The Ifo institute in Munich released a report today showing a further drop in business confidence to its lowest level in 19 months, pushing the Euro below $1.30 today. The report cites oil prices, but the real reason is the labor market. Unemployment benefits in Germany are higher than average wages in most countries in Europe; As a result, 12% of German workers are unemployed. Or should we say on vacation.
Germany will grow less than 1% this year, the EU just over 1%. There are only two horses left in the race the US (4%) and Asia (8%).