Most people see Europe's economic crisis as a cautionary tale of good and bad policymaking, in which fiscally prudent countries, such as Germany, remain stable, while reckless ones, such as Greece, unravel.
So ingrained is this idea that it's now common to hear analysts say Europe must become "German" to exit from the crisis, adopting Teutonic approaches to policy — from fiscal tightening to labor- and product-market reforms. If only societies on Europe's periphery can learn to do what the Germans do, the argument goes, the European Union and its single currency will have a stable future.
This is wrong and we already have evidence to show it. The question isn't whether Germany's policies are correct. It is whether they will produce the same outcomes in different economic and political environments. To see that they don't, you need to ignore Greece and look at its neighbor, Bulgaria.
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