Currency Watch: German exporters toasting euro weakness

18th May, 2012 by Jeremy Cook

The publication of the latest growth figures from Europe highlights the great divide in the region.

While Germany has moved forward, with growth of 0.5% in the first quarter, Greece slipped by 6.2%, while Italy declined by 0.8%. All stirred together it means that the Eurozone did not grow at all during the first three months of the year.

Germany is an exceptional case of course, and if we look beyond the country’s significantly short term growth figure, the reasons why are fairly obvious. It is a country that has built up a fabulous reputation for providing the highest standards of engineered goods.

Naturally, these exported goods are made more and more attractive the weaker the euro gets and the cheaper they become. Germans may moan about being part of a monetary union with the bankrupt Greeks and the rest of the periphery, but you could argue (and you’d be right) that the biggest beneficiary of the single currency is in fact Germany.

These exports are also destined for more worthwhile places than most. Between a quarter and a third of Germany’s exports are defined as ‘extra-EU’ – i.e. going to countries outside the EU which, may be having a tough time themselves, but are nowhere near as hamstrung as some members of the EU.

Most are helped too by the high oil price at the moment; oil barons like Porsches and Lamborghinis (owned by Audi) not Peugeots and Saabs.

We must not mistake this economic strength for invincibility; however, as it is likely that company investment during this period may simply have been the rebuilding of inventories. Should the ‘ripple-effect’ of a Greek bailout trigger waves on the South China Sea, and not just the Mediterranean, then the shift in global demand will impact on all and sundry.

Unfortunately we have now got to a point where everybody needs to stop acting as they have for years and start acting like each other. German sensibleness must give way to extravagance; Spanish manana must switch to ahora and Italian unpredictability must morph into political security. When put that way it’s easy to become overly pessimistic.

I’m sure the Germans make something for that as well.

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to our newsletters

Job vacancies

Brand Ambassador – Santa Rita Estates

Santa Rita Estates
London or Hertfordshire but with flexibility to travel, UK

Sales Executive - Wine and Spirits Awards

The Drinks Business
Central London, UK

On-Trade Channel Manager

Delegat Europe Limited (UK)
London / Midlands, GB

Trade Marketing Analyst

Delegat Europe (UK)
London, GB

Key Account Executive

Delegat Europe Limited (UK)
London / Midlands, GB

Senior National Account Manager

Bibendum PLB
London, UK

ON-TRADE Sales Executive

Roberson Wine
London, UK

OFF-TRADE Sales Executive

Roberson Wine
London, UK

Judging Week Runners

Decanter World Wine Awards
ExCel Centre, London E16, UK

Sales Administrator

Les Caves de Pyrène
Guildford, UK

Retail Commercial Executive

Laithwaite's Wine
Theale, Berkshire

Wine Buyer

Conviviality Plc
Crewe, UK

Sales Account Manager - On-Trade

Berkmann Wine Cellars
Liverpool

Sales Account Manager - On-Trade

Berkmann Wine Cellars
M3/M4 corridor

Media Sales Manager - Hong Kong

The Drinks Business Hong Kong
Hong Kong

The Global Merlot Masters 2017

Deadline : 31st March 2017

The Prosecco Masters 2017

Deadline : 10th March 2017

db Awards 2017

Deadline : 28th April 2017

The Global Organic Masters 2017

Deadline : 3rd March 2017

Click to view more

The Global Sparkling Masters

the drinks business is thrilled to announce the launch of The Global Sparkling Masters

The Global Rosé Masters 2016

the drinks business is proud to announce the launch of the Global Rosé Masters 2016.

The Prosecco Masters 2016

Now in its third year, the competition will reflect the growth in popularity of this fresh and exciting sparkling wine from the picturesque regions of Veneto and Friuli.

The Global Pinot Noir Masters 2016

After the success of last year’s competition that judged over 250 wines from no less than 16 countries, the drinks business is proud to announce the third year of the Global Pinot Noir Masters

Click to view more