“Can the Germans beat fear and pessimism to create growth?”

Dear Followers,

If we can believe what the Bild, the Deutsche Welle and Die Welt, three German news mediums of different intellectual level report, the German economy has reached the troph and will come back and return to growth in 2010. The question regarding current circumstances is if they are trying to create a more positive vibe about the future of Europe’s biggest economy or “Is Germany actually coming back?”

According to an article from Die Welt which is a very serious and intellectual German business newspaper that could be compared to the financial times on an international level, there are factors that would cause upswing as well as there are problematic influences. They also report that according to leading German business institutes one can expect an economic growth of 1.2% in 2010 after a decline of over 5% in 2009.
The factors that make economic growth more difficult are that unemployment will continue to increase over 2010 and that they expect an increase in energy prices which will make households expenditure more cautious.
On the other hand there still are low interest rates and cheaper credits which will encourage business and spending. The worldwide economy is expected to grow again which in the long run will have a positive influence on German exports which are still of very high importance for the national economy.
On their homepage Die Welt also has a poll where the readers can vote if they believe in the return to growth in 2010 where the result for 68% of the readers was negative.
This in my opinion is not really helpful since the growth of an economy is caused by the people in it.
“Don’t we have to believe in growth to cause it?”

http://www.welt.de/wirtschaft/article4855242/Regierung-rechnet-mit-1-2-Prozent-Wachstum-2010.html

The Deutsche Welle which is a purely informative radio station and homepage about news for Germany published an online article which is a lot more pessimistic.
They report that the major factor for Germany being in this “sharp recession” is the high, increasing, unemployment which currently is at 8.5% but expected to increase by another 2%.
They say that the decline will be of more than 6% for 2009 but they also give a prediction from the German Central Bank which is 0.5% growth in 2010.
Overall the situation according to them seems difficult regarding the main factor unemployment but the long run outlook is better which is also caused by a falling level of inflation.
What they are very realistic about, is the worry I have as well reading the article because the question;
“Can we have a change from negative to positive growth when the unemployment rises another 2%?”

http://www.dw-world.de/dw/article/0,,4306735,00.html


Die Bild which is more comparable with the English Sun and could therefore better be described as a tabloid paper reports that leading business institutes predict a growth of 1.3%. They also make very clear that we have not made it yet and that this is a prediction in a very uncertain and shaky situation which makes it hard to predict anything at all. The major problem as stated by them is also the level of unemployment in the economy which they see with continuous growth. The advantage they see for the German economy is that the Asian countries will recover soon which will help the level of Exports which still is the strongest level of income for the German economy.
One point they also have mentioned which has to be taken into account is that the German State as such will have to deal with extremely high deficits this year which also causes difficulties and will spread a kind of “sour” mood in the business environment.
“Can we somehow think positive?”

http://www.bild.de/BILD/politik/wirtschaft/2009/10/12/diw-prognose-1-komma-3-prozent/wachstum-2010-kein-grund-zur-euphorie.html


All three articles more or less share the same opinion. They report that institutions are projecting and expecting a small level of growth and therefore a return of the German economy in 2010, but they also clearly address that there is a number of problems that cannot be underestimated. Whereas Die Welt and the Bild are real descriptive and story like articles, which are on completely different intellectual levels though, the Deutsche Welle article is more of a factual report.
There is no form of bias in any of the articles but in every single one of them the reader can identify a very high level of doubt about the information that is being reported.

I personally can only rely on the information I get from media since I have not been in Germany for quite some time and can therefore hardly experience the national economic climate myself. The problems and difficulties I just see is that, other than the British for example, the Germans are rather cautious about their spending and like to save up money and be financially secured. This is why another increase in the already high unemployment will cause further worries for members of the economy and will heavily discourage spending.
My personal judgement from how I see the situation is that Germany could have growth in 2010, but it would have to be caused from abroad and by exports since the level of negativity and discomfort for the German people are currently too high to change the situation themselves.
The question that remains in my opinion is not if Germany will have growth, but
“Can the Germans beat fear and pessimism to create growth?”