Is the Eurozone’s German engine now stuttering and backfiring?

Gloomy economic news out of EU’s largest economy – and not “because of Brexit”

The Eurozone’s economic powerhouse isn't looking in good shape - even beer sales are down

Imagine if the UK’s Office for National Statistics released its latest reports on industrial production and retail sales, and reported the following gloomy news :-

Brexit Facts4EU.Org Summary

Germany - June 2019 - Industrial production & retail sales

-1.5% - fall in industrial production on the previous month (price, seasonally and calendar adjusted)
-5.2% - fall in industrial production on the same month a year earlier (price and calendar adjusted)
-1.6% - fall in retail sales on the same month a year earlier (price and calendar adjusted)
-2.7% - fall in beer sales in the first half of 2019

Over three separate reports, the German federal statistics agency also stated :-

“In June 2019, production in industry excluding energy and construction was down by 1.8%. Within industry, the production of intermediate goods decreased by 2.0% and the production of capital goods by 1.8%.
“The production of consumer goods showed a decrease by 1.4%. Outside industry, energy production was down by 1.6% in June 2019 and the production in construction increased by 0.3%.”
“According to provisional data turnover in retail trade in June 2019 was in real terms 1.6%… smaller than in June 2018.”
“The beer producing and storing establishments in Germany sold 4.6 billion litres of beer in the first half of 2019. That was a decrease of 2.7% from the corresponding period of the previous year.”
- Germany’s official statistics agency Destatis, reports of 31 Jul, 01 Aug, and 07 Aug 2019

Are readers buying fewer BMWs and drinking less German lager?

Brexit Facts4EU.Org assumes that Remain MPs will explain away the weakening German economy by blaming Brexiteers for buying fewer BMWs and Audis, and preferring British brands of beer over German ones.

Alternatively they might choose to blame President Trump and his desire to redress some of the imbalance in tariffs between the US and the EU?

Or perhaps Remain MPs will point to the shaky global trade relations with China? On this last point we would just mention that the decline in Germany started before these latest problems with China began.

If the German engine stutters, the rest of the Eurozone is down to one cylinder

Germany’s economy is 44% bigger than the next-largest Eurozone economy, France. It dominates the Eurozone playing field.

Below is a chart showing the relative sizes of each economy in 2018, according to the EU’s official statistics agency.

Map of the Eurozone countries

The EU member states using the Euro as their currency are: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

Observations

Few ordinary voters are interested in the ins and outs of economic statistics. We hope that our quick synopsis of the latest figures out of the German federal statistics office – together with the context of the Germany economy’s position within the Eurozone – have nevertheless been useful.

Germany has a massive trading surplus with the UK. Right now this is looking in serious danger of being eroded, unless German industry exerts some influence in Berlin.

One thing which is not generally understood in the UK is that German industrialists have benefited enormously from the EU. It would not be unfair to say that their economic success has been predicated on the captive market represented by the EU’s Customs Union of 28 countries.

And the UK is their top customer, as we have shown in previous reports.

With other export markets for German companies now under threat, it remains to be seen whether the combination of declining sales globally, and the imminent prospect of losing the UK as a tariff-free customer, will produce a more pragmatic approach out of Berlin.

Finally, we hope we can persuade more readers to support us with a donation at this crucial time for Brexit. We only survive - barely - on public donations. Easy and secure donation methods are below and we individually acknowledge every donation we receive. Thank you.

[ Sources: Destatis - German federal statistics agency | Eurostat ] Politicians and journalists can contact us for details, as ever.

Brexit Facts4EU.Org, 08 Aug 2019

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Reader Comments 8

1. Enryte , Thursday, August 08, 2019, 06:52:

If the Eurozone is in trouble then we should not fall into the trap of delaying our departure from the EU. If we do delay, we will pay the price and Brussels won't give two hoots if it takes us down with them. Treat Brussels like it's treated us - with indifference. When we're out and the Eurozone is in free-fall, by all means lend a hand, but strictly on our terms and not on borrowed money.

