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New German Economic Miracle Talk, Good For EU …

  • August 14th, 2010
  • Posted by EUEditor

eurosymbol-frankfurt2.jpgClaims of “we can do it” in Europe got a large boost from the strong quarterly growth figures released in Germany on Friday (13.8.10).

Arguments on the part of the European Union that recovery from recession, its banking supports, and the Euro currency, are sustainable, have been greeted with great skepticism this year.

(See EUAustralia Online; “Stop doubting Europe economy”, 4.8.10; “Banking and finance: EC sets out moves …”, 28.5.10; “Europe’s economy: pale Spring dawning …”, 25,5,10; “€750-billion package …”, 10.5.10).

Now, an evident return to strong growth in Germany, at 2.2% and the strongest since the time of the country’s reunification in the early 1990s, has been greeted  some enthusiasm – if commentary carried in major news media is the yardstick.

The Irish Times saw the return to strength, built on the strong-point of the German economy, its export industries, as a good clear run:

“After stuttering dangerously last year, the German economic locomotive has lurched back to life with record growth and is pulling the rest of the euro zone with it”, it said.

“The 2.2 per cent expansion posted for the second three months of the year is the highest quarter-on-quarter growth since West German figures from 1987 and the strongest growth since records began for unified Germany in 1991.

“Within hours Germany’s sober politicians and economists were locked in a war of superlatives: ‘miracle’, ‘XL boom’ and even ‘Superman’.

“’It was the export-oriented industries that experienced the worst collapse during the crisis,’” said Dr Michael Bräuniger of the World Economic Institute (HWWI) in Hamburg on German television. ‘Now these industries – in particular machine-building, chemicals and auto makers – are growing the strongest…’”

“Defying Others, Germany Finds Economic Success”, declared The New York Times.

A dispatch from Bloomberg noted the benefit to Eastern Europe of its new linkages with the German economy, pointing g to an up-turn there:

“East European economies strengthened from a year earlier in the second quarter on increasing demand for their cars and electronic goods in western Europe.

“The Czech Republic, the largest eastern economy to report gross domestic product today, posted 2.2 percent annual growth compared with 1.1 percent in the previous period. Hungary’s GDP expanded 1 percent, after a 0.1 percent increase in the first quarter. Euro-member Slovakia had the fastest growth in the region at 4.6 percent, slowing from 4.8 percent …”

The agency did also note the presentation of data this week showing that Greece’s economy contracted more than forecast, “helping keep bund yields down amid renewed concern about budget shortfalls on Europe’s periphery.”

(A financial inventory by the European central Bank, European Commission and the IMF, did not seem over-perturbed by contraction in Greece, seen as a function of its austerity drive, to be expected; see EUAustralia, “Greece pleases EU ….”, 11.8.10).

Reference

Nicholas Kulish, “Defying Others, Germany Finds Economic Success”, NY Times, 13.8.10. http://www.nytimes.com/2010/08/14/world/europe/14germany.html, (14.8.10).

Peter Laca, “Eastern Europe’s Export-Led Recovery Is Fueled by Germany’s Record Growth”,  Bloomberg, NY, 13.8.10. http://www.bloomberg.com/news/2010-08-13/eastern-europe-s-export-led-recovery-is-fueled-by-germany-s-record-growth.html, (14.8.10).

Derek Scally and Dan O’Brien, “German economy lurches back to life taking euro zone with it”, Irish Times, Dublin, 14.8.10. http://www.irishtimes.com/newspaper/finance/2010/0814/1224276812859.html, (14.8.10).

Anchalee Worrachate, “German 10-Year Bonds Fall After GDP Report Tops Economists’ Forecasts”, Bloomberg, NY, 13.8.10. http://www.bloomberg.com/news/2010-08-13/german-10-year-bonds-fall-after-gdp-report-tops-economists-forecasts.html, (14.8.10).

Picture

Euro sculpture, Frankfurt

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