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Among Europe's most damaged economies, Germany leads recovery

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Among Europe's most damaged economies, Germany leads recovery
Photo: DPA
11:16 CEST+02:00
After Hungary, the financial crisis has damaged Germany more than any other European nation, but the country is also leading the way back to prosperity, a new study published by daily Die Welt found on Monday.

The Deka-Bank study compared the consequences of the crisis in 31 countries, looking at their strongest quarter before the crisis, and their weakest quarter since the outbreak of recession.

Worldwide GDP shrunk the most in Turkey, followed by Russia and Singapore. In the global context, Germany came in as the eighth most-damaged country.

The study found that the German economy shrivelled by 6.9 percent between the first quarter of 2008, when the economy was strongest, and the first quarter of 2009, when it was weakest.

By comparison, the Turkish economy shrunk by 14.2 percent across the same period, while the Russian economy shrinking by 11 percent, and the Singaporean economy by 9.9 percent as a result of the crisis.

Of the G-7 industrial states, Japan suffered the most, with GDP falling by 8.3 percent between the beginning of 2008 and the beginning of 2009.

Chief economist for Deka-Bank, Ulrich Kater, told the newspaper that these results could be explained by Japan and Germany’s reliance on exports, which made them particularly vulnerable to changes in global demand.

In contrast to Germany and Japan, damage to the US and British economies was less marked – despite the particularly devastating housing and banking crises in these nations.

“This reflects the fact that these states export less, and, in Britain’s case, hold services as a large part of the economy,” Kater told the newspaper. “The study appears to have created a league table of economic models: The greater the dependence on global boom, the greater the effects of the crisis.”

Measured by their size in proportion to GDP, the German economic stimulus package, at 2.6 percent, stands in the middle of the global scale. In comparison to other European nations, however, it is particularly large. According to this study, the biggest economic stimulus packages were in Saudi Arabia, Taiwan and China.

But Germany, along with France, appears to be moving out of crisis faster than other European nations. In the second quarter of 2009 both countries had the strongest economies in Europe.

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