Always Look On The Bright Side Of The Worst Recession In Post-War History

A $256.15 quadrillion zillion stimulus package of their own money taken from them by their government and given back to them as a gift (to be paid back to the government by their grandchildren and great-grandchildren and so on should they ever have any) has lifted German spirits.

Berlin

Sort of. But just keep smiling through the Coronavirus stimulus party anyway, Germany.

German consumer morale improved less than expected heading into October, a survey showed on Wednesday, putting a damper on hopes that household spending in Europe’s largest economy will be strong enough to drive a quick recovery from the COVID-19 shock.

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, edged up to -1.6 heading into October from an upwardly revised -1.7 in the previous month.

Can’t Reach The Current Planned Level Of Carbon Emission Reduction?

I know. Let’s introduce an even higher and more unrealistic new level of carbon emission reduction we can’t reach!

Uschi

Then everybody’s happy. Except those folks who still have to live in the real world.

German industry sceptical of EU’s new 2030 climate goals – The European Commission will present today (17 September) detailed proposals to reduce carbon emissions in the EU by 55% below 1990 levels by 2030. While German industry officially welcomes the new ambitions, it is also clearly sceptical.

The increase of the current target for 2030 by a further 15% would mean a roughly fivefold increase in the efforts of the 27 EU member states, BDI President Dieter Kempf emphasised at the beginning of his speech.

And according to BDI calculations, Germany alone would have to invest €2.3 trillion to achieve climate neutrality by 2050. “You can work out who of the other 26 countries can afford to do this. The level of ambition not only differs greatly within the EU, but also globally,” said Kempf.

 

Germany Would Be So Much Poorer Without Berlin

Not. Not according to this latest study.

Berlin

Normally, the per capita economic output (GDP) in capital cities in Europe is higher than in the rest of the given country. There is one big exception, however. Germany would be wealthier without Berlin.

Poor but sexy” is out. Now Berlin is just poor. Actually, it’s been that way for ages but nobody seems inclined to do anything about it. See the current red-redder-green city government.

Jeder Deutsche wäre ohne Berlin knapp 80 Euro reicher. Every German would be about 80 euros richer without it.

But Isn’t Everybody In Sweden Dead By Now?

How could their economy be in relatively good shape? They were BAD (compared to head of the class Germany) because they didn’t do that COVID-19 lockdown thing. I don’t understand.

Sweden

The 18 members of the DAX 30 index of Germany’s biggest firms that have already reported swung from a healthy profit in the second quarter of 2019 to a loss almost as big this year. For many companies, including Volkswagen, a giant carmaker, and BASF, the world’s biggest chemicals concern, results were even worse than analysts had expected. The income of the 27 Swedish firms in Stockholm’s OMX 30 that have reported so far fell by 49%, bad but much better than the DAX. If you include adjusted earnings of two opaque investment vehicles in the OMX, income actually rose…

In public, CEOs of big German companies generally praised their government’s tougher policies. Privately, though, some shared the fears expressed openly by the BVMW, the association of Mittelstand firms that represents 3.5m businesses with up to 250 employees. In an open letter in May the BVMW called on the government to lift the lockdown “before it is too late” and criticised it for lacking an exit strategy.

German Of The Day: Tiefer Fall

That means a steep fall. Very steep in this case. Really, really, really steep already.

Fall

You would have to back in history some ninety years to find a comparable peacetime decline in German economic activity.

But why would anybody want to do that?

Germany’s Economic Slump Shows Scale of Europe’s Challenge – The 10.1% drop in output in the region’s largest economy is a harbinger of worse figures elsewhere. Spain, France and Italy will probably report even deeper contractions on Friday, reflecting a recession that prompted an unprecedented policy response from governments.

Man wird in der Geschichte bis zur Weltwirtschaftskrise vor rund neunzig Jahren zurückgehen müssen, um in Friedenszeiten einen vergleichbaren Sturz der wirtschaftlichen Tätigkeit in Deutschland zu entdecken.

It’s Magic!

It’s as if none of this Corona crap ever happened at all!

Magic

Maybe that’s because none of this Corona crap ever did happen. Not like it was supposed to happen, I mean. Not that anybody ever really knew how it was supposed to happen but everybody knows now that it simply didn’t happen that way. Folks sure got riled up though, didn’t they?

Germany poised for big economic recovery – The German economy is expected to shrink by more than 6% this year. But a new study found the country could be in for a big economic recovery next year.

In a best-case scenario, the economy could recover in about five months, the institute said. This would result in a more mild economic slump of just 3.9% in 2020.

But in a worst-case scenario, the recovery could also take as long as 16 months. The economy could then shrink by 9.3% this year, with growth of 9.5% forecast for 2021.

“In that case, the recovery would stretch into 2022.”

If We’re Really Lucky, June Is Going To Suck

May was REALLY awful.

Exports

And we don’t even want to talk about June.

The mood among German exporters recovered somewhat in May after a “catastrophic” April, the first full month of coronavirus lockdown measures in Europe’s largest economy, the Ifo institute said on Tuesday.

“Virtually every sector still expects further declines, yet these will be less sharp than had been expected in the previous month,” the Munich think tank said in a monthly release.

The Ifo export indicator, based on a survey of around 2,300 manufacturing businesses, rose in May to -26.9 from -50.2. It is a net reading for respondents expecting an increase minus those who see a decline.

More Bad News

For the perennial doom-and-gloom folks in charge of what we are supposed to think – at least here in Germany.

Gloom

As if the popular uprising against the Coronavirus shutdown here wasn’t enough.

Bundesbank sees early signs of recovery in German economy – Central bank expects easing of lockdown to boost activity in Europe’s largest economy

“There is currently much to suggest that overall economic developments will move up again in the course of the second quarter as a result of the easing measures and a recovery is under way.”

It’s Only Money

Other people’s money. But still.

Money

The schwarze Null or “black zero” (meaning a balanced budget) was yesterday. A supplementary budget for 2020 at about 40 percent the size of the original one will now be approved by the German cabinet to help fight the economic woe being caused by the corona pandemic.

Germany tears up fiscal rule book to counter coronavirus pandemic – Berlin to raise €150bn in new debt to bolster ailing economy.

German Of The Day: Rückgang

That means decline.

Spielball

You know. Like the Decline and Fall of the Merkel Empire?

Biggest German industry slump in a decade revives recession fears – German industrial output suffered its biggest fall in December since the recession-hit year of 2009, a shock drop highlighting the weakness in manufacturing that risks dragging Europe’s largest economy into contraction again.

Deutsche Industrieproduktion bricht ein – “Spielball der Weltkonjunktur.”