Germany: The “Sick Man of Europe”?

GERMANY - After a six-month expansion at the start of the year, Germany’s most prominent leading indicator – which indicates firms’ projections for the next six months – has now dropped for the fourth consecutive month, coming in at 85.7 in August, from 87.3 in July, and is now back down at levels last seen in autumn last year. The ongoing weakness in the Chinese economy, ongoing monetary policy tightening, and policy uncertainty regarding the energy transition and energy prices seem to be weighing on German company sentiment.

The growing feeling that Germany is in for a longer period of subdued growth also seems to have reached German business. Both the current assessment and the expectations component fell. Expectations are now as low as at the end of last year, while the current assessment component is as low as in late 2020. The optimism at the start of the year seems to have given way to more of a sense of reality. In fact, the last few weeks have seen an increasingly heated debate about Germany’s structural weaknesses under the placative label “sick man of Europe”.

German economy to remain in stagnation. Today’s data pours more cold water on those hoping that the country’s economic weakness will be short-lived. In fact, the latest round of sentiment indicators suggests that stagnation in the second quarter was not the end of contraction but rather a temporary respite. The German economy is in for a longer period of stagnation. The new debate about the ‘sick of man Europe’ could finally increase the sense of urgency among decision makers; more than a protracted period of de facto stagnation could.

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The right wing AFD party will undoubtedly make use of this in a politically unstable Germany. The energy situation re Russian oil/gas is the real issue. Under pressure from the USA, Germany has cut itself off from cheap oil/gas from its next door neighbour in favour of much more expensive supplies from the USA.

It could be yet another case of history repeating itself. Will there be a split between a more right wing Germany and the USA – which will hurt the USA financially – with Germany going back to Russia for supplies and forging an agreement similar to the one pre–WWII?

This agreement is commonly referred to as the Molotov-Ribbentrop Pact. ...The German-Soviet Pact prepared the way for World War II. This agreement included provisions for economic cooperation and territorial expansion.


“So long as present German prosperity continues… the Nazi takeover will not be possible! But — should any severe THREAT to that hard-won prosperity come — the picture will change — and change VIOLENTLY, in Germany! Remember! It was the afterwash of the disastrous stock market crashes of 1924 and 1929 that fanned the flames of violence in Germany to pave the way for Hitler!

HISTORY REPEATS ITSELF, they say. And your Bible predicts a great TRADE WAR between the burgeoning economic power in Europe and the United States. It predicts terrible financial COLLAPSE for this country [USA]! Make no mistake! Germany, and all Europe, would not escape unscathed in a hot trade war between the Common Market and the United States. Terrible economic disasters would result! And the result from such disasters? A NEW NAZI GERMANY

You need to be WATCHING — and keeping your eyes on developments in EUROPE — as never before! You, at least, have been WARNED!” (The Plain Truth, December 1963)

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Listen to Me, You who know righteousness, You people in whose heart is My Law: …I have put My words in your mouth, I have covered you with the shadow of My hand, That I may plant the heavens, Lay the foundations of the earth, and say to Zion, “you are My people” (Isaiah 51:7,16)