Germany's Reward for Good Behavior

Virtue has been duly rewarded. That, at least, would seem to be the immediate conclusion to be drawn from the divergent paths taken by the German economy and that of much of the rest of the eurozone, notably Italy. Germany, which has clamped down on wages, brought in sweeping labour market reforms, cut its budget deficit, and boosted exports, has grown by 0.5 per cent in the first quarter of this year. Italy, which has done none of those things, shrank by 0.8 per cent. France, which under Nicolas Sarkozy had followed a more or less middle course, had a middling experience: a flat quarter.