The Berlin Update: 9th February 2013

by Ares Kalandides

My weekly pick of news from Germany. Today:

1. How Germany profits from the crisis

2. Decrease in real retail sales in Germany indicator for weak domestic demand

3. Germany’s shrinking towns

4. Legal action against the German surplus recycling mechanism

5. Third countries overcompensate export decreases in the Eurozone

6. Real wages have fallen since 2000

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1. How Germany profits from the crisis, Cicero, 21th january 2013

Reichstag_building_Berlin

“Financially: With investors fleeing from southern Europe in search for a “safe haven” in Germany, yields on government bonds have fallen to a record low. At 21 of the 70 auctions last year, the German federal government did not have to pay any interest to his creditors, but received a bonus.

Economically: Not only did the federal government pay lower interests, but also business got cheaper access to money. This increased their competition advantage over Italian and Spanish companies that suffer under a credit crunch.

Demographically: That was probably the biggest surprise of last year. Several ten thousand people moved from Italy, Greece, Portugal and Spain to Germany in search of work. While Eastern Europe still represents the largest number of immigrants, it is followed by the crisis plagued countries of Southern Europe. It is them who send skilled workers to Germany.”

http://lostineu.eu/the-winner-takes-it-all/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+lostineu%2Frfqp+%28Lost+in+EUrope+NEU%29

http://www.cicero.de/berliner-republik/deutschland-saniert-sich-auf-kosten-seiner-nachbarn/53182

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2. Decrease in real retail sales in Germany indicator of weak domestic demand, Querschüsse 31st January, 2013

Retail_Turnover

Germany: Seasonally adjusted real retail sales

The Federal Statistical Office once again reported on weak German retail sales, this time for the month of December 2012. The nominal retail sales in the original unadjusted data fell by -1.9% in comparison to the year before the unadjusted real sales fell by -4.7%. December 2012, however, had 2 selling days less than December 2011. Allowing for seasonal and calendar effects (Census X-12-ARIMA method) retail sales decreased is comparison to the previous month by 2.0% in nominal terms and in real terms by 1.7%.  Furthermore, these data document a prolonged weakness in consumption of households in Germany.  The seasonally adjusted and real retail sales are around 4.7% below the level of 2000 and to 4.9% of the year 1994.

http://www.querschuesse.de/deutschland-reale-einzelhandelsumsatze-mit-47-zum-vorjahresmonat/

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3. Germany’s shrinking towns, Der Spiegel, 1st February 2013

Growing (red) and shrinking (blue) cities in Germany.

Growing (red) and shrinking (blue) cities in Germany.

“While a graying population affects Germany as a whole — about 27 percent is over the age of 60, according to the Federal Statistical Office — rural communities like Altena have been hit the hardest. With declining birthrates, high mortality and younger families moving to cities, many residents in Altena wonder whether their town will survive at all.”

Read the whole article in Der Spiegel here: http://www.spiegel.de/international/germany/volunteers-help-save-germany-s-shrinking-towns-a-880352.html

More about shrinking cities in Germany can be found at the official site of the ministry: http://www.bbsr.bund.de/cln_032/nn_23470/BBSR/DE/Veroeffentlichungen/IzR/2009/7/GrafikenKarten.html#doc510286bodyText1

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4. Legal action against the German surplus recycling mechanism, Süddeutsche Zeitung, 5th February 2013

Givers and takers in the equalization payments. Aggregate figures since 1990. Source: Süddeutsche Zeitung

Givers (red) and takers (blue) in equalization payments. Aggregate figures since 1990. Source: Süddeutsche Zeitung

The German federal system is based upon equalization payments among surplus and deficit states, a particular case of surplus recycling inside a federation. With the disparities between regions growing, in 2012 only three states presented a surplus: Hesse, Bavaria and Baden-Württemberg. Now the former two are taking the case to the German supreme court, with a charge against the system.

Blog: http://wp.me/p1m7wX-1v3

http://www.sueddeutsche.de/politik/laenderfinanzausgleich-muenchner-haie-1.1591344

and also

http://www.sueddeutsche.de/wirtschaft/laenderfinanzausgleich-bluten-fuer-die-hauptstadt-1.1567367

http://www.sueddeutsche.de/politik/laenderfinanzausgleich-bayern-und-hessen-draengen-auf-radikale-reform-1.1588657

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5. Third countries overcompensate export decreases in the Eurozone, Die Nachdenkseiten, 7th February 2013

warenexporte Kopie

German exports increased significantly in the past year. This development however presents large regional differences. While deliveries to the Eurozone fell markedly, they increased significantly in the countries outside the Eurozone (third countries) as the table shows.
Particularly dynamic over the past nine months were exports to the United States, to South and East Asian emerging markets and Japan. Exports to the United Kingdom and Russia with growth rates of nearly 12% have also had a positive development. What declined, however, were exports to the rest of the Eurozone. Exports t0 the southern European countries in crisis, recorded decreases between 8 and 14%.

http://www.nachdenkseiten.de/?p=16106

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6. Real wages have fallen since 2000, Hans Böckler Foundation, February 2013

The development of income. Top graphic: Income from profit and assets (red), employee income (orange). Lower graphic:   Collective agreements (red), gross wages ( orange).

The development of income. Top graphic: Income from profit and property (red), employee income (orange). Lower graphic: Collective agreements (red), gross wages ( orange).

Real average gross wages per employee (i.e. after deduction of price increases)  in Germany fell by about 1.8 % between 2000 and 2012. Increases of the past three years in which real wages grew by 1.2 to 1 and 0.6 %, have not yet compensated the significant previous losses. Collective wages and salaries have developed better. They were 6.9 % higher (in real terms) in 2012 than in 2000. Property income and corporate profits on the other hand have increased enormously since the turn of the millennium:  Between 2000 and 2012 they nominally increased by around 50%, despite a temporary downturn in the economy crisis in 2009. At the same time nominal wages and salaries grew by only about 24%.

http://www.boeckler.de/42128_42150.htm

About Ares

Ares Kalandides holds a PhD in Urban and Regional Studies from the National Technical University of Athens. He is the founder and CEO of Inpolis, an international consultancy based in Berlin, Germany and has implement several projects around the world. Ares teaches Urban Economics at the Technical University in Berlin and Metropolitan Studies at NYU Berlin.
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One Response to The Berlin Update: 9th February 2013

  1. Thanks for this Ares – it;s good to have this information available to me in English 🙂 – especially real estate and retail info –

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