Germans spurn the shops

BBC News Online ^ | May 02 2003

[knighthawk]

Retail sales in Germany fell back sharply in March, below even the most pessimistic forecasts.

In real, or inflation-adjusted terms, sales dropped by 3% in March compared with February, and lost 4% on the year.

Analysts had been forecasting a drop of around 2.7% on an annual basis.

Increasing unemployment and anaemic economic growth conspired to keep Germans away from the shops.

The sales data from the Federal Statistics Office will alarm policymakers as Europe's biggest economy struggles to shrug off the effects of the downturn.

Gloomy outlook

In a sign of the pain that retailers are feeling, the German department store Ludwig Beck described 2002 as "the most crisis-ridden year yet experienced by German's retail sector in the post-war period".

Ludwig Beck was also low-key about any prospects of a recovery this year.

The sales figures are just the latest piece of economic data to highlight the problems facing the economy.

Last Monday, the Ifo index, which measures the business climate in Germany, showed an unexpected fall in April - dashing hopes of a surge after the end of the war.

The GfK market research group also said this week there would be no real improvement in consumer spending as long as companies kept laying off workers.

Consumer confidence has faltered for the first time in two decades, contributing to weak economic growth of 0.2%, the slowest rate in almost nine years.

Reform agenda

Last month German Chancellor Gerhard Schroeder won party backing for key economic reforms, but only after hinting that a rebellion might lead him to resign.

Mr Schroeder, beset by ongoing high unemployment and a stagnant economy, wants to start introducing the reforms next January.

The changes will include cutting benefits for the long-term unemployed and making it easier for employers to make people redundant.

It is hoped that a more flexible labour market will encourage companies to take on more staff.

[knighthawk]

Europe-list

If people want on or off this list, please let me know.

[Tacis]

There is no good reason for an American to buy a German car. For every desireable German car, the is an equally good car built in Japan and, for many brands and models, an equally good one built in the US.

Daimler Chrysler is a German owned company and while some of thier cars are built in the US, many components are built in Canada by members of the Canadian Automobile Workers Uunion (CAW).

If the US sales of German cars go down 5 to 10%, perhaps German unemployment will rise by even greater percentages.

[facedown]

And these guys want to lead the EU?

[knighthawk]

They maybe want it, but the French want that role already.

[Charles Martel]

Are the Germans not purchasing, or are a large number of the American servicemen and women stationed there sending a message to the Germans by keeping their wallets closed?

[PeoplesRep_of_LA]

Interesting perspective on the rather hopeless economic news.

Our press would be focusing on personal interest stories of people directly affected by loss of work/FEAR.

This story mentions Gerhard, but really doesn't personally attack his competence as an economic leader. Sympathy for the devil or sympathy for the authors ideology?

[facedown]

...but the French want that role already.

They deserve each other.

[knighthawk]

LOL!

[knighthawk]

The Germans. There is a large unemployment, and also because the pessimistic look on the economy, people keep their purses closed, waiting to buy that new car or kitchen next year or so.

[facedown]

Cool it Jaques, the cameras are on.

[The Great RJ]

Could the reason for the German economic malaise be that taxes are too high and people don't have enough disposable income to purchase more than the basics? Afterall wasn't Chancellor Gerhard Schroeder recently proposing a tax on savings? With dwindling individual savings, banks don't have money to lend for individual big ticket purchases or for new business start-ups or business expansions --furher slowing the economy. A recent article in Pravda actually referred to Germany as a "tax hell."

[knighthawk]

You are on a roll today!

(Chirac really looks weird)

[RJL]

They maybe want it, but the French want that role already.

You are exactly correct. Pull up a chair, sit back and relax, it's going to be a hoot to watch.

There is no way France, Germany, or Russia will allow either of their new allies to take a leadership position over the other two.

[Ranger]

If the EU wants to stimulate the economy with an aggressive monetary policy, how do they do it? Are there EU government bonds to buy to drive down interest rates? It seems the EU's monetary policy was designed to keep inflation in check, but may have a problem in a recession or deflationary period. Anyone have a thought on this?

[caisson71]

What will the Marxist Germans do with so much free time on their hands and no money to spend? Will they build and Army to "defend" themselves?

[BlazingArizona]

There is no good reason for an American to buy a German car.

Yes there is: an increasing number of German cars are being built in Third World locations, such as Alabama.

[Chewbacca]

I think they can fight deflation by increasing the amount of Euros they print.

Because the Euro is based on a floating gold exchange rate with relation to I think 15% gold backing.

Thus to increase the money supply and allow for further printing an associated rise in the value of the gold holdings is what is needed.

I think that is how it is supposed to work, but could be wrong.

[kitkat]

***The changes will include cutting benefits for the long-term unemployed and making it easier for employers to make people redundant. ***

They're finally figuring out that socialism does NOT work!

And we're talking about talking troops out of Germany. Maybe the German voters will wake up.

[Citizen of the Savage Nation]

(Chirac really looks weird)

Yeah, like, where's his other hand??