The Downturn Is Hitting Germany

A blog about business and economics.
June 22 2012 8:00 AM

The Downturn Is Hitting Germany

146591058
German Chancellor Angela Merkel speaks during a press conference after a meeting with Dutch counterpart at the Chancellery on June 20, 2012 in Berlin.

Photo by JOHANNES EISELE/AFP/GettyImages

Yesterday we saw that Germany posted its second straight negative-PMI month, turning in the worst performance by this measure of industrial outputin three years. Today the German business confidence index has also come down more than expected, this time posting the worst result since March 2010.

To be clear, the German economy is still in much better shape than Italy or Spain. But with Spain in a deep depression, recession conditions affecting Italy and France and the United Kingdom and the large developing nations of China, Brazil, and India all slowing down simultaneously how's an export kingpin going to stay afloat? In a lose political sense one could argue that some economic pain in Germany would be a good thing, reducing that country's sense that the inherent gritty determination of the German industrial worker somehow renders it immune to systemic economic problems. But the fact that a nation specializing in capital goods exports is vulnerable to shocks from abroad was eminently predictable so I'm not super-keen on the theory that German prosperity accounts for its political class' attitude toward the situation.

Advertisement

The good news, such as it is, is really that Angela Merkel has become diplomatically isolated with the International Monetary Fund and the governments of France, Spain, and Italy all urging a different approach. A veteran German politician told me months ago that Merkel's characteristic approach to the crisis was to hold off on making concessions until the last possible moment, and then fold and make agreements with no conditionality. It wasn't a compliment, but as a guide to the future course of things it's held up pretty well.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

History

Slate Plus Early Read: The Self-Made Man

The story of America’s most pliable, pernicious, irrepressible myth.

Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.

Mitt Romney May Be Weighing a 2016 Run. That Would Be a Big Mistake.

Amazing Photos From Hong Kong’s Umbrella Revolution

Transparent Is the Fall’s Only Great New Show

The XX Factor

Rehtaeh Parsons Was the Most Famous Victim in Canada

Now, journalists can't even say her name.

Doublex

Lena Dunham, the Book

More shtick than honesty in Not That Kind of Girl.

What a Juicy New Book About Diane Sawyer and Katie Couric Fails to Tell Us About the TV News Business

Does Your Child Have Sluggish Cognitive Tempo? Or Is That Just a Disorder Made Up to Scare You?

  News & Politics
History
Sept. 29 2014 11:45 PM The Self-Made Man The story of America’s most pliable, pernicious, irrepressible myth.
  Business
Moneybox
Sept. 29 2014 7:01 PM We May Never Know If Larry Ellison Flew a Fighter Jet Under the Golden Gate Bridge
  Life
Dear Prudence
Sept. 30 2014 6:00 AM Drive-By Bounty Prudie advises a woman whose boyfriend demands she flash truckers on the highway.
  Double X
Doublex
Sept. 29 2014 11:43 PM Lena Dunham, the Book More shtick than honesty in Not That Kind of Girl.
  Slate Plus
Slate Fare
Sept. 29 2014 8:45 AM Slate Isn’t Too Liberal, but … What readers said about the magazine’s bias and balance.
  Arts
Brow Beat
Sept. 29 2014 9:06 PM Paul Thomas Anderson’s Inherent Vice Looks Like a Comic Masterpiece
  Technology
Future Tense
Sept. 30 2014 7:36 AM Almost Humane What sci-fi can teach us about our treatment of prisoners of war.
  Health & Science
Bad Astronomy
Sept. 30 2014 7:30 AM What Lurks Beneath The Methane Lakes of Titan?
  Sports
Sports Nut
Sept. 28 2014 8:30 PM NFL Players Die Young. Or Maybe They Live Long Lives. Why it’s so hard to pin down the effects of football on players’ lives.