The experts already for a long period assume that the consequences of Brexit will be noticeable in many places globally, and we understand that everybody in the European Union will face both consequences – political and economical. I agree to the view expressed by British expert and Professor Iain Begg that the EU should become more flexible, but at present there is no flexibility. Especially, taking into account the processes that take place in Germany – this makes it difficult for the EU to change the position. Let’s not forget that following the enlargement of the EU that comprises now 28 Member States it is considerably more difficult to achieve an agreement than 40 years ago, when there were only six Member States.

We cannot close our eyes and pretend that Brexit does not affect us. The crisis of German economy that is discussed now so widely might spread all over Europe after the impact of Brexit as the recession risk. The Central Bank of Germany also warns about German recession concern, because, under the influence of Brexit, there might be drastic decrease of the growth of automobile manufacturing industry. Having viewed different data, we may draw a conclusion that the fourth largest economy of the world faces recession. These are very harsh words, but it is a fact – German GDP during the second quarter decreased by 0.1 per cent.

In Germany it is possible to feel the decrease of manufacturing volume and slowing down of export, creating a chain reaction in the influence of other European countries, the import or the total demand from the main trade partners of Germany also decreases, for example, in France that the last year exported to Germany 70 billion dollars, in Italy – 59 billion dollars or in Spain – 34 billion dollars. There is also a risk that the companies of these countries will sell Germany less automobiles, parts of vehicles, and smaller countries this might be problematic, taking into consideration that Germany is their most important trade partner. For example, in 2017 one third of the export of the Czech Republic was exported to Germany, out of which 6 billion dollars constituted the trade of vehicle parts. It equals to 3.2% (all export) and 0.4% (only vehicle parts) of the economy of the Czech Republic.

German Bundesbank, emphasizing the decline of export, finds that Brexit and trade war between US and China are among the main factors that caused the decline of GDP by 0.1%, this, probably, will cause also similar decline in September.

German companies since January till May this year exported to Great Britain goods for approximately 35 billion euro – in comparison to the previous year, the decline constituted 2.3%. Meanwhile, the import from Great Britain decreased even more drastically – by 6.1% down to 15 billion euro. The main reason – continuous uncertainty in relation to the withdrawal of Great Britain from the EU and future economic relations.

Erik Schweitzer, President of the Association of German Chambers of Industry and Commerce (DIHK), already finds that Brexit has become a threat to German economy. According to him: “In total, 70% of German companies engaged in business activities in Great Britain anticipated that trade will have decline this year – in 2019. Meanwhile every eighth company operating there would like to redirect their investments to other markets – mostly to the countries of the EU internal market.”

The International Monetary Fund already reduced global economical growth forecast for this year down to 3.1%, warning about the negative impact of Brexit on the global economy in case of the withdrawal of Great Britain. The negative impact of Brexit on economy may be limited by smart and well-considered taxation policy in both Great Britain and Germany. However, according to the data of Halle Institute for Economic Research we can already see that Brexit “whip” will hit Germany hardest.

Source – https://www.globalresearch.ca/where-a-no-deal-brexit-would-hit-hardest/5668611

Craig Erlam, Senior Market Analyst at OANDA, said that, irrespective of recent forecast, the economic decline hit Germany more than the United Kingdom. He mentioned that: “It is very difficult not to relate the economical issues of both countries, because they both concluded an agreement in the first quarter and are obviously not protected against the result of Brexit”.

The United Kingdom is the third largest export market in Europe for Germany and the fifth globally, and its total amount of goods in 2018 was 75 billion British pounds. I have no doubt that Germany will do its utmost that after Brexit Great Britain and the EU would have close partnership in future regarding many issues of cooperation that might be a guarantee for the survival of small countries.

According to the opinion of Germany, the final result of Brexit may be on 31 October. Therefore, before providing a forecast on the economic stability of the EU Member States, let’s initially wait for the nearest results at the end of October.

