Macroscope | Germany may want to rein in its push for monetary tightening as its own economy shows signs of cooling

Germany embarked on its economic recovery long ago. Ramped up by a steady stream of super-stimulus, German expansion has surged and domestic employment soared in a self-reinforcing revival since the 2008 crash.

It is no wonder Europe’s monetary leaders face a judgment of Solomon between reining Germany in and pumping up recovery for Europe’s slower economies. Who would want to be in the European Central Bank’s shoes as decision day looms closer?

German leaders know full well they have had too much of a good thing in recent years. An overload of cheap and easy money and a relatively weak euro have raised the lid on inflation fears in recent years and the national mindset remains adamant about normalising ECB monetary policy as soon as possible. Inflation has always been the big bogeyman for German policymakers and they are not going to give in easily on putting their own domestic monetary priorities first.