GDP Surges 2.2 Percent
Greatest Economic Boom Since German Reunification
Germany just posted its strongest quarter of economic growth since reunification in 1990. During the second quarter, an exports boom, increased consumption and government stimulus helped the country chalk up growth of 2.2 percent.
Buoyed by a surge in exports and continuing government stimulus programs, Germany's economy is recovering at a faster pace than most economists expected. During the second quarter, gross domestic product increased by 2.2 percent on the previous quarter, the Federal Statistical Office in Wiesbaden announced on Friday, marking the largest quarterly economic growth since the country's reunification in 1990. morebut...
Was Germany's Monster GDP Number The Worst Possible News For The Eurozone?
Joe Weisenthal | Aug. 13, 2010, 6:14 AM
Germany has reported blistering GDP, and for awhile that seemed to give a lift to Europe, but is it good news?
In a sense, it clearly re-emphasizes the fears from a few months ago: that the eurozone doesn't make sense.
This news comes a day after Greece reported GDP that was worse than expected. It's obvious that when it comes to currency and monetary policy, the interests of Germany and the periphery could not be further apart.
Analysts are talking about this question today.
CNBC (via @alea_)
"Clearly these figures highlight the story of the year, Greece and Ireland are struggling, Germany and France are doing well," Guillaume Salomon, a fixed income strategist at TD Securities, said.
"The nightmare scenario is a massive slowdown in both core and peripheral but we do not expect that to be the case," Salomon said. "Before the euro was launched, the smaller nations could have devalued their way to greater productivity, they can do this no longer." more
Greece's economy deeper in recession than forecast
• Second-quarter GDP in Greece estimated to have fallen by 3.5% year-on-year
• Record jump in Greek unemployment prompts that crisis could intensify social unrest
guardian.co.uk, Thursday 12 August 2010 15.03 BST
The economic crisis in Greece has led to widespread protests, including clashes between demonstrators and riot police. Photograph: Louisa Gouliamaki/AFP/Getty Images
Greece's recession deepened more than expected in the second quarter of 2010 after the country was rocked by its financial crisis and a series of government measures to slash public debt.
Investment dropped and public spending slumped in the three months to June as Greek politicians battled to regain the confidence of financial markets and meet the conditions of a multibillion-euro bailout from the European Union and International Monetary Fund.
There was also a fresh warning sign that the economic crisis could further intensify social unrest, after a record jump in unemployment. The crisis has already led to widespread industrial action and public protests.
With the fiscal squeeze only just starting, Greece is expected to remain mired in recession for the rest of this year. moreHow do the Germans do it? See the Prime Minister pitch some classic strategies of Industrial Capitalism.
Creating Order in the Euro Zone
Merkel's Rules for Bankruptcy
By Christian Reiermann
Fearing a lasting burden on taxpayers, the German government is preparing a set of insolvency rules for countries in the euro zone. It would require private investors to bear some of the financial burden and force the affected countries to give up some sovereignty. The plan is guaranteed to meet with resistance.
As a physicist and an avowed admirer of the Swabian housewife, German Chancellor Angela Merkel, leader of the center-right Christian Democrats (CDU), is seeking to establish binding rules in the midst of the chaos of financial and monetary crises. Her desire for order was reinforced recently when the prospect of Greece collapsing under a mountain of debt triggered turmoil in the European Monetary Union.
The first national bankruptcy on European soil in decades was only prevented because the remaining countries in the euro zone came to the aid of their faltering fellow member with billions in loans and loan guarantees. The chancellor, determined not to allow the Greek debacle to be repeated elsewhere, proposed the establishment of a procedure to ensure "orderly national bankruptcies." The German chancellor hoped that the plan would create "an important incentive for the euro-zone members to keep their budgets under control."
Finance Minister Wolfgang Schäuble, in complete agreement with Merkel, said: "We have to think about how, in an extreme situation, member states could become insolvent in an orderly fashion without threatening the euro zone as a whole." moreAnd then there is the idea that bank managers who had to be bailed out by the taxpayers would be barred from being paid bonuses forever. Translation of Frankfurt Allgemeine Zeitung below by Google.
Lesson from the financial crisis
Bank managers bonuses are deleted permanently
Bank managers will lose entitlement to bonus payments finally, if you bank by the government or the industry must be supported. The Union and the FDP have agreed to inform the FAZ.
By Joachim Jahn 05 August 2010
The scheme is to be subsequently incorporated in a just law that entered into force, with the compensation structures in banks and insurance companies were regulated. "Salary excesses no longer at public expense" is the motto for this work order, which the FDP-rapporteurs for the amendment, Björn singers, has sent in the order of both factions to Federal Finance Minister Wolfgang Schäuble (CDU) and Justice Minister Sabine Leutheusser-Schnarrenberger (FDP). more