ABSTRACT
This introduction presents the overview of key concepts discussed in the subsequent chapters of this book. The book looks at how a monetary union works and what that means for competitiveness within the Euro Area. It analyses the German model in order to assess whether wage restraint should be a policy benchmark for other Euro Area countries. The book argues that the German export-led growth model is not sustainable if the target is the well-being of the whole of Europe. It explains the implementation of fiscal federalism in Germany and its effectiveness in fostering regional development. The book reviews economic developments in East Germany after reunification and derive the policy implications for speeding up the convergence with the West. It also reviews a variety of features of the German model with respect to labour market reforms and wage restraint, trade developments, and the evolution of domestic demand.
