German Economy Surges Ahead With Most Growth in Decades

Second-quarter GDP figures saw the biggest leap since reunification

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The U.S. economy may be struggling, but Germany is charging ahead with extraordinary speed, reporting 2.2% GDP growth in the second quarter. Here's the first round of analysis, focusing on the significance of this growth for Germany, the U.S. and the eurozone:

  • 'Turbocharged Germany'  J.O.S. at The Economist's Free Exchange blog writes early from London that "the German figures, the best since reunification almost two decades ago, meant that the euro-area economy had a good quarter, too." Germany's success, he notes, "owed a lot to a surge in exports (much of it to emerging markets) ... Germany's talent for bespoke engineering and sleek cars fits well with the needs of fast-industrialising countries and their new middle classes." While America's continued weakness should be "a warning to Europeans that the global recovery is not secure," he concludes, so too should this German success "comfort Americans. ... If German exporters are thriving, it means that someone out there in the world economy is still spending freely."
  • But Southern European Trouble 'OvershadowsPeter Boockvar at The Big Picture notices that the European bond markets remain lousy, largely because of the "weakness in Southern European debt."
  • Good or Bad News for Eurozone?  "The market's reaction to Germany's strong GDP number is very interesting," remarks Business Insider's Joe Weisenthal, watching the German stock market plunge, "as it perhaps dawns on folks that the structural issues are as raw as ever." Elsewhere, he wonders whether Germany's strong performance could plausibly be considered bad, rather than good, news for the eurozone. Explains Weisenthal:

In a sense, it clearly re-emphasizes the fears from a few months ago: that the eurozone doesn't make sense.

This news comes a day after Greece reported GDP that was worse than expected. It's obvious that when it comes to currency and monetary policy, the interests of Germany and the periphery could not be further apart.

This article is from the archive of our partner The Wire.