Going nowhere fast: The German locomotive has been slowed down by adverse economic signals
Is Germany still the economic engine of Europe? Despite the unstable geopolitical outlook and the weak economic growth situation in the European Union, the hopes of euro-optimists remain with Germany. However, the economic engine of the country is no longer running so smoothly. One of the reasons is the Russia-Ukraine crisis — in particular, the sanctions imposed on Russia and Russia’s responses to those measures. Germany is also not immune to the cyclical downturn. The economic risks in Germany are high, due to weak market conditions in the euro area, especially when you consider that more than 35 percent of total German exports go to the other euro zone economies.
The catbird seat
In the second half of 2014, production in Germany decreased significantly. Since the country is a major exporter in Europe, the weakening of its manufacturing sector bodes ill for the state of the global economy, too. To understand the origin of the problem, we have to