Europe’s steel foundation: German economy still going strong
Data from Eurostat released today showed 0.7% growth in the German economy from the first quarter. Germany’s growth was only beaten by Portugal with an additional 0.4%, and matched by Finland and the Czech Republic. The combined efforts of these countries offset the negative growth in Bulgaria, Spain, Italy, Cyprus, the Netherlands and Sweden to give an aggregate growth of 0.3% in the EU.
Compared to figures from the previous years, the last four quarters showed comforting growth patterns for Germany, with the exception of the deceleration in the the first quarter of this year. The figures are not so kind to Cyprus, on the other hand, which has replaced Greece in the bottom ranking beating its -4.6% with a -5.2% growth in the second quarter compared to last year.
With the German elections scheduled next month, chancellor Angela Merkel is taking the opportunity presented by the growth to express intentions of tax cuts should she be re-elected. The opposition Social Democratic Party (SDP) have taken the complete opposite stance, promising to increase taxes on the wealthiest within the population as well as introducing a minimum wage. Merkel’s tax cut has settled better in the opinion polls, but there is a general agreement that a minimum wage should be introduced as well. The European crisis ignited by the Greek crisis has left a bitter taste in the German voter’s mouth, but the cynicism does not seem to transform into a want for change. The latest opinion poll that sampled 2500 voters showed 54% support for the chancellor, compared to almost half of that to the opposition SDP leader. If the competition remains strong between just these two candidates, we may witness an easy win to reelect Europe’s Iron lady.
*The report does not include GDP figures for: Denmark, Ireland, Greece, Croatia, Luxembourg, Malta and Slovenia.
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