To me Mr Sinn is "von Sinnen".

Germany has been recognized during the last century as a country with first class engineers and high tech products. That competition from Japan is an economic shock is a misleading argument. It came not as a surprise to Germany. Furthermore, Germany is still one of the most successful exporters in the world.

With the EU enlargement a common market was created. That is of little benefit for a big exporting country. Huh? Is that a joke? And what have the economies of scale to do with that? Were they recently forbidden in big countries?

In my eyes, the third so-called shock is not the dinimishing of a risk premium for foreign currencies (Who would demand 300 BP more from a good government with a strong currency because its name is not Germany?). It rather reflects the German influence on the ECB which has as its primary goal inflation killing. Hence, there are no different inflation premia charged in the economies.

To summarize the arguments behind the fourth and fifth shock: How can the economy that is predetermined to benefit the most from a unification and a EU enlargement lose so badly? For example, in Eastern and Western Germany people speak the same language (hence a faster knowledge diffusion) and a historical and cultural connection was there. Even infrastructure existed. Furthermore, the west was able to provide funds for investments in the east to create a highly competitive industrial nation. What went really wrong? Any suggestions besides the usual suspects (high regulation of the labor market; excessively costly welfare state)?