2. Sydney Ashurst , Thursday, August 08, 2019, 07:21:

Despite all efforts to blame Brexit for the woes of the Motor Industry, it is not true as we have not left yet.
It is more likely to be Political pressure on the manufacturers to change to Electric vehicles, in the belief it will reduce global warming. The EU has directive 2009/33/EC and their Parliament’s environment committee has approved a proposal to enforce targets that would see, by 2025, car makers compelled to have 20 per cent of sales made up of full-electric vehicles, or ‘Ultra Low Emissions Vehicles’.
This ignores the fact the infrastructure of EV charging points does not exist. Nor is there a demand/desire from the Public to change to EV's.
As Elton Musk has found Tesla is structurally unprofitable as an automaker.

3. Sydney Ashurst , Thursday, August 08, 2019, 08:45:

Slightly different EU problem.
Markel created a migrant invasion, but Italy is fighting back.
The Italian government has adopted a new migration and security decree that could see migrant transport NGOs fined up to one million euros for bringing migrants to the country.

4. Chris , Thursday, August 08, 2019, 10:18:

This is off-topic, but it highlights how some Remainers have shifted from desperation to insanity.
From the latest Independence Daily 'Brexit Betrayal' article, and quoting from the Telegraph:
“He told an audience at the Edinburgh Fringe that if the Prime Minister refused to step down in the event of losing a confidence vote, Labour would demand that the Queen appoint Mr Corbyn instead. “I don’t want to drag the Queen into this but I would be sending Jeremy Corbyn in a cab to Buckingham Palace to say we’re taking over,” he said. David Starkey, the historian, said Mr McDonnell’s threat would amount to a “coup”, adding: “I’m afraid Mr Corbyn would be arrested. The disguise has come off John McDonnell – he’s a revolutionary communist.”
I think the men in white coats will be coming for McDonnell shortly. Either that, or he will be arrested for High Treason.

5. Andrew , Thursday, August 08, 2019, 11:06:

@ Chris. It is obvious McDonnell doesn't understand the Law. If Boris were to lose a NCM under the FTP Act (I think it is Section 2) there is a 14 day window. This is in essence the Nick Clegg blackmail clause. During that period a Confidence Motion can be laid, which cancels the No Confidence Motion. The Act does not say the incumbent has to resign. And if he did so he has to recommend to Her Majesty that x, y or z be summoned to form an administration. As McDonnell well knows Corbyn could never command a majority in the house, so there would be no point in the Queen asking him. Boris is right that he can sit out the 14 days at which point the dissolution mechanism kicks in. And Cummings is right that the date of any General Election is for Boris to decide, which if you do the sums (a week for washing up, and a minimum 25 day campaign as required by Law) could only really be the 24th (at a pinch) or the 31st October.

6. Chris , Thursday, August 08, 2019, 11:37:

To Andrew:
There's another excellent article today on ID from renowned historian Andrew Roberts, in which he spells out in detail what you have outlined:
https://independencedaily.c...
It's well worth a read.
Current thinking is that there will be a GE on 1st Nov, when we will be a free Country once again.
Thinks: Will the Remainers become Rejoiners, or maybe Rejoaners?

7. Adam Hiley , Thursday, August 08, 2019, 12:13:

I am not surprised Germany is in trouble with Shaky Merkel in charge like Theresa May She has outstayed Her welcome another thing is to thoroughly destroy the Labour Party if We are to have another election it's disgusting to see the odious duo Corbyn & McDonnell conniving with Sturgeon it is not up to Her to hold another Independence vote the British Government decides if there is to be another vote unlikely to be another one ever, We have the Remoaners refusing to respect the 2016 vote, now the SNP ignoring the no vote in 2014 these People are scum and a disgrace no democrats either

8. Ashamed to be a Conservative , Saturday, August 17, 2019, 06:06:

Comment 2, Sydney well said. Governments led by donkeys. First they encourage people to save the planet by buying diesel because it is more efficient in MPG. Now they tell you not to drive that dirty polluting machine aand you should go electric.
If you asked me I would surmise that all they have done is to be on the side of businesses and their products when it suited the narratives of the politicians. Nothing to do with the environment, pollution or anything else.

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