Imported Risks

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Amid Global Crises, 100,000 German Jobs Said to Be in Jeopardy

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Sanctions were imposed against Russia following the downing of a Malaysian Airlines plane traveling over Ukraine.
  • Why it matters

    Why it matters

    Europe’s largest economy has been the only bright spot during the financial crisis in the euro-zone. Flagging German growth could drag down the rest of the Continent.

  • Facts

    Facts

    • Germany’s Chambers of Commerce lowered its export forecast for 2014 to 3.5 percent from 4.5 percent.
    • The same group now sees only 1.5 percent growth for Germany this year, versus its earlier 2.0 percent forecast.
    • Full employment is a possibility in Germany in the long term, but better integration of the work force and education reforms must occur.
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    Audio

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In times of turmoil, Germany’s economic excellence can prove to be a curse. With its dependence on exports, the country is uniquely sensitive to geopolitical crises.

According to a recent report by the Federal Office of Statistics, foreign trade played a significant role in the slight decline in economic output in the second quarter. In light of crises around the globe, on Thursday the Association of German Chambers of Commerce and Industry, known as the DIHK, lowered its prognosis for exports in the current year once again. Instead of a 4.5-percent increase, as expected at the beginning of the year, the group now predicts a 3.5 percent growth in exports “at best.”

That means “German exporters will be making about €11 billion ($14.7 billion) less than assumed,” said DIHK trade expert Volker Treier. “That puts about 100,000 jobs in Germany at risk.”

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