Welcome Guest   |  Login   |   Signup
JG Logo
Sat, May 26, 2012
Archive Search

As German Beast Awakens, So Does Grumbling
July 25, 2010

Share This Page
0
0
0
0
Share with google+ :


Post a comment
Please login to post comment

Comments

Be the first to write your opinion!

Germany’s economy is fast returning to health, but thanks mainly to exports, leaving Chancellor Angela Merkel open to a fresh barrage of criticism from other countries, economists say.

On Friday the closely watched Institute for Economic Research survey of about 2,500 companies showed sentiment in Europe’s biggest economy surging at its strongest rate since the reunification of East and West Germany in 1990.

Jennifer McKeown at Capital Economics said this suggested that the German economy was performing well, “not only compared with others in the euro zone but with the rest of the world.”

Timo Klein at Global Insight agreed, saying that a breakdown of the survey showed “large improvements” in business sentiment across the board, with all sectors except construction raising expectations.

“This rapid rebound following the euro-zone debt and euro crisis is remarkable,” Klein said.

It mirrored Thursday’s rise in the German Purchasing Managers Index and upbeat comments from German companies in recent weeks.

But the rebound is thanks in large part to Germany’s export prowess, something that has been a bone of contention between Berlin and its international partners, not least the United States and France.

And it is not the only issue that has pushed Merkel into the firing line since the global economy came close to collapse in late 2008.

She was dubbed “Madame Non” in some European circles for her perceived slowness in launching a stimulus package for Germany and for foot-dragging over rescue package for Greece and the euro zone.

Critics say that Germany’s current account surplus — exporting more than it imports — destabilizes the global economy, and that Merkel should get German consumers into the shops buying other nations’ exports.

“Unless a German domestic demand revival starts soon, which seems unlikely given the coming fiscal squeeze, the positive effect on the rest of the euro zone will be limited,” Capital Economics’ McKeown said.

Moreover, less spectacular recoveries elsewhere could mean that Germany might even take a greater share of the global exports than before the crisis — at expense of other countries, McKeown said. 


Agence France-Presse