Is Germany on the Brink of Economic Ruin?
For years Germany has been the beacon of hope for the failing eurozone. Germany has long been an economic powerhouse driven by solid growth, consumer confidence and growing demand. However, times they are a changing; Germany is now feeling the pressures just like everyone else, and the economic data is none too flattering. For starters, industrial production figures in Germany have fallen to zero. Add to that declining consumer confidence and it’s clear why the economic bigwigs are deeply concerned about Europe’s number one economy.
Germany Not Immune to Failure
Germany is no longer immune to the economic slowdown that has gripped the global economy. A substantial allocation of Europe’s wealth is generated in Germany and a slowdown does not bode well for the region. In much the same way as the China slowdown is catastrophic for emerging market economies, Germany’s frail economy is starting to rub off onto its neighbours. Several European nations have failed to right the wrongs in their economies, including Spain, Greece and Italy, and for those reasons Germany is an invaluable component of any economic recovery that the region needs to go through.
China Weakness and Migrant Demands Weighing Heavily on Economy
One of the countries that will be heavily impacted by a collapse in Germany will be the United Kingdom. The other is China. Plunging demand is a characteristic of too many G-10 economies, and with China staring down a barrel there are real concerns that the region and the world could soon be heading towards another protracted recession. The French economy is heavily dependent on Germany, and a poorly performing German economy will pulverize the ailing French economy. And once again, China is at the heart of the problem: Weak Chinese demand for EM country exports is crippling Germany’s economic prospects with these very nations. Add to that the economic burden of millions of migrants, and it’s not a rosy picture at all.