 

 

 

 

The experts already for a long period assume that the consequences of Brexit will be noticeable in many places globally, and we understand that everybody in the European Union will face both consequences – political and economical. I agree to the view expressed by British expert and Professor Iain Begg that the EU should become more flexible, but at present there is no flexibility. Especially, taking into account the processes that take place in Germany – this makes it difficult for the EU to change the position. Let’s not forget that following the enlargement of the EU that comprises now 28 Member States it is considerably more difficult to achieve an agreement than 40 years ago, when there were only six Member States.

We cannot close our eyes and pretend that Brexit does not affect us. The crisis of German economy that is discussed now so widely might spread all over Europe after the impact of Brexit as the recession risk. The Central Bank of Germany also warns about German recession concern, because, under the influence of Brexit, there might be drastic decrease of the growth of automobile manufacturing industry. Having viewed different data, we may draw a conclusion that the fourth largest economy of the world faces recession. These are very harsh words, but it is a fact – German GDP during the second quarter decreased by 0.1 per cent.

In Germany it is possible to feel the decrease of manufacturing volume and slowing down of export, creating a chain reaction in the influence of other European countries, the import or the total demand from the main trade partners of Germany also decreases, for example, in France that the last year exported to Germany 70 billion dollars, in Italy – 59 billion dollars or in Spain – 34 billion dollars. There is also a risk that the companies of these countries will sell Germany less automobiles, parts of vehicles, and smaller countries this might be problematic, taking into consideration that Germany is their most important trade partner. For example, in 2017 one third of the export of the Czech Republic was exported to Germany, out of which 6 billion dollars constituted the trade of vehicle parts. It equals to 3.2% (all export) and 0.4% (only vehicle parts) of the economy of the Czech Republic.

German Bundesbank, emphasizing the decline of export, finds that Brexit and trade war between US and China are among the main factors that caused the decline of GDP by 0.1%, this, probably, will cause also similar decline in September.

German companies since January till May this year exported to Great Britain goods for approximately 35 billion euro – in comparison to the previous year, the decline constituted 2.3%. Meanwhile, the import from Great Britain decreased even more drastically – by 6.1% down to 15 billion euro. The main reason – continuous uncertainty in relation to the withdrawal of Great Britain from the EU and future economic relations.

Erik Schweitzer, President of the Association of German Chambers of Industry and Commerce (DIHK), already finds that Brexit has become a threat to German economy. According to him: “In total, 70% of German companies engaged in business activities in Great Britain anticipated that trade will have decline this year – in 2019. Meanwhile every eighth company operating there would like to redirect their investments to other markets – mostly to the countries of the EU internal market.”

The International Monetary Fund already reduced global economical growth forecast for this year down to 3.1%, warning about the negative impact of Brexit on the global economy in case of the withdrawal of Great Britain. The negative impact of Brexit on economy may be limited by smart and well-considered taxation policy in both Great Britain and Germany. However, according to the data of Halle Institute for Economic Research we can already see that Brexit “whip” will hit Germany hardest.

Source – https://www.globalresearch.ca/where-a-no-deal-brexit-would-hit-hardest/5668611

Craig Erlam, Senior Market Analyst at OANDA, said that, irrespective of recent forecast, the economic decline hit Germany more than the United Kingdom. He mentioned that: “It is very difficult not to relate the economical issues of both countries, because they both concluded an agreement in the first quarter and are obviously not protected against the result of Brexit”.

The United Kingdom is the third largest export market in Europe for Germany and the fifth globally, and its total amount of goods in 2018 was 75 billion British pounds. I have no doubt that Germany will do its utmost that after Brexit Great Britain and the EU would have close partnership in future regarding many issues of cooperation that might be a guarantee for the survival of small countries.

According to the opinion of Germany, the final result of Brexit may be on 31 October. Therefore, before providing a forecast on the economic stability of the EU Member States, let’s initially wait for the nearest results at the end of October.

