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Germany’s Economy Wobbles

Updated: Feb 3, 2021

By Jack Turner and Tom Carson

Germany’s Economy Wobbles

The German economy has shown some signs of faltering as of late, as both industrial production and manufacturing orders declined in February. A recent survey has reported that export sales are "falling at rates not seen since the global financial crisis". Indeed, the GDP declined in the third quarter of last year by 0.2% and has struggled to progress since. However, slower-than-hoped growth figures are a characteristic of the Eurozone as a whole. As Germany accounts for 29% of eurozone economic activity, eurozone figures are somewhat contingent on Germany’s economic performance.

Why now? Germany’s economic issue have been largely attributed to limited recovery since the eurozone financial crisis, the knock-on effect of China's economic slowdown, US tariffs on steel and aluminium, and uncertainty surrounding Brexit.

Proposed solutions include to cut taxes or increase spending, which economists believe to be viable due to Germany’s recent tax surpluses. In spite of these fears, however, there is cause for optimism in the job market, as the unemployment rate stands at just 3.1% and continues to decline. There has also been positive expansion in services and construction industries respectively.

Obama and Merkel Meet in Berlin

Obama arrived in Germany on Thursday, addressing an audience of almost 15,000 in Cologne's Lanxess Arena over current US policies on climate change. Chancellor Angela Merkel welcomed former US president Barack Obama to her office in Berlin on Friday during his second trip to Germany since leaving the White House. The agenda was not publicly released to the press, but topics such as Trans-Atlantic ties are thought to have been discussed. Merkel enjoyed an especially warm relationship with Obama, who in 2017 told a huge Berlin crowd that Merkel had done "outstanding work, not just here in Germany, but around the world."

Housing activists demanded the government hit back by expropriating real estate from big rental companies at a Berlin protest.

Rents have risen sharply in Berlin and other German cities during the past decade as Germany's booming job market continues to attract a large number of workers.  Average rents in Berlin have pushed past €10 ($11.23) per square meter per month, according to a recent study by real estate group CBRE Berlin and German mortgage bank Berlin Hyp AG.

Organizers claimed 40,000 people attended the central event in Berlin, while the police announced only that the crowd numbered "far more than 10,000."

AfD MP in controversial Russia links

Markus Frohnmaier, a member of the German parliament from the far-right AfD party, has been confronted with documents that suggest his potential collusion with Russian authorities. Frohnmaier has frequently spoken out against EU sanctions on Russia, and made trips to Crimea, the Ukrainian territory annexed by Russia in 2014, as well as parts of eastern Ukraine controlled by pro-Russian separatists. The documents were obtained by the Dossier Centre, an organisation that aims to investigate Kremlin attempts to influence politicians abroad.When confronted by the BBC, Frohnmaier denied that he knew the documents existed, and claimed that they were fake. This has led to calls from the German SPD party to investigate Frohnmaier. The latest in a series of potential scandals is plaguing the far-right AfD, threatening to overshadow the launch of its campaign for next month’s elections for the European Union’s legislature.


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