German economy 'too weak' to kickstart EU growth[fr][de] 

A 6% drop in industrial orders and a 10.6% plunge in exports, combined with negative growth: thus appears the gloomy outlook for Germany presented by indicators for November 2008 released yesterday (8 January).

The sharp decline surprised many economists, who had expected just a 1.6% fall in orders. Instead, orders fell by 27.2% compared to 2007 figures. 

Particularly alarming for economists is the dramatic dive in exports from Germany, the world's largest exporting country. The 10.6% drop is the strongest decrease since the country's reunification in 1990, according to figures from the national statistics office. The data came to light just days after experts had predicted "downward development" but no major falls. 

Given the dearth of internal demand in Germany, the sharp plunge in exports will only serve to aggravate the crisis further amid shrinking sales to other EU countries. The country has officially been in recession since last autumn. Latest figures released yesterday recorded a decline in German economic growth of 2% of GDP during the final quarter of 2008. FT Deutschland reported a 10% drop in German exports for November 2008 in comparison to October. 

The crisis has also started to hit the German labour market. Unemployment rose by 100,000 last December, according to national statisics office figures. 

The government coalition parties are currently putting the finishing touches to a second stimulus package worth between €40 and €50 billion, which will be presented early next week. Experts estimate it could save up to 1.1 million jobs if it manages to stimulate demand in five key sectors: science, retail, catering, public health, automobile and construction sectors. 

In addition, the government is preparing a €100 billion fund to provide large German companies with liquidity should they run into refinancing difficulties, similar to the previous bailout package for the banking sector. Politicians from the left criticised the plan for fear that the monies would be allocated to the wrong beneficiares. 

German Chancellor Angela Merkel will meet representatives of small businesses today to discuss their financial needs, as well as protective measures for the sector.