Germany is facing new optimism and economic growth. However, the reasons seem to be irrational.
During the past years, Germany, former engine of Europe’s economy for decades, suffered from high unemployment, elevated national liabilities and a trend for outsourcing. Important German companies had been moving to countries where taxes were lower and the German people were generally frustrated, pessimistic and afraid of the future. The European Commission complained about bad German economic policy asking for a quick and comprehensive change. Little by little, our country moved from the head of the caravan of communities with an increasing economy, to the tail.
But now things seem to have changed. To be honest, 2006 has not seen any major changes, as in previous years, but what we are starting to observe is the influence of illusions on peoples’ mentality, behaviour and opinions.
The change became visible at the end of last year. In autumn 2005 the Germans elected a new parliament and as no one party was clearly going to obtain a majority, the Social Democrats and Christian Democrats built a large coalition. Following this, Angela Merkel was elected as the first female Chancellor, which is quite remarkable in our country with its traditional conservative values.
In her election campaign, Mrs. Merkel had promised many reforms; she had told the German people that they would have to be ready for change and even cuts in social standards. But since the new government is in power, very little has been done. The Chancellor has even changed direction in many important areas of political policy, partly driven by the Social Democrats, but people seem to like this style of policy which is now prevalent in Germany. The whole government, and the Chancellor in particular, have had the best opinion poll results ever.
Everyone – except the parliamentary opposition – seems to be satisfied. Employees, employers, trade unions, importers and exporters, nearly everybody praises the Government. New, optimistic points of view seem to have conquered the minds of millions of people. Following this change, which in many ways is only based on illusions and wishful thinking, the economic situation has actually turned out to be a little bit better.
Even the retail business has improved. The Hauptverband des Deutschen Einzelhandels (HDE), the National Association of Retailers, published the results of a poll which show that the business barometer confirms a ‘turn in the trend towards the positive.’
‘Since the change of government, the positive indicators are rising faster than expected. Hope has replaced frustration, even in the watch and jewellery retail business after years of stagnation,’ states the monthly jewellery trade magazine U.J.S. continuing, ‘The statistics haven’t looked so good in ages, when you compare the 2006 monthly figures to the same month of the previous year - as in March 2006. Also the figures in the first quarter of this year are positive and are turning out to be much better in comparison to the same period of 2005, and especially when compared to the decrease in turnover that has been the case for years.’
In fact, Germany’s economy in total increased 0.8 percent from January to the end of March, which does not actually seem to be such a high increase. Although the figures from the watch and jewellery sector have been most impressive. During the first quarter of 2005, shop owners faced a decrease of four percent during the first quarter. When compared to the month of March 2006, surprisingly an increase of eight percent could be seen and an average increase of two percent has been recorded from January to March. This is particularly remarkable because the figures at the beginning of this year gave no reason for hope in terms of the economy.
One event that seems to be one of the reasons for this new optimism is the Football World Cup, which is taking place in Germany this year. There is literally no sector that isn’t currently referring to football. There are bargain sales in nearly every store due to the World Championship. Not only are T-shirts and sports clothes being sold under the FIFA sign, but also food, furniture, cars, fashion or electrical equipment, nearly everything you may need or not need. – Enjoy your ‘World Cup sausage’ at your ‘World Cup snack bar’ and save money using the ‘World Cup sales’ at your local car dealer!
So, Germany seems to be on a good track after years of decline. It doesn’t really matter, what the reason for this better mood and optimism is.
It may be better policy, football or simply illusions – we are just happy that it’s here!


Source: Europa Star June-July 2006 Magazine Issue