German businesses had a little reason to hope that trade with countries outside the European Union would keep the export economy growing, and that low unemployment and high wages would sustain imports. Neither of these has turned out to be true. Germany’s import and export figures for April were awful. The largest economy in Europe has begun a slide that it can no longer avoid despite its weblike connections to the region.
For April, the Federal Statistical Office (Destatis) reported: “Upon calendar and seasonal adjustment, exports decreased by 1.7% and imports by 4.8% compared with March 2012.” A closer look at the numbers shows the extent of the damage from troubled euro area states. Exports to that group fell 3.6% to 33.1 billion euros. Exports to “third countries,” those outside the alliance, rose 10.3% to 36.7 billion euros. But slowdowns in the economies of China and the United States are likely to cap any further advance in the advantages of “third country” trade.
Germany clearly has been ambivalent about its membership in the euro area, or perhaps, alternatively, the memberships of Greece and Spain. No matter what its political leaders say in public, there are private rumblings that the exit of Greece from the alliance would not much hurt Germany’s businesses, or even its banks. The public is strongly against further investment in the economies of countries that it believes have caused their own problems by years of profligate spending and state support of a large number of citizens. Now, German voters can add to those objections that, with their own economy slowing, the act of putting tax dollars into bailouts is unacceptable.
Angela Merkel has resisted efforts to create eurobonds, despite pressure from Germany’s neighbors and the United States. She continues to say that weak economies in Europe can still dig themselves out of their own problems. Her resolve likely will stiffen as her own country’s economy sputters. She likes her job too well to put outside interests above those of her own nation.
Douglas A. McIntyre