Is Euro Crisis Spreading to Germany?

Because of the nature of the situation in the Euro area the situation in the periphery is often up for analysis. For example I looked at Spain's current problems only yesterday. However if you have a periphery you also have to have a core and today I wish to look at the core nation the Federal Republic of Germany. She wears various coats for example she is the potential saviour of the Euro but often also metamorphoses into the supposed villain of the piece.

I would Imagine there is more than a small portion of those economies in Europe which would prefer not to pay for the irresponsible fiscal actions of neighboring nations states. As Germany comes to the rescue to bailout others, the dilute their own economy and devalue their currency through inflation. 

The German economic locomotive

This part of the story is something of a stereo type which I have hinted at in the use of locomotive. However if we look at the numbers from the Federal Statistics Office we see that she has lived up to such a description,up to now anyway. For example economic growth was 3% in 2011 and real earnings actually had positive growth over the year of 1.1%. Employment has continued to rise for example in May it was 41.497 million as opposed to 40.945 million a year earlier and 40.419 million in May 2010. Rising employment has meant that unemployment has fallen over the past 2 years as well giving an unemployment rate of 5.5%. And of course we have her export and trade performance.

In 2011 Germany exported goods worth 1 060.0 billion euro and imported goods worth 902.0 billion euro. In 2011, the value of German exports for the first time exceeded a trillion Euros.

It had been a long time since America produced more than it consumed, but that time might just return soon. The US unfortunately runs deficits in most areas of its economy. 

This is reinforced by the fact that Germany has had a trade surplus every year since 1951,although of course back then we are only looking at West Germany. I think we can call that a trend!

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