 

 

 

 

At present the most recent GDP report of Germany on the decrease by 0.1% certainly marks the end of the decade of golden economy for the economy of Germany. Although the rate of economical growth has decreased, it should be mentioned that there is no critical decline yet – we can still manage to avoid it, if there will be taken all necessary measures. Olaf Scholz, Federal Minister of Finance of Germany, said that Germany has a fiscal ability to “powerfully” overcome any future economical crisis. He made to assume that Berlin might ensure additional expenditure up to 50 billion euro (45.7 billion British pounds). I can only agree to the position of Peter Chatwell, head of rate strategy at Japanese bank Mizuho that the recession threats might make Germany to become active again. He said: “The fiscal stimulus of Germany depends from recession, and the present laws enable that already.”

According to German economist Carsten Brzeski, the trade conflicts between countries, global uncertainty and complicated automobile manufacturing industry at present bring Germany to its knees. One of the solutions that would help the largest European economy to stop easily its decline is to reduce it to the long-term stagnation, however, I have doubts, whether it would be the best solution.

At present the economy of Germany has become amazingly dependent on export.  Germany already long ago has had the tendency to trade surplus, but it has never been so significant. Within the last years the National debt has considerably decreased, and many developers of European policy have encouraged German government to spend more.

The average trade surplus in the country is almost 8% out of GDP since 2005 and 6.5% since 2004. With almost 300 billion dollars in 2018 the surplus of German trade is almost the largest in the world. Specially towards the trade oriented German economy is the reason why it earlier after the crisis recovered considerably sooner than other countries. At present Germany manufactures significantly more than consumes and since 2013 there has been fiscal surplus accumulated, while US consumes more than manufactures. It is very unusual that so large economy as Germany is so sensitive to the fluctuations of external demand.

At present, other Member States of the eurozone also show the indications for weaker economic activity. German Council of Economic Experts lowers forecast for the real GDP increase in the eurozone down to 1.2% in 2019. In 2020 the rate of increase is forecasted upwards by 14%. In addition to the unclear outcome of Brexit negotiations, the unsolved trade conflict between the United States of America, Europe and China, as well as the threats of the slowdown of Chinese economy are stronger than it was expected before. Taking into consideration relatively slow global economic impulse, different taxation protection measures might prevent the recession of German economy.

One of the main global automobile industry driving forces during the last decade has been the economic growth of developing countries, which has facilitated demand for the import automobiles, besides – these countries also had relatively high natural increase of population that increases the number of potential buyers of automobiles even more. Germany traditionally has relied on selling its manufactured products, for example, automobiles, abroad. But during the economical growth this has always been the heel of Achilles during the global falls. Irrespective of the fact that during the last decade Germany has been an outstanding example and exception for the European economic weakness, Marcel Fratzscher, president of the Berlin-based economic research institute DIW Berlin, finds that “there is already technical decline in Germany, because the third quarter has weak development”. Weak consumers’ demand both domestically and internationally, as well as introduction of more strict standard of fuel emissions for automobile manufacturers temporary slowed down production.

The weakness of European economy giant has alarmed many people outside Germany. The decline takes place in German economy following the warning expressed by national central bank that the fall of export in summer will continue also in autumn. Bundesbank declared that the decrease of demand for the equipment for motor roads and industry observed in the second quarter will likely continue also in the third quarter, leaving economy on the margin of technical decline, which is defined as two successive quarters following the negative GDP increase. The bank analysts find that common economical indicators again might a bit decrease. Principally, the basis for that is the present industrial decline.

The economical stability of Germany was studied by BBC approximately eight years ago, emphasizing, how this super power has managed to sustain its positions of the global market leader, to save euro and to protect other countries against the recession, as well as to maintain the large volumes of export. At present the situation has changed drastically. However, it is a normal and understandable phenomenon in economy. Already since the beginning of the 19^th century the market economy has faced regular developments and falls. It is assumed that market economy has cyclic development, which means that there are both economical booms and falls. The most significant economical falls we call crises. The present recession in Germany makes to reconsider what has happened during this decade. May be it is even necessary to fall, irrespective of pain we would suffer, and then to get up and continue our path with renewed strength.

