Can the German miracle be made to last? Instead of succumbing to a credit crunch or any other of the much-hyped global calamities, the German economy powered ahead in early 2008 at its fastest pace in 12 years. Although half of the recorded 1.5 per cent growth in a single quarter was a fluke, the bounce still confirms that Germany’s five years of austerity, wage restraint and painful reforms until 2007 are paying off handsomely.

However, even a leaner and fitter Germany cannot escape all turbulences unscathed. Oil prices and the euro exchange rate have now surged beyond all tolerable levels. The super-euro will, over time, divert investment and jobs to cheaper climes. Sky-high oil prices could raise the country’s energy import bill by an additional 1.5 per cent of gross domestic product. As a result, the economy could soon stall for a while.