Europe’s largest economy registers negative growth in two successive quarters
Germany is heading into a recession, a report released by Chancellor Angela Merkel’s office said. The economists working at the Chancellor’s office see Germany technically in a recession given the country’s negative growth in two successive quarters, the German weekly Der Spiegel reported. Europe’s largest economy is expected to contract between July and September, as it did in the second quarter.
The admission comes just days after the German Economy Ministry announced that the country was not in a recession. Despite grim official projections, Merkel’s government continues to downplay the economic fears. “The German finance minister doesn’t seem to be in a hurry,” the public broadcaster Deutsche Welle reported this week, “though, indicating that a stimulus package will only come if and when Germany is in a very pronounced recession.”
In June, Germany’s industrial production fell by 5.2 percent compared to last year, the biggest decline since the financial crisis of 2008. A no-deal Brexit could further weigh down Germany’s shrinking economy, economists at the Chancellor’s office believe. “The German government thinks that there is a “high probability” of a no-deal Brexit,” the London-based Financial Times confirmed.
Der Spiegel reported the assessment drawn by economists at Federal Chancellery:
The Chancellor’s office expects a continued downturn in German economy for this year. “There are emerging signs of a slight decline in the gross domestic product (GDP) for the third quarter, and thereby a technical recession,” a chancellery documents [obtained by] Der Spiegel said.
In the second quarter, the economic output contracted by 0.1 percent as compared to the previous quarter. The exports [working for] Chancellor Angela Merkel (Christian Democratic party) see a similar decline between July and October. If an economy declines for two quarters in a row, this is usually defined as a recession. “A series of early indicators signal a weak industrial output continuing well within in the second-half of the year,” [the document said].
The report regards this to be a positive sign that the domestic economy was still intact. “The severe crisis for the German economic is still not to be expected, provided the trade conflicts do not escalate and a unregulated Brexit does not take place,” the document further said. “We see no need for short-term measures to stabilize the economy.” [Translated by the author]
Chancellor Merkel’s spokesman refused to comment on the report cited by Der Spiegel, news agency Reuters reported.
Current developments thoroughly debunk the narrative the mainstream media and the liberal elites have been peddling in recent years. They predicted a disaster for the United Kingdom for daring to leave the European Union, and foretold economic doom if candidate Donald Trump were to take the White House. Germany, on the other hand, was to be rewarded with an economic boom for letting in millions of able-bodied men from Arab North Africa and Middle East.
Ahead of the 2016 presidential election, Germany’s Vice Chancellor Sigmar Gabriel warned U.S. voters of an impeding doom if they were to elect the Republican candidate Trump. “[The U.S. will see] shrinking GDP, fewer jobs and higher unemployment,” Gabriel told Der Spiegel.
“Britain’s decision to leave the EU has left the country on the brink of a recession that will reverberate around the world,” The Guardian reported days after the Brexit referendum.
Germans, in contrast, were going to reap benefits for opening up their borders. “The German business community views the recent influx of refugees as an opportunity to help companies grow and ensure long term prosperity,” Der Spiegel joyfully reported in August 2015. “Refugees to pay our pension,” a February 2016 editorial in the newspaper Frankfurter Rundschau promised.
In a April 2018 editorial, London-based The Economist declared Chancellor Merkel-led Germany as the “model for the West.” Justifying its enthusiasm, the magazine explained that the “biggest change comes from Mrs. Merkel’s ‘open door’ policy towards refugees, which brought in 1.2 million new migrants in 2015-16.” The magazine rejoiced at the sudden outburst of diversity, thanks to Merkel’s immigration policies, which were turning “once-homogeneous Germany” into a “melting-pot.”
The hopes of integrating migrants into Germany’s export-oriented and technology-driven economy have failed miserably. “Almost every second unemployed person is of migrant background,” Germany daily Die Welt reported in March. “In case of persons fit for employment receiving unemployment that number was 57 percent.”
The situation would have called for schadenfreude had this economic downturn only impacted the German political elite who have blindly backed Chancellor Merkel’s policies. The poverty in Germany is at the highest since the unification of the country in 1990. The retired and the elderly are among the worst hit. Close to 15 million Germans, over 20 percent of the population, “aren’t earning enough to pay their bills or adequately heat their homes,” a 2018 government study reveals.
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