There is little the German media and political establishment takes more seriously than a thumping academic study. The reports on Germany’s economy compiled by the country’s “five wise men” - in fact four male and one female academic economists - that command front-page headlines each year, can easily run to 1,000 pages. But readers of their latest work, published last month, got the message from the title alone: “Success overseas, challenges at home.”

Germany’s economic performance over the past year has had two very different sides. On the one hand, exports have grown strongly. The “five wise men” are forecasting 10 per cent growth for the year as a whole, powered by the strength of the world economic revival. On the other hand, domestic demand has ground almost to a halt. That has resulted in a weak overall economic performance that, while marking an end to the previous three years of stagnation, has dragged down the rest of the eurozone. Gross domestic product is expected to grow by less than 2 per cent in 2004.