Useful Economics for a quick glance

Size of economy:

Germany: The economy was worth £1.7trillion at the end of 2007, making it Europe's biggest. Per head of population, its gross domestic product is £20,731. The Organisation for Economic Co-operation and Development expects Germany's economy to contract by 0.8 per cent next year, and rebound by a modest 1.2 per cent in 2010.

UK: National output was £;1.4trillion last year, or £22,950 per head. The OECD is predicting the deepest recession of any Group of Seven nation next year, with a 1.1 per cent dive in GDP. The recovery will be 0.9 per cent in 2010

Economic breakdown

Germany: World's champion exporter, beating even China and Japan. Industry makes up nearly a quarter of its economy, while services are about 60 per cent. Construction is a relatively modest 3.6 per cent.

UK: Industry comprises 18 per cent of the economy, but this is significantly bolstered by North Sea oil. Services including banks, insurance and retail, are three-quarters of output. Construction is 6 per cent.

Population

Germany: Europe's most populous nation but official projections suggest this will not always be the case. Its 82million headcount is expected to shrink by 12million by 2060 because of low birthrate.

UK: Currently 61million, but likely to reach 77million by 2060 - overtaking Germany - because of a high birth rate and continued immigration.

Fiscal stimulus

Germany: Berlin has been attacked across Europe because of its apparent reluctance to cut taxes and lift public spending to support the economy. The fiscal stimulus is most commonly calculated at £10billion, or around 0.5 per cent of GDP, but if measures adopted back in October are included, the boost rises to 1.3 per cent of GDP - more than Britain's.

UK: Gordon Brown's fiscal measures, including the VAT cut announced last month, amount to around £20billion, or 1 per cent of GDP.

Unemployment

Germany: At 7.1 per cent, joblessness has been a scourge for years not least because of East Germany's post-communist hangover.

UK: Has been enjoying a resilient jobs market, with near-record levels of employment, but there are fears the good times are over. Unemployment stood at 5.8 per cent in September but OECD forecasts suggest it could reach 8.2 per cent by 2010.

Public debt

Germany: Has been relatively high for decades, currently standing at an alarming 65 per cent of GDP or £1.1trillion. This helps to explain why the government of Chancellor Angela Merkel is so anxious to reduce the burden on the economy.

UK: Relatively low compared with many other European nations. But at 44 per cent of output, or £616billion, gross debt is still a worry and is set to grow.

Public spending

Germany: Despite its reputation for bloated government, Germany's public spending actually consumes a slightly smaller share of the economy than in Britain, at 43.8 per cent of GDP last year.

UK: Public spending has been soaring under Labour, though the Treasury's latest plans envisage a sharp slowdown in growth. Spending was 44.4 per cent of GDP last year.

Tax take

Germany: Roughly comparable with that of the UK, at nearly 44 per cent of GDP. Its top rate of income tax is 45pc, but there are additional levies.

UK: Government revenue amounts to 42pc of GDP, or nearly £550billion according to latest figures. Following the Pre-Budget Report the UK is introducing a new 45pc top rate of tax, putting it in a similar position to Germany.

Inflation

Germany: Has been running at half UK rate lately, in part because consumers are sheltered from swingeing increases in utility bills. Inflation rose 2.5 per cent in October.

UK: Inflation is slowing, with some warning of deflation, but it remains high. Inflation was recorded at 4.5 per cent in October.

Interest rates

Germany: Has enjoyed much lower interest rates than Britain until recently. The European Central Bank's main rate currently stands at 2.5 per cent.

UK: The Bank of England has slashed rates aggressively, from a high of 5.75 per cent last year to 2 per cent now. Few economists think this will be the bottom.

Trade balance

Germany: Its world-beating manufacturing sector has ensured Germany runs a comfortable trade surplus. This was recorded at £15billion in October. But with world demand declining sharply, Germany will not be immune from world recession.

UK: Has consistently run trade deficits in recent years as we suck in more goods than we export. The gap stood at £3.9billion in October.

Housing market

Germany: Has been in a state of perpetual stagnation in recent years with property values currently at around £150,000.

UK: Property is Britain's Achilles heel, soaring to hyper-inflated levels in a decade-long surge that ended last year. In November the annual fall was recorded at 16 per cent by Halifax, and few expect the slide to abate soon.

Sources: ONS, OECD, World Bank, Global Insight, Halifax, RICS, Capital Economics, European Commission

From today's Mail on Sunday:

"I would like to outline some key differences between the economies of the two countries.

First, there has been no housing bubble in Germany. Most Germans rent; only one in four owns their own home. The housing ladder is not an issue. A private home has never been seen as a short-term investment, as in the UK.

Second, Germans still like to save. They deposit on average 13 per cent of their disposable incomes with their bank. The individual savings rate in the UK is almost zero.

Third, only one in 20 Germans has and uses a credit card. Fourth, unemployment was falling in Germany until November, whereas the labour market in Britain was already showing clear signs of weakening in the summer.

Fifth, inflation in Germany stood at 2.9 per cent in September, but in the UK it was 5.2 per cent.

Sixth, in 2007 the German economy had a current account surplus of five per cent, compared with a UK deficit of 3.2 per cent.

These differences make clear that the EU was right to leave decisions on specific measures to the member states. Given that similar differences may exist between any two member states, it is not surprising that there should be such a wide range of approaches."