The most startling statistic is how last year’s bounty was shared between shareholders and workers. Wages went up by 1.3 per cent in real terms – after a 0.7 per cent decline in 2005. But profits went up by an incredible 6.9 per cent in 2006, and this after a 6.2 per cent rise in 2005. Since 2000, we have observed a large structural shift in favour of profits. During the 1990s, there were years in which wages grew much faster than profits, and vice versa. While the distribution between profits and wages was always volatile, at least it was mean-reverting over long periods. The current shift towards profits has been both unusually large and persistent.

This is good news for investors and bad news for German workers. But is it bad news for the German economy? One argument is that Germany entered monetary union at an overvalued exchange rate and has since improved its relative competitiveness. If this view were correct, one would expect the labour/profit share to return to mean-reverting behaviour. I doubt that this is going to happen soon.

That profit 'sharing' and the weakness of consumption have nothing to do with Germany's weak growth, of course, and should not be corrected.