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De Omnibus Dubitandum - Lux Veritas

Wednesday, August 17, 2016

The Real Weak Link in Europe

By Alex Alexiev

With some weeks now past since the event, the Brexit doom and gloom-mongers have taken a well deserved break from conjuring up the imminent demise of the U.K., the EU, and perhaps the world itself.  This may be an appropriate opportunity to consider whether or not there might be an even better candidate for such end-of-times prognostications: Germany.

On the face of it, this is surely preposterous.  Europe's largest economy, its most stable government, and the main if not only pillar of the EU and the euro is hardly a destabilizing factor, most would agree.  Germany may indeed be all of that, but only in comparison to the rest of the EU, which has been stagnating economically for a decade and is beset by major political instability and terrorism.  Since 2007, German labor productivity growth has been close to zero, while GDP growth has averaged a miserable 0.8% per annum, even as Germany's largest company, Volkswagen, is being prosecuted around the world for cheating, while its very symbol of stability, Deutsche Bank, has been called by the IMF "the biggest contributor to risk in global finance."..........Read more

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