The port of Hamburg is the hub of Germany's export economy. It's a good place to measure Germany's economic pulse. Some 1.8 million containers were handled from April to June. That was up a little from the previous quarter, but at the start of the year the increase stood at 5 percent. Now growth is only 1.5 percent. It's not hard to notice that business is not as good.
Within a month, the situation for German industry has dramatically declined. This is evident in the figures alone. London-based researcher Markit surveyed 500 companies with sobering results: production has already been cut back severely; for the past thirteen months, companies have received fewer orders. Similarly, the current indicator of business expectations of the Center for European Economic Research (ZEW) in Mannheim is down for the fourth consecutive month. The latest financial statements for BMW, Deutsche Bank and Siemens suggest they, too, have already been affected by the euro crisis.
Good news doesn't sound like this. The debt crisis has now hit Germany. At first, the national economy managed to cope with the sharp economic decline in 2009, in which economic performance declined by five percent. Worldwide, warehouses were empty and following the Lehman shock, investment was necessary. This helped German manufacturers of machinery and other capital goods. Production also couldn't keep up with demand in the automotive industry, especially with high-priced luxury cars. The full order books are still enough to cushion the bumps of the recession. That's the reason there's still a small amount of growth.
All this is not surprising. For European customers who purchase German goods, the money is slowly running out. Everywhere, but especially in the south of the continent, the huge debt burden is crippling growth. Until now, that could be compensated by global demand, in particular from Asia. However, the global giant - China - is now also weakening, and India's government is driving foreign investors out of the country. Brazil's economic boom has also lost much of its momentum. And America can think of nothing better to do than point the finger at the Europeans, instead of reviving their own economy and reflecting upon their own huge mountain of debt.
Bu that is not to deflect from the fact that Germany is needed. The government's intransigence in addressing the euro crisis will have dramatic consequences for the German economy. It is not enough to simply that others do their homework, and to emphasize that German taxpayer cannot pay for the sloppiness of debtor nations. Sharing the economic burden of the euro debt crisis among all Europeans is certainly not the silver bullet. What we need is a new European economic policy, a new monetary union.
The current imbalances will blow Europe apart. The deteriorating economic outlook is just a first small pointer. But there is still time to repair the damage. But the situation must be addressed decisively. And that is what is needed right now.