I was reading another Euro crisis article, this time by AP writer Geir Moulson, titled “German Business Confidence Slides for 3rd Month,” and it seems like Germany has finally been affected (albeit indirectly) by its EU compatriots’ overspending and debt woes.
Frankly, I’m not surprised that they are seeing reduced product exports and a general plateauing of their industrial projections, but they definitely seem to be in a better place than, say, Greece or Spain. These two countries exemplify what accumulating extravagant debt can do an entire economy.
Just like some parents teach their young adult children, “Credit cards are not free money, they’re a loan that needs to be repaid,” Politicians needed to be chided early on before they drove their countries into the ground.
When a country , like Greece, cannot support its spending habits with a robust tax base derived from a healthy manufacturing through a combo of exports and domestic consumerism , it can’t keep up with how much money is being spent. This, in turn, trickles down to everyone in the region, like Germany, who relies on Greek citizens and companies as part of their customer base, and whose resources and supply chain contributions are inter-dependent It all starts to fold, and Germany –though fairly solid in its debt to income ratio– is feeling the effects as it struggles to (and I think, unfairly) prop up its European partners who chose not to take more prudent and practical views on spending.
Now, don’t get me wrong, I’m not trying to pick on Spain and Greece; the United States doesn’t have any room to talk. Our economic decline, recession, and debt problems has certainly had a more devastating effect on the entire world’s economy than a country like Greece, whose biggest exports in recent years seems to be olives and Aristotle quotes. J/k, Greece!