German Economy: Back on Track out of Recession

The German economy still stands firmly on its feet, as reported by government officials of the country, as they spoke of a “small miracle” in the field of employment. This recovery, leads the labor unions to raise their demands as for years had come to agreement for minor wage increases. The largest economy in Europe has left the deepest recession of the postwar period in the second quarter of last month and a series of economic indicators recently revealed that it has developed a dynamic recovery rate, based mainly on exports.

“Our economy recovers its strength” stated in an interview to the Frankfurter Allgemeine newspaper the German Minister of Economy, Rainer Brounterle said. “We already experienced a small miracle in the labor market, and therefore we can legitimately hope that will soon become a bigger one”, he said. Brounterle statements come just one day after the official release of Union of Industrial and Commercial Chambers of Germany (DIHK) that SMEs’(small to middle businesses) in the country plan to create up to 100,000 new jobs by the end of the year as they left the crisis behind.

German industrial production has “leap” in the second quarter, while the business index rose last month at the highest levels of the past three years. Analysts polled by Reuters estimate that the German economy grew by 1.3 % in April – June period, compared with the 0.2 % growth in the first three months of the year. Additionally, as the German economy moves to higher levels, foreign demand gallops and domestic companies see their profits increase. This is what the country’s powerful unions are prepared to take advantage of and they plan to change strategy.

“In the new round of wage negotiations, we want to ensure that employees will have a fair share of the recovery”, Mr. Bertcholnt Huber – head of the IG Metal union – highlighted in an article in the Rheinischer Merkur newspaper. The IG Metal Union represents over two million workers in metallurgy market. The unions demands are supported by the German public, but also by the economists, who indicate that the recovery would be undermined if it will be depending solely on exports. The economists strongly believe that domestic consumption and the buying strength of the German citizens should also strengthen as the exports boom might not last for long.