Germany’s Data Questions its Austerity Policy

Distortions also exaggerate the manufacturing figures after a late-falling summer holidays in some German states kept factories shut for longer.

Still, criticism of Berlin’s economic policy is going to intensify. As Nobel prize-winning economist Joseph Stiglitz wrote last month, Berlin is wrecking its own economy and the rest of eurozone’s with an austerity project that is divisive and creates widespread poverty. He said: “Germany is forcing other countries to follow policies that are weakening their economies – and their democracies.

Even business leaders are becoming restless. “We are no longer growing,” said Volker Treier, chief economist at the German Chambers of Commerce and Industry. “We have had too little investment in Germany for years now.”

Carsten Brzeski, an economist at ING, put the problem succinctly. He said: “No more Sommermaerchen (summer fairy tale) but rather a German summer horror story.”

Will Schäuble reverse years of austerity and start to spend some of Germany’s export earnings? Will he support increased spending on the country’s decaying infrastructure and support job-creation for a growing underclass? It doesn’t seem likely given his consistently hardline comments. Only the German parliament can save the day.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza