German shoppers hold the key to EU growth

"Supply side reforms are no panacea," said Simon Tilford, chief economist for the Centre for European Reform, a think-tank. Germany, where unemployment is low, should be adopting expansionary macroeconomic policies to boost demand, he said.

"As austerity continues into 2013, more surprises about the weakness of economic activity in Europe are inevitable. The belief that this is just a temporary shock and the economic recovery is going to gain momentum is little more than wishful thinking." ..."Policy remains to a large extent captured by export-oriented industrial interests," said Mr Tilford. "They can’t save the rest of the eurozone as a whole, but for Germany to be running a still significant current account surplus with the rest of the eurozone is deeply unhelpful."