The Revival of Germany’s Economy
While many countries are facing financial ruin, Germany has experienced its best quarter of growth since East and West Germany unified in 1990. During the second quarter of this year, the German economy grew by 2.2 percent, according to data released by Germany’s statistics office.
“[T]he recovery of the German economy, which lost momentum at the turn of 2009/2010, is really back on track,” wrote the statistics office.
The New York Times writes that if growth were this strong all year, then Germany’s economy would increase by 9 percent.
The 2.2 percent growth is well above the 1.4 percent forecast.
The statistics office also revised its growth estimate for the first quarter of 2010 from 0.2 percent to 0.5 percent.
According to Germany’s Economy Minister Rainer Bruederle, the “recovery of the German economy has shown itself to be much stronger than people have recently predicted.”
He predicted that German economic growth for 2010 could be over 2 percent of gross domestic product. “We’re currently living through an extra-large upswing,” he said.
The chief economist at Commerzbank AG, Joerg Kraemer, now predicts that Germany’s economy will grow by 3.25 percent, instead of his earlier prediction of 2.5 percent.
These strong results will probably cement Germany’s role as Europe’s, and even the world’s, economic leader.
“The battle over how to navigate the financial crisis helps display Germany’s emerging post-Cold War identity as a country less tolerant of foreign demands and lecturing, one with a tenser relationship with European partners,” writes the Times.
Germany wanted to deal with the financial crisis in a different way to other countries. Rather than throwing as much money as it could at the problem, Berlin preferred a prudent, cautious approach. German leaders were opposed within and without Europe, but they stuck to their guns. At the recent G-20 meeting, the German solution was victorious over the American one.
“Though Germany has plenty of problems to grapple with at home, it has also become less obsessed with its historical crimes and more enthusiastic about its economic model, its culture and its improved standing in the world,” writes the Times.
“Jenny Wiblishauser, 33, a single mother in the southern town of Memmingen, said Germany’s financial prudence—and its willingness to ignore foreign criticism—made her proud. ‘Before, the Greeks would call us Nazis, and we would act vulnerable,’ she said. ‘Now one says, ‘Well, I’m not driving there for vacation.’”
The Times continues, “The venomous contempt in the German news media directed at Greece raised significant concerns among allies that a more assertive Germany had emerged, said Thomas Klau, an expert on European integration at the European Council on Foreign Relations.
“‘That was like a wake-up call to the rest of Europe that something had changed in Germany,’ Mr. Klau said.”
Now, the numbers seem to show that Germany got it right, and America got it wrong. Germany’s new assertiveness has worked.
Something has indeed changed in Germany. Its economy is stronger, while most of the world is weak. But more importantly, the Germans are growing more self-confident and assertive. Expect this attitude to spread beyond just economic policy.