Accidental Stimulus

The Unexpected Bonus

German industry continues to assert itself on the international stage.
  • Why it matters

    Why it matters

    Five years after the euro zone crisis began, the economic gap within the currency bloc hasn’t closed: Germany remains well ahead of its peers.

  • Facts


    • The euro fell to an almost nine-year low of $1.186 on Monday. Brent crude oil was down at $45.34.
    • Germany’s economy is seen growing at least 1.5 percent this year – likely more in light of the recent fall in oil prices and the euro.
    • Germany has maintained its share of global exports at around 10 percent over the last two decades, even as other industrialized nations have fallen behind.
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Germany doesn’t really need any help.

No other industrialized nation recovered more quickly from the 2008-2009 global recession. Europe’s largest economy is likely to continue growing at a stronger pace in 2015 and 2016 than the rest of the 19-nation euro currency zone, much of which remains mired in a trap of high public debt, high unemployment, low growth, and now possibly deflation.

And yet, help it will receive: Germany is now getting something akin to its very own stimulus program.

The plunging value of the euro, which hit an almost nine-year low on Monday, and an even stronger drop in global oil prices over the past few months, are likely to benefit Germany’s export-heavy economy more than most of its neighbors – those countries that really do need the help.

“Within Europe, Germany’s economy will benefit above all, as it exports an especially large portion of its goods to countries outside the euro area,” said Marcel Fratzscher, president of the Berlin-based economics institute DIW.

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