Mike DeLucchi's Blog

A new, turbocharged german economy is prospering, largely due to the exports in the automobile industry. “Figures released on August 13th showed that the German economy grew by 2.2% (an annualised rate of close to 9%) in the three months to the end of June” (The Economist). Along with the new middle classes emerging from fast-industrializing countries, comes a need for a car with renowned performance and reliability. Germany is the prime candidate to supply these vehicles, and a country like China is the perfect customer for these cars. This is has enabled the sales of Mercedes Benz to triple this past July, and double in India. Also, the sudden surge of business has resulted in newfound job requisites. Prior to the automobile industry crisis, Germany’s unemployment level was rising. To keep employees, firms had to use a short-time working scheme and flexible hour system. However, the need for jobs has required the firms to draw back employees to full time work far earlier than they had hoped. In turn, this has led to a higher unemployment rate than it was previous to the crisis. In my opinion, Germany must continue to increase its focus on Asia and India, which will open up jobs requiring specialization in a model that fits their needs. Hopefully for Germany, this will lead to more spending at home, which will in turn, have a positive effect on the GDP.

See the full article here: http://www.economist.com/blogs/freeexchange/2010/08/europes_economies