Euro zone growth grinds to a halt as German economy contract

Oh oh spaghettio

irishtimes.com/business/econ … -1.1896780

But the ECB dropped the rate to 0.15%. Surely that did the trick… :unamused:

Doom mongers!

Esselte
whats your take?

They’re confirming what’s been known for weeks so it’s not really going to catch anyone by surprise

I remember a time on here when many were predicting that Germany would hit recovery mode before Ireland and that would lead to disaster for Ireland as interest rates would be hiked when we needed them to stay low
Now the reverse is happening, Germany is stalling while Ireland’s recovery gets going and that’s met with consternation on here too.

40% of our trade goes to the EU so it would be nice to see some positive signs there, however 60% goes outside the EU, 20% to the US and 20% to UK (approx). A weak Euro will help our trade with the US and UK nicely. Clouds and silver lining and all that. Anyway, based on the way some people on here fall over themselves to tell us of the marvels of Germany, I’m confident that Germany will be up and running at full steam again pretty soon. Hopefully not until a hike in interest rates won’t hurt us so much though.

+1 Esselte. People need to decide which side their bread is buttered on.

This increases the chances of QE, isn’t that something Ireland wants given our rather sizeable debts?

maybe, finally, people realising that rate cuts are not the ammo that they’re made out to be; and that the monetarist morons at the ECB haven’t got a fcuking breeze what they’re doing . . ?

QE in the Eurozone is different to QE in the UK/US/JP - it would be more effective, yes.


As outfitter to China, Germany would be more affected by than most in Europe.

Germany with its Mittlestand grinding to a halt, Ireland with a housing boom, new car regs surging. All we need us Chuckles McCreevy to deliver a lecture on Economics to the Grmans and its 2005 all over again baby!

I suspect a lot of the German pause is Ukraine, Russia related but let’s pull the Green Jersey on anyway

Or Ireland is coming off a low base and Germany trying to sustain a very high one?

ORLY?

I don’t see a rational basis for that. Still, if debt financing hasn’t worked anywhere else, who’s to suppose that it won’t work in the eurozone :neutral_face:

Ze German Demographics versus De Oirish One.

European stock markets rallied on the news of the slowdown, following the nutty logic of the last few years that a faltering economy means more gubmint stimulus is coming. 8DD

German growth should prompt ECB into action

irishtimes.com/business/econ … -1.1897381

GDP figures not worrying Germany

irishtimes.com/business/econ … -1.1897345

What action can ECB take at this point? QE? Rate to 0%?

They can buy USTs, forcing the US to watch the Euro depreciate or retaliate by buying Euro govt bonds.

voxeu.org/article/ecb-should … tervention

Discussion from April of the more conventional options:

forbes.com/sites/francescopp … euro-area/

The basic problem is that you can’t deleverage everyone (banks, households, govts) at the same time without depressive effects.

IMO Germany isn’t really the issue, they can cope short term with stagnation. Spain is like a big Ireland and will possibly follow the same path to sorting itself out. Italy is the elephant in the room - they don’t have a housing/construction bubble to blame for their economic woes.

I wonder could someone send us a postcard from the alternative universe where an Irish exit of the EU in Icelandic fashion just to have a nosey at the comparative growth rates of both economic zones in that scenario.

Just a thought.

Yep it is different basically because the BOE/FED/BOJ are direct arms of the sovereign, so QE is just moving money from your right pocket to your left pocket. . . . . whereas the ECB is not an arm of the Irish Treasury for example - so QE has a different impact. Most people of course just think moooney printing so don’t get the functional differences, which are pretty critical. Perhaps a better way of explaining it would be that QE actuated by the ECB is more like the Fed buying Municipal debt in America rather than Federal debt, so it is a different form of QE and has a different impact.

Personally, I think QE in the Eurozone would slightly improve the real economies of the peripheral which would (contrary to popular view) strengthen the Euro, which then (because of the insane export obsession) would just start to slow the economies all over again. Bottom line is that if the biggest member of your currency union stupidly insists on pursuing relentless, mercantilist, trade surpluses then you have no way of getting out of the stagnation until the rest of the world starts growing significantly.

mmm. I would have thought that monetarist would be in favour of QE. Do the ECB morons need another moniker?

yes, they see QE as the next step when at zero bound; monetarism is so disproved at this point it’s embarrassing.