Germany's Dual Economy: The export juggernaut alongside overregulation and low pay in services
Germany's Dual Economy: This week the Organisation for Economic Cooperation and Development (OECD) turned the tables on Germany by highlighting overregulation and weaknesses that could imperil growth in coming years as ageing of the population accelerates. Noting major progress on reforms, the think-tank for mainly developed countries called for reforms to foster domestic demand that should focus on improving competition; enhancing framework conditions for investment; and innovation in Germany’s domestic sector. This includes lowering the strict regulation in some services sectors, notably professional services, and improving innovation support, for example by introducing a tax credit for R&D complementing direct R&D support. Germany also has a problem with low-pay at the bottom of the economic pyramid.
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