Look at the global economy, not just Brexit
While the Remainers tell us the UK economy is suffering because of Brexit, one has to assume therefore that the German economy for example is racing ahead with the benefit of its EU powered motor.
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How many times have we heard that the UK economy is suffering because of Brexit fuelled uncertainty.
That our lack of strong GDP growth is down to investment, workers and jobs all relocating to the EU where the grass is green and the honey flows.
But all is not well in the EU27 and the Eurozone.
Just look at its main engine room, the German economy.
The BBC says that it has slipped back into negative growth, the Express claims it is on the brink of recession, the FT reports it has shrunk by 0.1%, CNN Business says the German ‘golden decade’ has come to an end and Deutsche Welle says the slowdown is a warning signal.
And the main problem for germany is a slow down in exports, which for a country that relies heavily on exports is obviously not a good thing.
The big drivers here, say pundits, are troubles in the German car-making industry, the effects of the ongoing Sino-US trade war and of course the ever blamed Brexit uncertainty.
Now, I can understand the first two, but the Remainers and Brussels always claimed that Brexit would have little to no effect on the EU, especially the Eurozone. It was the UK that would fall apart, not them they said.
But this matter of the auto industry does feature heavily across the piece – and CNN Business called the global decline in demand for cars a core issue for Germany.
Now, while the German economy did contract a little, the Eurozone as a whole did expand, but only by 0.2%.
But this shows, says the FT, that Germany has gone from being a European powerhouse to being one of the region’s laggards.
And Carsten Brzeski, chief economist at ING, is quoted by CNN business as saying that this GDP result “definitely marks the end of a golden decade for the German economy”.
And he also said that “Increased uncertainty, rather than direct effects from the trade conflicts, have dented sentiment and hence economic activity”.
But wasn’t the idea, that the massively powerful EU would shield member states and their citizens from the actions of the likes of the US and China?
You do have to wonder, if having such a top heavy system controlling the economic activity of such diverse nations as exist within the EU is such a good thing after all, don’t you?
Now, the last thing the Eurocrats need right now is for the Germans to have a change of sentiment towards the EU isn’t it.
So I would bet the European Central Bank is ready with more stimulus measures like cutting its already low rates and buying more bonds up – something commentators are predicting for next month.
But I will also point out that the ECB deposit rate is already negative so banks have to pay to hold money in its vaults, also that Germany and Sweden recently issued bonds with a negative yield so investors get back less at the end than they paid for them and one Danish bank has taken to selling mortgages with a negative interest rate – yes you borrow to buy a house and pay back less than the bank loaned to you.
These are not what I call healthy economic indicators.