Speaking Of Null…

Zero, that is.

Debt

Germany May Abandon Its Beloved Black Zero – Chancellor Angela Merkel is still clinging to her policy of a balanced budget, but it is becoming increasingly clear that Germany’s economic downturn could soon usher in a return to deficit spending…

For years now, a balanced federal budget, known here in Germany as the “schwarze Null,” or black zero, without any fresh borrowing, has been a permanent fixture of German fiscal policy. After four decades of chronic borrowing to finance the German national budget, the shift stood for the renunciation of the debt state and became a symbol of sound policy. But now the issue is the subject of debate again — not only due to expensive political plans, but also the threat of a recession in Germany…

“We can accomplish the tasks at hand without accruing new debt.”

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What Goes Up

Must go flat.

Flat

And then shrink.

Germany’s economy is now shrinking – The mood music had grown so ominous that the shock was somewhat muted. After weeks of dismal survey and industrial-output numbers, it was little surprise to learn on August 14th that Germany’s gdp had contracted by 0.1% in the second quarter of 2019 compared with the previous three months. The economy has been essentially flat over the past year. Household spending, bolstered by wage growth in a tight labour market, has held up but the slump in manufacturing, which represents over one-fifth of output, is deepening. Companies are cutting work hours and issuing profit warnings. Many analysts think Germany is heading for outright recession.

Will the government open the spending taps? Probably not.

German Of The Day: Igelsex

Go figure. It’s pronounced “eagle sex” but it means hedgehog sex.

Igelsex

Germans kept up at night by noisy igelsex (that’s hedgehog coupling) – Police called out to reports of nocturnal disturbances find hedgehogs ‘having fun.’

I don’t buy it, though. I think these Germans were kept up at night, tossing and turning, worrying about the German economy.

“Germany’s economy is highly dependent on exports, and that’s what’s hitting the German economy now. If the trade conflicts persist for many more years, this will hit Germany very hard.”

German Of The Day: Freier Fall

That means freefall.

Freefall

German manufacturing reports industry ‘in freefall’ – Key survey points to weakest sentiment in nine years.

The Ifo Institute’s manufacturing business climate index slumped to minus 4.3 in July from positive 1.3 the previous month. The reading was the lowest in more than nine years and echoes a separate survey released on Wednesday that pointed to mounting troubles in Europe’s powerhouse economy.

“No improvement is expected in the short term, as businesses are looking ahead to the next six months with more pessimism.”

German Of The Day: Handelskrieg

That means trade war.

Handelskrieg

A trade war between the United States and Europe is coming and the fallout could tip Germany into recession, according to analysts at German lender Commerzbank…

Official German statistics supplemented by the bank’s own research show that in 2018, the United States was the top export destination for German cars, accounting for about 12% of the total with a value of 27 billion euros of parts or finished vehicles.

The bank estimated that a Trump-ordered tariff increase of 25 percentage points on EU auto imports would slash that figure for Germany down to around 14 billion euros per annum.

When factoring in how much of that export figure is actual German “added value,” the bank estimated that total economic output for the country could fall by around 0.25 percentage points.

“All the more dangerous in a situation where the German economy is only just managing to avoid a recession,” it read.

German Of The Day: Abkühlung

That means cooling or cooling off.

Cooling

You know, like German growth predicted to stall during 2019 in significant Abkühlung?

Germany’s economy could experience a “significant cooling” in 2019 and could see sharply lower growth this year, the country’s leading economic institutes have warned in a report compiled for Germany’s economics ministry.

Forecasts for German growth were revised significantly downwards in a ‘Joint Economic Forecast’ collated by several prominent German economic research institutes and published Thursday, with economists predicting a meager 0.8% this year.

This is more than one percentage point lower than a prediction for 1.9% made in a joint economic forecast in fall 2018.

“The long-term upswing of the German economy has come to an end.”

German Of The Day: Die fetten Jahre sind vorbei

That means the “fat” (good) years are over.

Fat

Merkel Doesn’t Want to Tell Germans the Good Times May Be Over – The leaders preparing to take over when Merkel steps aside are worried too. They say voters could be caught unawares by an economic shock in the middle of the political transition from Merkel’s rule. Two senior party officials this month voiced concerns that such a double whammy could shake up the political map ahead of the next election. They asked not to be identified questioning the chancellor’s approach.

One shouldn’t undermine the economic upswing by talking it down.

No Job Losses Here

In Germany. Then everybody’s happy, right?

A380

The German government is not expecting widespread job cuts in Europe’s largest economy following Airbus’s decision to scrap production of the A380 superjumbo, the aerospace policy coordinator told Reuters on Thursday.

“We expect these jobs will largely continue to exist, working on different models such as the A350, the newest plane on the market, or the A330 neo.”

 

The Worst Is Over

Or something.

Growth

For much of the financial crisis that started in 2007, Germany remained strong and held the envy of modern economies around the world.

In 2010, the industrious country known for its fiscal discipline had GDP growth of 4.2%, followed by respectable 3% GDP growth in 2011.

Unfortunately, for Germans and the world, there are increasing signs the German economy is being marred by the global crisis. In 2012, GDP growth was a meager 0.7%. More significantly, GDP actually contracted by 0.5% in the fourth quarter.

Währung – Deutschland: Devisen: Euro gibt nach – IWF prognostiziert auch für 2013 Rezession im Euroraum