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In May the renowned Swiss IMD World Competitiveness Center announced the findings of its 26^th World Competitiveness Yearbook (WCY). According to its own words, the WCY analyzes and ranks the ability of nations to create and maintain an environment, which sustains the competitiveness of enterprises. Following the assumption that wealth creation takes place primarily at enterprise level (whether private or state-owned), enterprises operate in a national environment, which enhances or hinders their ability to compete domestically or internationally. The WCY describes such national environment by the four main factors a) Economic Performance, b) Government Efficiency, c) Business Efficiency and d) Infrastructure. The result is the 2014 world competiveness scoreboard ranking the current competitiveness status of 60 economies.

This year five European nations are among the top ten, namely Switzerland (rank 2) and Norway (rank 10) and the EC member countries Sweden (rank 4), Germany (rank 6) and Denmark (rank 9). Except Germany, none of these nations is a member of the Eurozone. Remarkably Germany, ranked 16 back in 2007, has improved its competitiveness since the beginning of the financial crisis.  Germany’s raise is mainly owed to its economic performance in recent years. Ongoing German challenges include, inter alia, the stabilization of the Eurozone and especially the European banking system. 

But how does the WCY rank other major EC nations? One can find UK (16) in the top twenty whereas France (rank 27) and Italy (rank 46) bring up the rear of the WCY scoreboard. Notably, the ranking of these nations has not considerably changed since 2007. Even before the financial crisis France and Italy have not been particularly competitive on an international level.

At first glance, the Euro has served Germany very well in spite of the Euro crisis but has left other members of the Eurozone lagging far behind. But the obvious strengths of European nations outside the Eurozone, namely Switzerland, Sweden, Denmark and Norway indicate the economic importance of a nation’s independent monetary policy. Depending on the German economic performance, bound to austerity and deprived of the possibility to depreciate the currency, it is to be feared that the countries of the Eurozone will lose further ground in the global competition.