The rest of Europe shouldn’t look to Germany as an economic savior
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As France continues to stagnate economically because of socialism and high taxes, and Italy falls back into an increasingly worrying recession, the international community is often looking to Germany as a savior for the Euro. With Portugal and Greece struggling to stay on their feet, it’s common to hear economists preaching about how the south of Europe could learn a lot on public debt and governance from their German neighbors.
As France continues to stagnate economically because of socialism and high taxes, and Italy falls back into an increasingly worrying recession, the international community is often looking to Germany as a savior for the Euro. With Portugal and Greece struggling to stay on their feet, it’s common to hear economists preaching about how the south of Europe could learn a lot on public debt and governance from their German neighbors.
The reason for this is obvious, Germany possesses the highest GDP in the EU with $3.6 trillion. That’s almost a trillion more than France, the second in line. The country also has the best growth amongst the biggest economies in Europe, including the UK and France, seeing a rise in GDP of over 8% since 2009. Germany has:
* Created over 1.2 million new jobs
* Achieved a surplus in their budget of 0.4% GDP
* Established some of the leading companies in the world
* Accomplished an unemployment rate of 5.2%
The country certainly stands out amongst the EU, showing a shining performance. Even youth unemployment, showing the jobless rate for individuals aged between 15 and 24, is the lowest in Europe.
But Germany still does not pay for its own self-defense with America paying for much of this.
The Hidden Problems Behind the Stability
Although, on the surface, there is a lot of evidence to Germany’s economic health and stability, positive headline figures may be disrupting more realistic interpretations for the country. According to various sources, Germany has always sought out a closeness with Russia. Russia is a country that is attacking and killing its neighbors. Germany, that does not make sense!
Political issues aside, this is understandable, considering the strength that can come with obtaining Russia as a trade partner. At this point, Russia is Germany’s eleventh largest market for exports, and it also accounts for much of Germany’s oil, coal, and gas imports.
Germany Depends on an Immoral Country to Survive
The sanctions that were recently imposed by the European Union as a result of the conflict between Russia and the Ukraine have begun to show marks, and the latest data shows the confidence among German investors began to fall in August. As a result, Europe’s most impressive economy has fallen to a stand-still.
The sanctions have introduced significant implications for the exports Germany makes to Russia, and with investor confidence, as well as consumer confidence, declining, the economic impact could become devastating. The concern becomes more obvious with consideration of the unemployment rate currently in Germany, which has unexpectedly increased, and wages have not risen enough to sustain the economic activity. Effectively, Germany’s economy could be balancing on the edge of a recession.
Just think where they would be if they supported NATO like they should! It would be even worse!
An immense deal of Germany’s economic strength comes from its exports, yet the weakness that the euro has seen as a result of the Eurozone crisis has begun to cheapen German exports, which is hurting other European countries. Contrary to what perception may indicate, Germany’s strong exports highlight a weakness, as the country does not invest enough, with levels representing only 17% of its GDP. This means that even countries which are struggling more are investing at greater levels.
Europe is in trouble.
