From The Economist

February 6, 2019

THE WORLD is used to a thriving German economy. A decade ago, during the financial crisis, it shed relatively few jobs, as unemployment soared elsewhere. Since then it has been an anchor of fiscal stability while much of the euro zone has struggled with debt and deficits. Its public debt is below the target of 60% of GDP set by EU treaties—and falling. Thanks to labour-market reforms introduced during the 2000s, Germans enjoy levels of employment that beat even job-friendly Britain, though inequality is barely higher than in France. Its geographically dispersed manufacturing industries, made up of about 200,000 small- and medium-sized firms, have mitigated the regional disparities that have fuelled populism across the West.

Yet the German economy suddenly looks vulnerable. In the short term it faces a slowdown. It only narrowly avoided a recession at the end of 2018. Temporary factors, such as tighter emissions standards for cars, explain some of the weakness, but there is little sign of a bounceback. Manufacturing output probably fell in January. Businesses are losing confidence. Both the IMF and the finance ministry have slashed growth forecasts for 2019. In the longer term, changing patterns of trade and technology are moving against Germany’s world-beating manufacturers. On February 5th, in response, Peter Altmaier, the economy minister, laid out plans to block unwanted foreign takeovers and to promote national and European champions.

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Link to full article in The Economist