As the economies of so many countries in Europe have hit the skids one country has been portrayed as invincible. Germany has appeared as the prudent traditional housewife of Europe watching the cents in order to protect the Euros. Her Economy has gone from strength to strength and to date Germany has been holding the purse strings as far as EU bail outs go. This has led to German Chancellor Angela Merkel seeming cold and unfeeling as she lays more restrictive measures on the people of Greece and beyond.
Now it seems all may not be as economoically sound in Germany as once thought.
Frau Merkel is facing an election in Germany in 2013. We have seen so many other countries go to the polls in recent months. Most who have been experiencing poor economic figures and high unemployment have responded by voting in to office a new regime. Labour or Socilaist governments have been toppled and replaced with Conservative or right wing politicians. In France the reverse happened when Nicolas Sarkozy, a right wing leader, was toppled by Hollande for the left.
All of this means that Frau Merkel will have one eye on the polls as she negotiates and tries to balance the books.
The latest predictions on the German economy come by way of "German think Tanks".It seems that a prediction of a possible 2% growth in the German economy in 2013 may have been overly generous. The figure has been revised down to 1%. Still better than many countries that are looking at the possibility of negative growth but not good for Germany and its people.
There will be Germans alive today who well remember the recession in the early part of the 20th Century. The one that led to global conflict and poverty for many. In the end paper money was worthless and there remain images of cart loads of worthless bank notes being dragged around.
For most of us ordinary citizens the EU economic crisis is confusing. Here is some information on the latest news, found at the BBC,
Last month the ECB unveiled plans to buy up the government debts of struggling eurozone members, but only if those governments first signed up to a rescue package, including strict conditions on cutting their overspending and reforming their economies.
"This process could be triggered by the ECB effectively providing monetary financing for states," according to the semi-annual report by the four think tanks, Ifo in Munich, IFW in Kiel, IWH in Halle and RWI in Essen.
"Europe's citizens and players in the markets may lose trust in the ECB's ability to ensure long-term price stability as a result.
"In the longer term there is a great danger that the ECB will continue to purchase bonds and provide excessive monetary policy stimulation even if states deviate from the adjustment programmes, which could drive up prices and lead to an increase in inflation expectations." The four also cut their forecast for German growth this year to 0.8% from 0.9% previously.
Purchasing these debts though could lead to a whole range of problems. Inflation could rise. Money become vitually worthless and so on. The fortunes of Germany and its people depend on the rest of Europe. The Domino effect could still catch Germany out. Currently they have a 20-year record low rate of employment of 6.2%. It is predicted that next year this could increase to 6.8%. Not high compared to many European countries but a worry for Merkel and her government.
The EU community means that too many countries rely heavily on each other. No matter how good one countries budgeting is the economy could fail at the hands of devil may care policies of another country. Sheer madness.
Commenting on the assumption that the German government will balance the books in 2013 the "think Tank" had this to say,
"This assessment of the German economy is based on the assumption that the situation in the eurozone gradually stabilises over the forecasting period and that confidence, especially on the part of investors, is restored," the report warned. "Should the situation in the eurozone continue to deteriorate, this will also impact the German economy. Over the forecasting period as a whole the downside risks prevail and there is a great danger that Germany will fall into a recession."
As we said, Sheer Madness.
Now it seems all may not be as economoically sound in Germany as once thought.
Frau Merkel is facing an election in Germany in 2013. We have seen so many other countries go to the polls in recent months. Most who have been experiencing poor economic figures and high unemployment have responded by voting in to office a new regime. Labour or Socilaist governments have been toppled and replaced with Conservative or right wing politicians. In France the reverse happened when Nicolas Sarkozy, a right wing leader, was toppled by Hollande for the left.
All of this means that Frau Merkel will have one eye on the polls as she negotiates and tries to balance the books.
The latest predictions on the German economy come by way of "German think Tanks".It seems that a prediction of a possible 2% growth in the German economy in 2013 may have been overly generous. The figure has been revised down to 1%. Still better than many countries that are looking at the possibility of negative growth but not good for Germany and its people.
There will be Germans alive today who well remember the recession in the early part of the 20th Century. The one that led to global conflict and poverty for many. In the end paper money was worthless and there remain images of cart loads of worthless bank notes being dragged around.
For most of us ordinary citizens the EU economic crisis is confusing. Here is some information on the latest news, found at the BBC,
Last month the ECB unveiled plans to buy up the government debts of struggling eurozone members, but only if those governments first signed up to a rescue package, including strict conditions on cutting their overspending and reforming their economies.
"This process could be triggered by the ECB effectively providing monetary financing for states," according to the semi-annual report by the four think tanks, Ifo in Munich, IFW in Kiel, IWH in Halle and RWI in Essen.
"Europe's citizens and players in the markets may lose trust in the ECB's ability to ensure long-term price stability as a result.
"In the longer term there is a great danger that the ECB will continue to purchase bonds and provide excessive monetary policy stimulation even if states deviate from the adjustment programmes, which could drive up prices and lead to an increase in inflation expectations." The four also cut their forecast for German growth this year to 0.8% from 0.9% previously.
Purchasing these debts though could lead to a whole range of problems. Inflation could rise. Money become vitually worthless and so on. The fortunes of Germany and its people depend on the rest of Europe. The Domino effect could still catch Germany out. Currently they have a 20-year record low rate of employment of 6.2%. It is predicted that next year this could increase to 6.8%. Not high compared to many European countries but a worry for Merkel and her government.
The EU community means that too many countries rely heavily on each other. No matter how good one countries budgeting is the economy could fail at the hands of devil may care policies of another country. Sheer madness.
Commenting on the assumption that the German government will balance the books in 2013 the "think Tank" had this to say,
"This assessment of the German economy is based on the assumption that the situation in the eurozone gradually stabilises over the forecasting period and that confidence, especially on the part of investors, is restored," the report warned. "Should the situation in the eurozone continue to deteriorate, this will also impact the German economy. Over the forecasting period as a whole the downside risks prevail and there is a great danger that Germany will fall into a recession."
As we said, Sheer Madness.
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