Posted on 06/16/2007 7:49:16 PM PDT by Atlantic Bridge
Are the neighbors exuding a glow of economic vitality at the same time? Merkel's popularity gain and Sarkozy's strong start signal reforms.
Germany and France have spent much of the last decade taking turns being the "sick man" of Europe. What would happen if the Continent's two largest economies were both healthy at the same time?
Such a scenario seems more likely following the election last month of reform-minded Nicolas Sarkozy as President of France. On June 17, runoff elections are expected to award Sarkozy a strong majority in Parliament, giving him the political clout to carry out reforms such as loosening the labor market or curbing unions' power to shut down public transportation.
Meanwhile, Germany is already in its second year of relatively strong growth, thanks to massive corporate restructuring aided by a dose of government reform. For the first time in a decade, surging exports are spilling over into the domestic economy, pushing down unemployment and encouraging consumer spending. "German companies' competitiveness is now comparable to the late 1980s, and that's paying off," says Andreas Rees, chief German economist for Unicredit Markets & Investment Banking in Munich. He predicts German growth of 2.6 percent in 2007, after unusually strong growth of 2.7 percent last year.
(Excerpt) Read more at spiegel.de ...
There was a time when German “surging” and “spilling over” was cause for concern.
Any change in economics is a lagging indicator of change of some sorts in political leaning, which lags a larger, more public leaning.
In other words, this change can only portend good things!
- Best of luck, and keep up the fight.
I like that Europe is recovering its senses but I would hate it if the Dollar was further depreciated by a surging Euro.
My word - that’s by far the highest risk for german economy.
I just read about china selling more Dollar Bonds then ever trying to diversify their reserves.
I hope the good ol’ green back can hold the strain.
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