent. Because obviously we can’t all be running trade surpluses simultaneously. And the problem is that everyone in the eurozone is trying to emulate Germany - by chasing export growth. But Germany can only be Germany because others are not Germany.”