Peripheral austerity hurts German exports

Germany exports GDP

Signs of alert are breaking over the German powerhouse being hit by the slow but sure decline of the demand from countries in the eurozone periphery. In November, from which the latest data has been collected, Germany’s export sales suffered the highest fall so far in 2012 with -3.4 percent.

In fact, national GDP is expected to contract, even if very slightly–by -0.2 percent– in the fourth quarter of 2012. Market analysts said poor foreign sales could be one of the main causes. Industrial new orders fell -0.8 percent year on year, and investment in capital goods contracted by -4.8 percent.

“The declarations of the German Chancellor Angela Merkel that were leaked yesterday about closing up Europe’s phase of restructuring sends a clear message,” Link Securities said Wednesday in a report to investors in Madrid, “Germany’s government has now proof that the country’s economy isn’t immune to the crisis affecting the economies in the south of Europe.” Link experts believe Berlin could this year support expansion policies so data improves “ahead of the elections in the second half of  the 2013.”

Fund managers also voiced their hope that stock markets will better their performance in the new year. The eurozone economic sentiment index was in December up to 87 points from 85.7 in November. Germany’s trade balance registered that month a €17 billion surplus, above market expectations of €15.8 billion. Numbers behind the headline, though, tell a story of looming crisis.

About the Author

Victor Jimenez
London contributor at, reporting about the City and the Eurozone economies. He regularly writes for Spanish newspaper group Prensa Ibérica--some of his features include shared work with journalists of The Daily Telegraph and the BBC.

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