At least some of Germany's "recovery" may have been achieved at the expense of peripheral eurozone nations such as Italy, Ireland and Spain. In characteristically disciplined manner, Germany has used the downturn to make its industries more competitive, with real reductions in wages. Prior to the introduction of the euro, this enhanced competitiveness would have been countered by a stronger currency, but today there is no such relief mechanism. Germany has been free-riding on the back of a system of fixed exchange rates, which makes its own economy ever more competitive against its enfeebled, debt-fuelled neighbours. These tensions are by no means specific to the eurozone – they are symbolic of a wider divide between surplus and deficit nations underpinned by currency pegs. The trade and capital imbalances this generates are a root cause of the present crisis, yet little attempt is being made to correct them.