German growth slows as Europe’s debt woes linger
Kai Ryssdal: There’s the news of the day to digest. French President Nicolas Sarkozy and German Chancellor Angela Merkel had a little tete-a-tete in Paris today. Yet another session about how to rein in the European debt crisis. And not just for the heck of it — how to get the Eurozone growing again.
We learned today the German economy — the continent’s biggest — came to a screeching halt last quarter. From London, Christopher Werth reports.
Christopher Werth: Germany is Europe’s biggest economy, but how big?
Hendrik Koenig: It’s pretty big.
Hendrik Koenig is with Metzler Equity Research in Frankfurt.
Koenig: The German economy accounts for around 25 percent of the Eurozone GDP.
Until now, Germany has been the powerhouse of economic recovery among the 17 countries in the Eurozone. But in the last quarter, domestic consumption fell, energy production slumped after the government decided to shut down eight nuclear power plants, and imports have risen faster than exports.
Carsten Brzeski, an economist at ING in Brussels, says this is not good news.
Carsten Brzeski: With the slowdown now, it really shows that even the power engine is losing steam.
And he says that could have implications for how Europe manages its current debt crisis. As Europe’s largest economy, Germany has coughed up the bulk of the money used to bail out Greece, Ireland and Portugal. But who will ride to the rescue if a slowing economy means Germany can no longer go on footing the bill? And how long will the patience of Germany’s taxpayers last?
Brzeski: If people start to actually feel it in their pockets, then I think that support from the German public for more German taxpayers’ money to other countries will weaken.
However, he says these slower growth figures are more a return to earth from higher growth figures in Germany over the past couple of years, and not the return of recession.
In London, I’m Christopher Werth for Marketplace.
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