• Germany's news in English

Business leaders reject government econ policy

The Local · 24 May 2011, 15:48

Published: 24 May 2011 15:48 GMT+02:00

Facebook Twitter Google+ reddit

Angela Merkel’s government got poor marks in a survey of members of an ‘economic council’ closely associated with her own Christian Democratic Union.

The CDU Wirtschaftsrat, which boasts it offers its members the chance to help shape economic policy, asked 2,500 of its 12,000 members what they thought of different business initiatives.

Of those asked, 56 percent said they were less than happy or not at all happy, with the CDU’s economic policies. The CDU’s Bavarian sister party, the Christian Social Union was even less popular, with 60 percent of those asked saying they were less than happy or not at all happy with their policies.

And coalition partner the Free Democrat Party was shown to be even less popular, despite its tag of being business friendly – 76 percent of those asked said they were less than happy or not at all happy with their policies.

Yet the economy is performing well, and the closely-tracked Ifo index of business confidence has held steady after two months of falls, with growth broadening on stronger domestic demand.

The Ifo index was unchanged at its new level of 114.2 points as companies assessed their current situation positively and the research group adopted a new methodology that now uses 2005 instead of 2000 as the base year.

Analysts polled by Dow Jones Newswires had forecast a decline to 113.7 under Ifo's new accounting method, after peaking at 115.4 in February.

"The business cycle traffic lights still signal 'green'," an Ifo statement quoted president Hans-Werner Sinn as saying.

The data underscored improvement in the retail sector, which along with official statistics released earlier in the day pointed to a widening of German growth beyond the traditional export pillar.

"This should facilitate the sustainability of the recovery into the second half of the year and puts Germany in an enviable position among its developed world peers," noted Chris Williamson, chief economist of the Markit research group.

Among German retailers, "the business climate index has risen markedly. The business situation of the retailers has clearly improved," Ifo said. Two sub indices showed that the roughly 7,000 companies polled enjoyed better current conditions, with a reading of 121.4 points compared with 121.0 in April.

Expectations for the coming six months were "somewhat dampened" at 107.4 compared with 107.7, but remained positive nonetheless.

The poll was released after data from Germany's national statistics office showed that first quarter growth of 1.5 percent was based more on domestic demand than on the country's much vaunted export sector.

The first quarter jump from the last three months of 2010 surprised analysts and caused many to revise their 2011 German growth estimates up to 3.0 percent or more, compared with the official forecast of 2.6 percent.

Story continues below…

"The German economy will most probably show a better economic performance than the rest of the eurozone for some years," Commerzbank chief economist Jörg Krämer added.

According to Goldman Sachs economist Dirk Schumacher, economists expect the German economy to slow later this year, but "the May Ifo (reading) suggests that the economy is indeed only facing a moderation in the near term and nothing more."


The Local (news@thelocal.de)

Facebook Twitter Google+ reddit

Your comments about this article

19:08 May 25, 2011 by neunElf
It would be nice to hear some specifics of why business is unhappy with the governments economic policies.
Today's headlines
Long-vanished German car brand joins electric race
Photo: DPA

Cars bearing the stamp of once-defunct manufacturer Borgward will once again roll off an assembly line in north Germany from 2018, the firm said Wednesday.

Eurowings cabin crew union to strike all day Thursday
Photo: DPA.

UPDATE: A union representing cabin crews on Lufthansa's budget airline Eurowings has announced that strikes will last all day Thursday as ongoing contract negotiations continue to falter.

Hesse hopes to set example by building Iraqi orphanages
Refugee children in northern Iraq. Photo: DPA

The wealthy central German state of Hesse has set aside €1 million to build a school, family homes and an orphanage in northern Iraq, in an effort to help refugees there.

The Local List
10 German clichés that foreigners get very wrong
David Hasselhoff. Photo: DPA

Whether it be efficiency, humourlessness or a love of a certain Baywatch star, there are many cliches stuck in the heads of foreigners about Germany. But how true are they?

Fake Germanwings victim relative convicted in Cologne
A torn piece of metal at the crash site in 2015. Photo: DPA

A German court on Wednesday gave a woman a year's suspended jail sentence for posing as the cousin of a victim in last year's Germanwings plane crash and obtaining compensation offered by the airline.

Couple accused of torturing, murdering women go on trial
The so-called 'house of horrors' in Höxter where the couple allegedly tortured and killed women. Photo: DPA.

A couple accused of luring women to their village home with personal ads started trial on Wednesday over charges that they tortured and killed at least two of their victims.

After July attacks, govt drafts new video surveillance law
Photo: DPA

The Interior Ministry is drafting a law which will enable public spaces to be filmed for surveillance purposes as a reaction to deadly attacks in July, according to a newspaper report.

Merkel: murky internet giants distort perception of reality
Angela Merkel. Photo: DPA.

Chancellor Angela Merkel called on Tuesday for internet giants to make public their closely-guarded algorithms, claiming that they are not giving people diverse enough information.

Pegida leader 'paid court costs with group's money'
Pegida leader Lutz Bachmann. Photo: DPA.

The leader of the anti-Islam movement reportedly used money from Pegida's coffers to pay for two personal court cases, German media reported this week.

Anger as Berlin scraps Turkey concert on Armenia genocide
The Dresden Symphony Orchestra. Photo: DPA

Germany's foreign ministry Tuesday scrapped a planned symphony performance on the Armenian "genocide" in its Istanbul consulate, sparking accusations that it was caving in to Turkish pressure.

10 ways German completely messes up your English
Sponsored Article
Last chance to vote absentee in the US elections
Germany's 10 most weird and wonderful landmarks
10 things you never knew about socialist East Germany
How Germans fell in love with America's favourite squash
How I ditched London for Berlin and became a published author
12 clever German idioms that'll make you sound like a pro
23 fascinating facts you never knew about Berlin
9 unmissable events to check out in Germany this October
10 things you never knew about German reunification
10 things you're sure to notice after an Oktoberfest visit
Germany's 10 most Instagram-able places
15 pics that prove Germany is absolutely enchanting in autumn
10 German films you have to watch before you die
6 things about Munich that’ll stay with you forever
10 pieces of German slang you'll never learn in class
Ouch! Naked swimmer hospitalized after angler hooks his penis
Six reasons why Berlin is now known as 'the failed city'
15 tell-tale signs you’ll never quite master German
7 American habits that make Germans very, very uncomfortable
Story of a fugitive cow who outwitted police for weeks before capture
Eleven famous Germans with surnames that'll make your sides split
jobs available
Toytown Germany
Germany's English-speaking crowd