"Euro crisis slipping away from politicians" was the recent headline in the Financial Times Deutschland (FTD). Greece is putting the international community to the test. Once again. And the euro rescue package is also controversial within Germany.
Opponents in politics and business argue that Germany could also fall into the maelstrom of debt. However, German citizens are currently hardly impressed by such messages. They believe in themselves, in Germany, in consumption. Will it stay that way?
According to the Society for Consumer Research (GFK), there are currently no signs of a change of heart. Last year, Germany completely decoupled itself from the rest of Europe, where the economic crisis led to high inflation in many cases. In the UK, for example, inflation rose from 3.3 to 4.4 percent between November 2010 and February 2011, while in Germany it is currently averaging 2.4 percent. However, prices for energy and food are also rising here.
As a result, GfK recorded a slight dip in consumer sentiment in April. Economic and income expectations are falling, but consumption continues unabated despite Fukushima, Tripoli and Athens. Take electrical appliances, for example: Germans spent 12.7 billion euros on them in the first quarter, 6% more than in the previous year.
Germany remains a growth engine
Although economic experts expect growth to slow down in the second quarter, Germany remains the engine of growth among industrialized countries. Experts also assume that the inflation rate will not rise sharply in 2011; the German government is forecasting a moderate 1.4 percent. "All of this should continue to boost consumption and therefore consumer finance in Germany," believes afb board member Jan Ph. Wieners. However, it is not possible at this point in time to predict how the euro crisis will develop and impact.
Is Germany the island of the blessed? Appearances could be deceptive, warns the FTD. It believes that we have simply been lucky so far. German companies entered the crisis with thick financial posters and have therefore emerged from it all the stronger. According to the Federal Statistical Office, the German economy grew by 5.2 percent compared to the first quarter of 2010. The impetus recently came from the domestic economy, in particular from industry and the construction sector.
Although growth is expected to slow in the second quarter according to economic experts, Germany remains the engine of growth among industrialized countries. Experts also assume that the inflation rate will not rise sharply in 2011; the German government is forecasting a moderate 1.4 percent. "All of this should continue to boost consumption and therefore consumer finance in Germany," believes afb board member Jan Ph. Wieners. However, it is not possible at this point in time to predict how the euro crisis will develop and impact.
