German Exports: The EU Bites Its Premier Economy

Germany’s Federal Statistics Office issued numbers for June exports and imports. The results for exports to the “Member States of the European Union” might have been expected to be much worse than last year because the region is so economically damaged. However, exports to Germany’s neighbors did not dive, but they where down enough to show that the largest nation in Europe by gross domestic product has been pulled under further financially by the trouble around it. Exports to the “Member States” dropped 0.5% to 53.6 billion euros in June, compared to the same month a year ago.

At least the balance of the world, outside the European Union, continued a demand for Germany’s products and services. Exports to “third countries” rose 19.8% to 41.1 billion euros in June.

The health of Germany’s export economy continues to be a race between demand inside the EU and demand from elsewhere. The race to do well in the region is already lost. That leaves the world’s larger economies, particularly the United States, China, Japan, the United Kingdom and to a lesser extent Brazil, India and Canada. Most evidence is that the consumption in these countries has slowed, without exception. Germany can no longer rely on the what were relatively strong economies a year ago to help its maintain its GDP momentum.

There is already reason to be concerned that Germany will follow other EU nations into recession. The new trade data reinforces that.

Douglas A. McIntyre