Germany's recovery will drive Europe

Germany's recovery will drive Europe

Although the United States of Europe does not yet exist, there is still a European economic datum that is under observation of individual states and of the world. This situation has always been driven by the German economy, considered a sort of engine of the Europe bloc. There Germany in other words, it continues to be considered the leading nation in the economic recovery of the old continent devastated by the pandemic. That's why i German data specials are observed and the signals coming from Berlin are read as announcements - negative or positive - for 2021. This is why, in full epidemiological wave at the end of the year and lockdown already active in Germany, the confidence indexes Germans detected in December were a positive surprise.

La recovery of the EU economy in 2021 appears more certain: how to read the results of the Germany?

It helps us to understand it the Ifo index which is a indicator that measures the confidence of German companies and is published monthly by the well-known and authoritative Ifo Institute of Munich which since 1972 does polls on the current economic situation and the next 6 months in about 7.000 exponents in the main sectors of the German economy. It is a "Market mover" much followed because it is considered thermometer the state of health of the first European economy. 

According to the Ifo index, "Overall, the German economy is showing resilience. Sentiment in the manufacturing sector has increased significantly and confidence in the service sector has made up ground. Companies in the affected sectors certainly have major problems and some of them may have to give up. Despite this, the repercussions will be limited and will not drag the entire economy along ”.

 

 A news positive given that the last survey concerning the services had hinted at pessimistic signs on Germany and, consequently, on itself Eurozone, overwhelmed by restrictions in this final year.

In a survey that was conducted from 1 to 17 December, so with most of the responses received in the first two weeks of the month, before the official announcement of a new and rigorous freeze on businesses ahead of the holiday season, confidence indexes have started to rise again. German companies hope in other words that Europe's largest economy will recover in the first half of next year. The indicator which measures expectations for the next six months it rose to 92,8 in December from 91,8 in the previous month.

The German nation has so far recovered better than many of its neighbors, thanks to its relatively greater dependence on industry, which has been able to adapt to the pandemic. The Germans are confident they can do it, although economists remain cautious.

 Also the President of the Bundesbank, Jens Weidmann, showed a cautious optimism, stating that "it is plausible to assume that advances in medicine and vaccines will allow for a gradual lifting of restrictions starting in spring 2021 and that the recovery can make its way".

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