Germany OK in tough European holiday season
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Germany OK in tough European holiday season
Bob Moon: Here’s my nomination for the “understatement of 2011”: It’s been a tough year for Europe. The debt crisis, downgrades and decreased spending might be crimping the holiday cheer in many of the euro nations. But in Germany, which enjoys the continent’s strongest economy, consumers seem to be in a buoyant mood.
Christopher Werth has been checking out the scene in Hamburg.
Christopher Werth: Germany’s traditional Christmas markets are famous throughout Europe, with sparkling lights, hot, mulled wine, and sure, a few drunken carolers. While places Britain and Greece suffer austerity, shoppers here are spending as much as ever. People like Hamburg resident Joerg Bock.
Joerg Bock: Sure people in Germany have to pay for the crisis with our tax. But I don’t feel the crisis, and I hope that I don’t feel the crisis.
This year consumers are spending more in Germany. And that’s benefiting traders like jewelry shop owner Tsipi Lev.
Tsipi Lev: It’s much more better this year. You know Germany is a very, very rich country. And the people here have a lot of money.
And Germans are expected to spend more of it this Christmas than their European neighbors.
Frederick Frejus says his stall selling housewares is doing much better than the one he runs back home in France.
Frederick Frejus: Germany is stronger than France. In Germany you have a lot of factory. It’s a country, which produce many things.
Unemployment in Germany is currently at a record low of 5.5 percent, or half the European average. That’s another reason German’s are spending freely, says Christian Schulz, a senior economist at Berenberg Bank.
Christian Shulz: Germans think that they deserve to spend more because they’ve really tightened belts earlier in the decade.
And the idea that Germans are starting to consume goods almost as eagerly as they export them is welcome news to Germany’s trading partners. Not least the U.S., which has urged Germany to consume more. Again, Christian Schulz:
Schulz: It’s not going to boost American GDP immediately, but over the long term Germany will import more goods. And that will benefit America just as it will many other countries.
And American retailers doing business here should do better as well. Germany can be a tough market to win over. And some U.S.-owned stores like Walmart and the Gap even threw in the towel here a few years ago.
But Natalie Berg of research company, Planet Retail, says things are starting to turn around.
Natalie Berg: What we are seeing now is some retailers are taking a renewed interest in the German market. So we had Abercrombie & Fitch open their first store in Dusseldorf earlier this year. And we’re even hearing that the Gap could be interested in re-entering Germany.
Back at the Christmas market, the crowds are full and the traders busy. But as Europeans have learned, good times don’t last forever. Sure German unemployment is low right now, but the crisis in the rest of Europe could still hit Germany’s exports when the cheer of Christmas gives way to the cold hard light of the New Year.
In Hamburg, I’m Christopher Werth for Marketplace.
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