Europe’s Beating Heart
As the third-largest economy in the world and the largest in Europe, the German economy is pivotal to the health of the European economy. An underperforming German economy generally portends an underperforming European economy, and vice versa. This is why it is particularly significant that, after a period of sickness, the German economy, in comparison with the previous decade, had a stellar year in 2006.
Economic reports released by Germany’s federal statistics office show that the nation posted an economic growth rate of 2.5 percent last year, more than double that of 2005. The impressive growth, reported Expatica, was fueled by “exports and rising corporate investment” (January 11). By November 2006, German exports—thanks to increasing global demand for German-made goods—had leaped 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. German companies seeking to take advantage of booming demand bolstered output, investing money in new machinery, technology and 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 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. The German economy, reported 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.
Europe is emerging as a global economic power, and the German economy is unequivocally the driving force behind this trend.