Germany was one of the least affected countries in the world at the height of the financial crisis. It's economy managed to hold up, and even had enough spare cash to bail out every barista in Spain.
However is their supremacy at the beginning of the end?
German growth has been higher than the euro-zone average every quarter apart from one, throughout the whole of the financial crisis, however now faces falling into recession, as it anticipates the 3rd quarter growth data.
Manufacturing is down nearly 5%, the first time it has done this since the height of the financial crisis. A whole 3x bigger than what analysts anticipated.
Germany is the pin up boy for the euro-zone project, and was the leading economy politically and economically in the project.
However could this now be coming to an end?
However could this now be coming to an end?
The euro-zone currently faces a deflation and growth problem, and with fears of a German recession, contagion could kick in with FDI flight from the euro-zone, and could see the euro-zone back to square one.
Germans rely heavily upon exports, with their strong export business with the likes of BMW, Audi and Mercedes at the forefront of that. With global growth being sluggish, and one of their main export partners China experiencing a stuttering of their economy, this could see exports fall dramatically for the Germans in the future.
However despite these fears, Chancellor Merkel could look for a supply side policy to shift GDP upwards. Germans often complain about the state of their infrastructure such as their roads, railways, water ways and their airports. Thus you could see some investment coming into them soon to try and ramp up their economy, and stump a recession and contagion before it's too late.
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