German Economy Still Dead

German Economy Still Dead

April 25, 2005

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%).

JR

John Rutledge

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