Not All Germans Love The Euro These Days
Bloomberg View had a good column today on the popularity of the European single currency. The article shows how the euro has gone from being unloved in Germany at introduction in 2002 to well accepted, while the opposite has happened in Italy and France.
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But behind the aggregates lie deep fissures that tell a different story. Let me start the conversation on that story here.
Back in the mid-2000s, I started to notice that a lot of manufactured goods that I knew were once made in the USA were increasingly made in China. I had a habit of going through the department store and looking at labels just to see where they were made. Clothes were made in Bangladesh or Vietnam, sometimes Mexico. But plastic toys were all made in China it seemed. Something curious happened when I went to the home appliances section of the store though, because a lot of these goods were actually German products. I’m talking about Oral-B toothbrushes, Braun pop-up toasters and the like. And what I noticed was that – as the decade progressed, a lot of these goods that were once made in Germany started to be made in the Czech Republic or Hungary.
So by the late 2000s, when I went to Germany, I did the same checks I did in the US. The first thing I found was that country of origin labelling wasn’t enforced nearly as assiduously as in the US because a lot of products didn’t say where they came from. But I did notice that the Schleich plastic animals that my daughter collected that had all been made in Germany in the early 2000s were now made in China. And of course, practically all of the appliances were made in Eastern Europe.
Eastern Europe is to Germany as Mexico is to the United States. The forces of globalization and technology that have buffeted Donald Trump blames on NAFTA and China are at work in Europe as well, with the European expansion eastward helping to relocate manufacturing once performed in what Donald Rumsfeld derided as “Old Europe”. So when people in the US talk about manufacturing jobs moving to Mexico, I think about this.