On the final straight failed? Merkel playful your economic heritage

Last year, it was a close one: 0.08 percentage points, the German gross domestic product grew in the third quarter, compared to the three months prior to that.

BUSINESS
04 February 2020 Tuesday 12:00
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On the final straight failed? Merkel playful your economic heritage

Last year, it was a close one: 0.08 percentage points, the German gross domestic product grew in the third quarter, compared to the three months prior to that. A Minus would have stood in front of it, it would have been according to the to -0.24 percent from the previous quarter, the first recession in Germany for six years. So the bad news from remained.

but the economic problems in the country: Long years, no one was on the continent, as successful as Germany. No G7 government has grown since Merkel took office in 2005, economically as strong as Germany (see graph). But a year and a half before the Chancellor assigns, crumbling the victory story. Christoph Sackmann development of the GDP.

Germany is strongly Export-focused

In the third quarter of 2019, only the Italian economy grew even slower. All other countries are drawn to Germany by. The United States led the G7-Ranking with a growth rate of 0.52 percent, ahead of Japan (0.45 per cent) and the UK (0.42 per cent). Within the EU, France is now much stronger.

What were until a few years ago the German Strengths, is now to our weaknesses. Because of the strong concentration of the economy on the Export would be. 2019 Germany according to data of the ifo-Institute, for the fourth Time in a row, the world export champion. No country In the balance between export revenue and import expenditure is higher than in Germany.

But world trade is weakening. Because of the now two-year-long trade war between the US and China, the punitive duties from Donald Trump would be first, to impose on goods such as steel and Aluminium, also from Europe, its threats, cars with punitive tariffs and the now finally completed Brexit.

In the Wake of these problems, also suffer from many of the smaller countries. Because China may export less to the USA, the Land produces less and therefore needs less raw materials from third countries. Which the money and/or the necessity to, for example, machines in Germany to buy are missing, then again.

car manufacturers are in crisis

The second strength of Germany has always been focusing on the auto industry. With Volkswagen, we have still the largest car company in the world to selling cars. In addition, two other giants come up with BMW and Daimler. This Trio has a huge suppliers industry depends on the Dax-listed company Continental to smaller companies such as Leoni and Hella. Daimler 42,34 EUR 0,72 (+1,74%) Xetra

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these are huge and for the GDP of important industry is To the rate of data

However, in the crisis. First, they weakened with the exhaust cheating yourself, then diesel bans, the conclusion finally arrived but the change from the internal combustion engine has been completed to the alternative drive systems from electric car to a fuel cell, in other countries faster and better than in Germany.

The politics to Merkel has supported both of these concentrations for years, and encouraged. And she's trying even now, the same mechanisms apply as in 2009. At the time of the financial crisis, it was the famous car scrappage scheme, which should help the car manufacturers. Today, there is an environmental bonus, if customers with electric cars to buy to increase sales. With the SCC-exchange of letters next to values, and in the short term and the long term Top return on investment! (Partner quote) Here is an exclusive 30-day free trial!

Merkel is looking for new markets in Africa

The Chancellor himself is trying to open up new markets for German industry. She's cross-eyed in the process, especially to Africa. There have made in the past years, Chinese companies broadly, however, the continent offers a huge potential. The 54 States of the African Union have done to a free-trade zone after the EU model. The population is young and willing to work.

But cooperation run slow. The Merkel Initiative "Compact with Africa", which aims to promote investment by German company to date has been mostly in the Sands. This is also due to the fact that for German companies the most attractive African countries for example Nigeria, to participate in it. Other countries, such as Benin or Togo are too small to invest to worthwhile.

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floor of the 5G-Expansion burdened the economy

In the domestic economy fails to progress currently, mainly due to the lack of digitisation in the country. With the new mobile radio standard 5G it would be a new Chance to attack. Necessary for a rapid Expansion of the technology would be. Now other countries of the Chancellor's throw of the stick between the legs. Particularly the discussion on the Chinese equipment supplier Huawei is problematic. Clearly, Merkel is not a Chinese spy in the German mobile radio networks wants to, but so far still no proof.

And while other countries shut out Huawei, stressed Angela Merkel last, it does not intend to do. However, the discussion hindered the Expansion. The German Provider Telekom and Vodafone complained recently, that would cost years and billions of Euros.

So little Great it seems in the last full year of the Chancellor to do on the economic front. 2021 Merkel remains only up to the summer break, time for reform. Then the election campaign and self-starts when the CDU will be victorious, will be a other then for Germany's economy. CDU-Chef Annegret Kramp-Karrenbauer want to introduce you to the end of the year, a kind of shadow Cabinet, but allegedly also Friedrich Merz is expected to throw his hat in the Ring.

With him would be clear where the path went. Merz is regarded as a major economic friend. Low taxes for companies and less social benefits would then be fashionable.

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