At present the most recent GDP report of Germany on the decrease by 0.1% certainly marks the end of the decade of golden economy for the economy of Germany. Although the rate of economical growth has decreased, it should be mentioned that there is no critical decline yet – we can still manage to avoid it, if there will be taken all necessary measures. Olaf Scholz, Federal Minister of Finance of Germany, said that Germany has a fiscal ability to “powerfully” overcome any future economical crisis. He made to assume that Berlin might ensure additional expenditure up to 50 billion euro (45.7 billion British pounds). I can only agree to the position of Peter Chatwell, head of rate strategy at Japanese bank Mizuho that the recession threats might make Germany to become active again. He said: “The fiscal stimulus of Germany depends from recession, and the present laws enable that already.”

According to German economist Carsten Brzeski, the trade conflicts between countries, global uncertainty and complicated automobile manufacturing industry at present bring Germany to its knees. One of the solutions that would help the largest European economy to stop easily its decline is to reduce it to the long-term stagnation, however, I have doubts, whether it would be the best solution.

At present the economy of Germany has become amazingly dependent on export.  Germany already long ago has had the tendency to trade surplus, but it has never been so significant. Within the last years the National debt has considerably decreased, and many developers of European policy have encouraged German government to spend more.

The average trade surplus in the country is almost 8% out of GDP since 2005 and 6.5% since 2004. With almost 300 billion dollars in 2018 the surplus of German trade is almost the largest in the world. Specially towards the trade oriented German economy is the reason why it earlier after the crisis recovered considerably sooner than other countries. At present Germany manufactures significantly more than consumes and since 2013 there has been fiscal surplus accumulated, while US consumes more than manufactures. It is very unusual that so large economy as Germany is so sensitive to the fluctuations of external demand.

At present, other Member States of the eurozone also show the indications for weaker economic activity. German Council of Economic Experts lowers forecast for the real GDP increase in the eurozone down to 1.2% in 2019. In 2020 the rate of increase is forecasted upwards by 14%. In addition to the unclear outcome of Brexit negotiations, the unsolved trade conflict between the United States of America, Europe and China, as well as the threats of the slowdown of Chinese economy are stronger than it was expected before. Taking into consideration relatively slow global economic impulse, different taxation protection measures might prevent the recession of German economy.

One of the main global automobile industry driving forces during the last decade has been the economic growth of developing countries, which has facilitated demand for the import automobiles, besides – these countries also had relatively high natural increase of population that increases the number of potential buyers of automobiles even more. Germany traditionally has relied on selling its manufactured products, for example, automobiles, abroad. But during the economical growth this has always been the heel of Achilles during the global falls. Irrespective of the fact that during the last decade Germany has been an outstanding example and exception for the European economic weakness, Marcel Fratzscher, president of the Berlin-based economic research institute DIW Berlin, finds that “there is already technical decline in Germany, because the third quarter has weak development”. Weak consumers’ demand both domestically and internationally, as well as introduction of more strict standard of fuel emissions for automobile manufacturers temporary slowed down production.

The weakness of European economy giant has alarmed many people outside Germany. The decline takes place in German economy following the warning expressed by national central bank that the fall of export in summer will continue also in autumn. Bundesbank declared that the decrease of demand for the equipment for motor roads and industry observed in the second quarter will likely continue also in the third quarter, leaving economy on the margin of technical decline, which is defined as two successive quarters following the negative GDP increase. The bank analysts find that common economical indicators again might a bit decrease. Principally, the basis for that is the present industrial decline.

The economical stability of Germany was studied by BBC approximately eight years ago, emphasizing, how this super power has managed to sustain its positions of the global market leader, to save euro and to protect other countries against the recession, as well as to maintain the large volumes of export. At present the situation has changed drastically. However, it is a normal and understandable phenomenon in economy. Already since the beginning of the 19^th century the market economy has faced regular developments and falls. It is assumed that market economy has cyclic development, which means that there are both economical booms and falls. The most significant economical falls we call crises. The present recession in Germany makes to reconsider what has happened during this decade. May be it is even necessary to fall, irrespective of pain we would suffer, and then to get up and continue our path with renewed strength.

