To say the German ZEW numbers were a bit of a shocker is an understatement, so has it highlighted a very big problem with the German economy?
We know the Germans have big business with Russia but surely it’s not that big that they are adversely affected by the sanctions? In 2013 Germany had €36bn in exports to Russia, around 3% of all exports. Nearly 6500 German companies do business with Russia and that makes up around 10% of exporters from Germany who do business with Russia. While sizeable they’re hardly numbers that would lead to such big falls in the German economy overall.
The European economic disease (Eurola, as reader Si calls it) has spread into the one country who had the means and the will to get themselves straight as they came out of the crisis. The German model should have been a blueprint for the rest of Europe. Now all that hard work is under threat as they get caught up in the whirlpool the rest of Europe is getting sucked down into.
The Germans may have a big surplus but it looks like they’re going to need every single euro cent of it and even that may not be enough. If you want a proxy on how Europe is going to come out of this then watch the Germans. They are the Eurozone’s anchor and if they go the rest have no chance.
