Whatever way you choose to look at Germany it's hard to consider it as anything but central to Europe and the EU be it geographically, politically or financially, Germany's position in the heart of Europe is assured.
In a World that is suffering from a hangover caused by the easy availability of credit and the excessive consumption it encouraged, many economists are highlighting that Germany, with its traditionally restrained attitudes to spending, is likely to gain long term benefits from the current global credit squeeze.
For an investor wishing to find a safe location to invest their hard earned savings we feel that Germany offers the best medium and long term opportunities. The reasons for this include the following:
Germany's Economic Strength
Although the German Economy has contracted in Q1 2009 (by 3.6%) it still is Europe’s largest and the world’s 3rd largest Economy. Until c. 2007 the German economy had to endure the massive cost of reunification therefore it largely escaped the boom and bust economic cycle that we in the UK and Ireland now have to bear.
Germany's Manufacturing and Export Economy
Unlike the UK and Ireland, the German economy is still driven by its large manufacturing industry and as a result it has the capacity to "trade itself" out of a recession. This benefit has been gained largely by wage restraint and economies of scale. As the world’s largest exporter many considered that a German recovery would only occur on the back of a global recovery, however, with a population of over 82 million people, who by a distance are the largest savers in the EU (on average 18% of household income annually is saved), the country has the ability to increase consumption domestically to offset the expected fall in exports (-2.3% in 2009).
Government Financial Support
Recognising this the German Government introduced two economic stimulus packages in the form bank support, investments, tax relief for individuals and support for small businesses totalling a massive €81 Billion, by far dwarfing its neighbours France and the UK. An example of this was the introduction of a srappage scheme in Jan 2009. This had the immediate effect of car increased domestic car sales (up by 40% in March 2009, compared with Mar '08).
Germany will recover earlier than the UK and Ireland
The influential ZEW index of investor confidence (a survey on Germany’s most powerful businessmen) rose again in April 2009 for the seventh month in a row. The ZEW index is now at the same level it was in June 2006.The IFO indicator, a Key sentiment index, rose for the second consecutive month to 84.2 from 83.7 in April, adding to evidence that sentiment is again on the up in Germany. The survey "points to a gradual stabilisation of economic output at a low level," Economists see the index as a key leading indicator to gauge the future health of the economy.Both industrial orders and exports showed their first increases in March "We've probably just about reached the low point," commented German chancellor Angela Merkel.
Feel free to read our views on the German Commercial Property investment climate and the German Residential property investment climate within the pages of this website. We also like to refer out visitors to useful independent websites which provide up to date information about Germany, the German Economy and its future. Why not check out the following sites:
Destatis - The German Statistics office
Germany Trade & Invest - Germany Investment Agency
The Local - Financial, business and general up to the minute news in English
Deutsche Welle - A broadcaster of up to the minute news and opinion
EUBusiness - An online business information website
To download our detailed reasons for choosing to invest in Germany please click here.