Friday, May 13, 2011

Investing in unproductive assets causes poor economic performance

UK left behind as French and German economies surge

Germany grew by 1.5% and France by 1% in the first quarter – compared to Britain's 0.5% Growth in the German and French economies has surged thanks to strong business investment and consumer spending, in the latest sign that the UK is failing to keep pace with other developed countries. Germany, Europe's largest economy, grew by 1.5% in the first three months of the year, smashing all analysts' forecasts, while France, Europe's second-biggest economy, expanded by 1%, also better than expected. This compares with UK growth of just 0.5%, following a drop of the same size in the fourth quarter of 2010, which prompted a warning from government statisticians that underlying growth was broadly flat.

Posted by khards @ 10:18 AM (1497 views)
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4 thoughts on “Investing in unproductive assets causes poor economic performance

  • These countries (the Eurozone) are our biggest trading partners. It is very much in our interest that they do well. The exchange rate is also slightly in our favour, so all things being equal, we’ll benefit from their growth

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  • If I recall correctly 4 or 5 years ago the German economy was widely regarded as a “basket case” due to growth rates lagging behind the likes of Ireland, Spain and the UK. Of course few at the time bothered to scratch below rthe surface and understand the real driver of growth: unsustainable debt.

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  • With what is currently going on in some European economies (mainly Greece, Portugal and Spain) whose debt is mainly owed by French and German banks, how can Germany do so well ? Yes manufacturing is strong in Germany but the banking system is sick. How long it all implodes ? Smoke and mirrors……

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  • Everything was fine until they created the Euro prior to that we could buy Germany’s and France’s exports and take our holidays in countries like Spain & Greece that had weaker currencies, now can’t afford to go on holiday the Euro is too strong.

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