My name is no
My sign is no
My number is no
You need to let it go
Debt relief is no
German stimulus is no
ECB easing is no
You need to let it go
German Finance Minister Schaeuble appears to have taken on a new role: chief obstructionist. Schaeuble seems to be reveling in the fact that due to Chancellor Merkel’s immigration stance, and perhaps because of her accommodation of Turkey, her public support has fallen below his.
Germany often encourages much jealous muttering. The country found an easier path than most through the global financial crisis and it is now even touted as the world’s best nation (at least according to one survey). Besides stellar engineering and economic efficiency, the German model also stands for social equity. This “social market economy”, however, is increasingly put into question by the looming spectre of old age poverty.
Greek Prime Minister Tsipras is celebrating the one-year anniversary of his election. He offered Greek voters an opportunity to replace him last summer, but they stuck with him.
Many economic issues remain unresolved. Pension reform promises to be a flashpoint between the Tsipras government and the official creditors. Although the G10 has eleven members, official creditors are no longer represented by the Troika, as there are now four. The ESM has joined the EC, ECB and IMF.
Chancellor Angela Merkel’s popularity wanes, as many Germans grow weary of asylum seekers flowing into the country. The government plans to accept up to one million refugees for the year, and the government has no official cap on the number of people allowed inside. According to the Bertelsmann Foundation, Germany will need 500,000 new arrivals a year until 2050 to counter a plummeting labor pool. Germany’s population will contract 15 percent by the time 2050 arrives, and the workforce will drop 30 percent.
Chancellor Angela Merkel and members of Germany’s business community seek to integrate masses of people coming from parts of the Middle East and Africa into German society, according to the New York Times. Germany expects 800,000 refugees and migrants for 2015, but some analysts expect one million. Germany has temporarily closed its southern border to stem the overwhelming tide of people flowing into the country.
Despite the troubled waters of the world economy, Germany continues to outperform its fellow EU nations, with consumer confidence, exports and public financing all on the rise. German GDP grew 0.4 percent in Q2, a rise from 0.3 percent from the previous quarter.
While the euro has increased in value over the last year, news of financial troubles for Greece have led to heavy fluctuation in its value over the last six months. The trend toward a weaker euro may be bad news for other European nations, but may actually boost the German economy.
According to the International Monetary Fund (IMF), a weak euro and lower energy prices are actually supporting the German economy. This support, in turn, has given Germany the opportunity to bolster medium-term growth and reduce external imbalances, said the IMF.
According to a report released from the German central bank, the economy has been bolstered by such factors low unemployment and a weaker euro. Germany expects GDP growth of 1.7 percent in 2015, 1.8 percent growth in 2016 and 1.5 percent growth for 2017. Imports fell 1.9 percent month-on-month, with the trade surplus increasing to a record 22.3 billion euros.
China is the world’s largest exporter. Yet with the exception of the distortions caused by the timing of the Lunar New Year holiday, China’s exports have been falling on a year-over-year basis each month this year (save for February). Earlier today, it reported exports in May were 2.5% lower than a year ago.
It does look like Chinese exports are bottoming out. Export volumes appear to have risen in May, but competitive price cuts lowered the value of its foreign shipments.
Following its recovery from the Global Recession, Germany has often led the Eurozone in economic recovery indicators. This week, Germany’s central bank, the Bundesbank, improved its own estimate for the German economy for 2015 and beyond thanks to the nation’s continuing record low unemployment and a stronger Euro.
The German central bank now predicts gross domestic product (GDP) to expand by 1.7 percent by the end of 2015, and 1.8 percent by the end of 2016. In December, the Bundesbank had predicted growth of just 1 percent for 2015 and 1.6 percent for 2016.
