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Stalled German economy will hurt euro
German Chancellor Angela Merkel
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TEXT OF STORY
Bill Radke: The economic engine of Europe has run out of steam. Figures just released show the German recovery has stalled. Marketplace's Europe correspondent, Stephen Beard, has our story.
Stephen Beard: Europe's powerhouse helped pull the rest of the eurozone out of recession in the first half of last year. But the German economy stagnated in the last quarter. The end of the cash for clunkers scheme hit demand at home, and exports failed to pick up the slack. Germany's now suffering from Chinese competition.
Germany's weakness is casting a pall over the rest of the eurozone, and that, says Charles Dumas of Lombard Street Research, means more trouble for the single currency.
Charles Dumas: The euro economy is feeble and I would be expecting investors in euroland to be trying to get their capital out into places where there are rather better prospects. And of course, that will bring down the euro.
He says the Germans have made matters worse for themselves and the euro by insisting on big cuts in public spending in Greece and other southern European countries. He says that will further undermine demand for German goods.
In London, this is Stephen Beard for Marketplace.
Unfortunately, the German economy is now exporting "deflation" to the rest of the Eurozone. The chicken is coming home to roost. Germans are "stress haben" now because this was just a UK- American problem in 2007. Schade...The German economy is exposiing its weaknesses. Poor demographics, irriversible birth rates, brain drain, 1/2 the country on Hartz IV, export-only & no consumersim, Cant fire employees, insolvencies rising to an all time high, bank which are structurally bankrupt, unemployment rising, fear of foreigners, etc. Expect this "German" saga to be played out by year end as they are forced to bail out Greece. Spain will be the back breaker. Its not looking good for the Germans...Economically, politically, they are ineffective.
Hey Stephen, it's true that Germany got a -2,4 the last quarter. This could affect the Euro. What about the -3,2 that UK got? Could this affect the British Pound in any way? -- Concerning the Euro you should not forget that the French economy grew 0,6 points last quarter, three times more than the previous.
