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This article was published on 14 August 2014 at 08:12.
The last change is the 14 August 2014 at 11:17.
The eurozone is in trouble again. Its largest economy, Germany, has recorded a contraction of 0.2% of GDP in the second quarter, worse than expected. Zero growth for France during the same period while Italy, we already know that for a few days is technically back in recession. There is nothing to worry about and there is above all not to believe those who claim to be, at least for Germany, a temporary drop.
The latest indicators (ZEW and Ifo confidence of analysts on Business confidence) point to a further weakening of economic activity in the coming months and the latest data strongly negative orders and industrial production glimpses third quarter highly problematic. To this is added the first concrete effects of the war of economic sanctions in place between Russia and the West. To those who argue that German exports to Russia (36 billion euro last year) they represent “only” 3% of total exports of Germany must remember that now only thin separating decimals, Europe, growth, recession and stagnation. Just a little at this point because of the spiraling crisis of 2011-2012, from which the eurozone was technically released at the end of 2013, to be screwed back. Are alarming figures that should suggest a sense of urgency even Germany, which are again failing two of the most important trading partners, just France and Italy. Even Berlin, therefore, will soon need to reform an economy that continues to live on “income”, ie on the momentum of the reforms of the labor market and welfare enacted in 2004.
The momentum is being lost, and not because, as many analysts argue (German), GDP data for the second quarter suffer from a “comparison effect” with those of the first (+ 0.8%) spoiled by an unusually mild winter that has pushed the construction industry. Given the situation, even to Germany, always generous with advice and recommendations to the economies defaulting on the structural reforms required an extra effort to increase the growth potential and pull itself out of the doldrums and his traveling companions (Italy and France always ). Many they pick on an economic model too unbalanced on the export side, weakness in domestic demand, which feeds a structural imbalance, the focus of the current account. But an accusation is valid only in part.
It is simply idiotic ask Germany to export less because in the German export on the basis of the modern global value chain, there is a lot of made in Italy quality. And it is equally naive to ask the Germans, thrifty by nature and with a worryingly negative demographic trends, to consume more. If you have not done so in the past two years, with interest rates below the 2% wage increases consistent as has not happened for a decade and a regime of almost full employment, when did they do?
We can only hope for a stimulus package targeted public investment. It would be desirable on a European scale, but already a German plan would be a good start. Berlin has a bit of leverage given the excellent state of public finances and has an objective need for modernization of infrastructure, particularly in transport. It is time for Germany to put his hand on the “treasure,” and then, at the same time, their own interests and those of Europe.
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