Dubai crisis set to hit German industry
DPA/The Local · 28 Nov 2009, 12:35
Published: 28 Nov 2009 12:35 GMT+01:00
“We will see it clearly in orders,” Martin Wansleben, the German Association of Chambers of Commerce and Industry (DIHK) boss, told the paper. “Many businesses will be hit.”
The “permanent building site” of Dubai, the Arab emirate where debt-fuelled construction has gone at breakneck pace for more than a decade, had been an important market for any company that provided good and services to do with building, “from drill machines and excavators through to fittings and windows,” he said.
Furthermore, the psychological effect of the debt crisis in the Persian Gulf was “not to be sneezed at,” Wansleben warned.
“In the current unstable climate, every setback is dangerous. In this context, Dubai is an absolute bombshell.”
The news earlier this week that Dubai, a regional business hub in the Middle East, could not meet interest payments on its US$60 billion debt, sent share markets plunging around the world as investors panicked.
The German economy also faced other risks, Wansleben said.“With the greatest optimism, we still have to count on some setback or another hitting us.”
That included a further credit crisis stalling the rebound in Germany, Wansleben said. The progress of the American dollar also needed careful watching.
While economists say Germany’s economy and business confidence are recovering, it is still expected that unemployment will continue to rise amid the fragile international economic climate.