In Germany private consumption virtually stagnated for nearly a decade and clearly lagged behind GDP growth. This Country Focus uses the estimation of a consumption function to show that the drop in employment is the most important factor behind the reluctance to consume in the first half of...

Prior to a recovery in 2007 and 2008, Germany's public finances had deteriorated substantially since reunification. The lack of efficient expenditure and budget rules was a crucial factor in this development. To limit future debt, proposals for a new budget rule are currently being discussed in...