Germany’s biggest carmaker and its biggest bank are both undergoing tectonic shifts which could shake the country’s strong economic foundations.
With the impact of the emissions scandal on Volkswagen, one of the country’s biggest employers, still unknown, and close to 4,000 job losses expected at Deutsche Bank in Germany, as it undergoes a high-profile restructuring, dents may emerge in Germany’s apparently iron-clad economic strength.
Export figures, where much of that strength is located, were already starting to turn even before the Volkswagen scare. In August, exports recorded their biggest fall in six years, as trading partners in emerging markets cut orders. While the month is traditionally weak, the fall of 5.2 percent was larger than forecast.
German businesses and consumers were less optimistic about the economy in October than September, according to a survey by the European Commission published last week.
Later this week, German factory orders data should give some clues as to whether Volkswagen’s problems are affecting overall manufacturing yet.
The country’s much-prized political stability, in a post-credit crisis era when many other major European powers have seen rising support for less centrist parties, has also been questioned.