Business leaders reject government econ policy

German business leaders are unhappy with the current government economic policy, although the Ifo rating of general business confidence held steady for the first time in some months.

Business leaders reject government econ policy
Photo: DPA

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.

“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.”


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Sleep, seaside, potato soup: What will Merkel do next?

 After 16 years in charge of Europe's biggest economy, the first thing Angela Merkel wants to do when she retires from politics is take "a little nap". But what about after that?

Outgoing German Chancellor Angela Merkel briefly closes her eyes and smiles at a 2018 press conference in Berlin.
Outgoing German Chancellor Angela Merkel briefly closes her eyes at a 2018 press conference in Berlin. Aside from plans to take "a little nap" after retiring this week, she hasn't given much away about what she might do next. Tobias SCHWARZ / AFP

The veteran chancellor has been tight-lipped about what she will do after handing over the reins to her successor Olaf Scholz on December 8th.

During her four terms in office, 67-year-old Merkel was often described as the most powerful woman in the world — but she hinted recently that she will not miss being in charge.

“I will understand very quickly that all this is now someone else’s responsibility. And I think I’m going to like that situation a lot,” she said during a trip to Washington this summer.

Famous for her stamina and her ability to remain fresh after all-night meetings, Merkel once said she can store sleep like a camel stores water.

But when asked about her retirement in Washington, she replied: “Maybe I’ll try to read something, then my eyes will start to close because I’m tired, so I’ll take a little nap, and then we’ll see where I show up.”

READ ALSO: ‘Eternal’ chancellor: Germany’s Merkel to hand over power
READ ALSO: The Merkel-Raute: How a hand gesture became a brand

‘See what happens’
First elected as an MP in 1990, just after German reunification, Merkel recently suggested she had never had time to stop and reflect on what else she might like to do.

“I have never had a normal working day and… I have naturally stopped asking myself what interests me most outside politics,” she told an audience during a joint interview with Nigerian writer Chimamanda Ngozi Adichie.

“As I have reached the age of 67, I don’t have an infinite amount of time left. This means that I want to think carefully about what I want to do in the next phase of my life,” she said.

“Do I want to write, do I want to speak, do I want to go hiking, do I want to stay at home, do I want to see the world? I’ve decided to just do nothing to begin with and see what happens.”

Merkel’s predecessors have not stayed quiet for long. Helmut Schmidt, who left the chancellery in 1982, became co-editor of the weekly newspaper Die Zeit and a popular commentator on political life.

Helmut Kohl set up his own consultancy firm and Gerhard Schroeder became a lobbyist, taking a controversial position as chairman of the board of the Russian oil giant Rosneft.

German writer David Safier has imagined a more eccentric future for Merkel, penning a crime novel called Miss Merkel: Mord in der Uckermark  that sees her tempted out of retirement to investigate a mysterious murder.

German Chancellor Angela Merkel forms her trademark hand gesture, the so-called “Merkel-Raute” (known in English as the Merkel rhombus, Merkel diamond or Triangle of Power). (Photo by Tobias SCHWARZ / AFP)

Planting vegetables
Merkel may wish to spend more time with her husband Joachim Sauer in Hohenwalde, near Templin in the former East Germany where she grew up, and where she has a holiday home that she retreats to when she’s weary.

Among the leisure activities she may undertake there is vegetable, and especially, potato planting, something that she once told Bunte magazine in an interview in 2013 that she enjoyed doing.

She is also known to be a fan of the volcanic island of D’Ischia, especially the remote seaside village of Sant’Angelo.

Merkel was captured on a smartphone video this week browsing the footwear in a Berlin sportswear store, leading to speculation that she may be planning something active.

Or the former scientist could embark on a speaking tour of the countless universities from Seoul to Tel Aviv that have awarded her honorary doctorates.

Merkel is set to receive a monthly pension of around 15,000 euros ($16,900) in her retirement, according to a calculation by the German Taxpayers’ Association.

But she has never been one for lavish spending, living in a fourth-floor apartment in Berlin and often doing her own grocery shopping.

In 2014, she even took Chinese Premier Li Keqiang to her favourite supermarket in Berlin after a bilateral meeting.

So perhaps she will simply spend some quiet nights in sipping her beloved white wine and whipping up the dish she once declared as her favourite, a “really good potato soup”.