As the largest economy in Europe, the German economy is pivotal to the health of the European economy. An underperforming German economy generally portends an underperforming European economy. After a period of hibernation, the German economy had a stellar year in 2006 and resumed its role as the beating heart of European wealth and stability.

Economic reports released by Germany’s federal statistics office show that the nation posted an economic growth rate of 2.5 percent in 2006, more than double the growth rate of 2005. The impressive growth, reported Expatica, was fueled by “exports and rising corporate investment” (January 11). By November last year, German exports—thanks to increasing global demand for German-made goods—had leaped ahead 19.6 percent over the same period in 2005. Germany’s trade surplus at the end of November last year totaled €19.3 billion, the highest level since German reunification in 1990.

The nation literally exported itself out of a six-year economic hibernation.

Greater global demand for German products proved a boon across the nation. Business confidence is up. Throughout 2006, industrial output soared. Productivity increased. Domestic spending was increasing. The need among many German companies to bolster output caused several to invest money in new machinery, new technology and new employees. Germany’s unemployment rate—a contentious issue among politicians ever since the Berlin Wall fell and thousands of unemployed East Germans entered the work force—dropped by nearly a full percent to a five-year low.

The impacts of Germany’s economic upswing reverberated across Europe. The stronger the German heart pounded, the more life it pumped into the surrounding national economies, as well as the European economy in general. The German economy, reports Deutsche Welle, “has won back its place as the driving force in the European economy” (January 11). Germany’s economy is once again the engine empowering Europe’s growing economic power and influence.

The forecast for 2007 is that the Germany economy will continue to pump life into the European economy. According to Joaquin Almunia, European Union Economic and Monetary Affairs commissioner, if Germany’s economic resurgence continues in 2007, EU-wide growth will be half a percent above its forecast growth rate.

Europe is emerging as a global economic power, and the German economy is the driving force behind this trend.