The experts already for a long period assume that the consequences of Brexit will be noticeable in many places globally, and we understand that everybody in the European Union will face both consequences – political and economical. I agree to the view expressed by British expert and Professor Iain Begg that the EU should become more flexible, but at present there is no flexibility. Especially, taking into account the processes that take place in Germany – this makes it difficult for the EU to change the position. Let’s not forget that following the enlargement of the EU that comprises now 28 Member States it is considerably more difficult to achieve an agreement than 40 years ago, when there were only six Member States.

We cannot close our eyes and pretend that Brexit does not affect us. The crisis of German economy that is discussed now so widely might spread all over Europe after the impact of Brexit as the recession risk. The Central Bank of Germany also warns about German recession concern, because, under the influence of Brexit, there might be drastic decrease of the growth of automobile manufacturing industry. Having viewed different data, we may draw a conclusion that the fourth largest economy of the world faces recession. These are very harsh words, but it is a fact – German GDP during the second quarter decreased by 0.1 per cent.

In Germany it is possible to feel the decrease of manufacturing volume and slowing down of export, creating a chain reaction in the influence of other European countries, the import or the total demand from the main trade partners of Germany also decreases, for example, in France that the last year exported to Germany 70 billion dollars, in Italy – 59 billion dollars or in Spain – 34 billion dollars. There is also a risk that the companies of these countries will sell Germany less automobiles, parts of vehicles, and smaller countries this might be problematic, taking into consideration that Germany is their most important trade partner. For example, in 2017 one third of the export of the Czech Republic was exported to Germany, out of which 6 billion dollars constituted the trade of vehicle parts. It equals to 3.2% (all export) and 0.4% (only vehicle parts) of the economy of the Czech Republic.

German Bundesbank, emphasizing the decline of export, finds that Brexit and trade war between US and China are among the main factors that caused the decline of GDP by 0.1%, this, probably, will cause also similar decline in September.

German companies since January till May this year exported to Great Britain goods for approximately 35 billion euro – in comparison to the previous year, the decline constituted 2.3%. Meanwhile, the import from Great Britain decreased even more drastically – by 6.1% down to 15 billion euro. The main reason – continuous uncertainty in relation to the withdrawal of Great Britain from the EU and future economic relations.

Erik Schweitzer, President of the Association of German Chambers of Industry and Commerce (DIHK), already finds that Brexit has become a threat to German economy. According to him: “In total, 70% of German companies engaged in business activities in Great Britain anticipated that trade will have decline this year – in 2019. Meanwhile every eighth company operating there would like to redirect their investments to other markets – mostly to the countries of the EU internal market.”

The International Monetary Fund already reduced global economical growth forecast for this year down to 3.1%, warning about the negative impact of Brexit on the global economy in case of the withdrawal of Great Britain. The negative impact of Brexit on economy may be limited by smart and well-considered taxation policy in both Great Britain and Germany. However, according to the data of Halle Institute for Economic Research we can already see that Brexit “whip” will hit Germany hardest.

Source – https://www.globalresearch.ca/where-a-no-deal-brexit-would-hit-hardest/5668611

Craig Erlam, Senior Market Analyst at OANDA, said that, irrespective of recent forecast, the economic decline hit Germany more than the United Kingdom. He mentioned that: “It is very difficult not to relate the economical issues of both countries, because they both concluded an agreement in the first quarter and are obviously not protected against the result of Brexit”.

The United Kingdom is the third largest export market in Europe for Germany and the fifth globally, and its total amount of goods in 2018 was 75 billion British pounds. I have no doubt that Germany will do its utmost that after Brexit Great Britain and the EU would have close partnership in future regarding many issues of cooperation that might be a guarantee for the survival of small countries.

According to the opinion of Germany, the final result of Brexit may be on 31 October. Therefore, before providing a forecast on the economic stability of the EU Member States, let’s initially wait for the nearest results at the end of October.