The strength of the German economy
Craning our necks to look up at Dusseldorf's Rheinturn tower made both myself and my producer feel slightly queasy. But once you are at the top the view is magnificent, particularly over the Rhine. The panorama also says something about the strength of the German economy, despite recent figures indicating Germany may well hit a recession by Christmas.
You can spot many of the corporate headquarters that dot the city. Here is the headquarters of an advertising agency, Dusseldorf is also a centre of the fashion industry and a magnet for legal firms. The buildings are aggressively modern in their architecture, bulging out at odd angles, covered in vivid splashes of colour, clad in shiny metal plating. But the city takes strength from the old as well as the new.
So far one could say much the same for London and many other major cities. But the difference is that beyond the neat, suburban houses on the banks of the river are the smoke stacks of the Ruhr, long the heart land of the German heavy industry. Unlike most Western countries Germany never got rid of its coal and steel industries. Recently there's been a growth of more modern, very high-tech and high skill manufacturing companies.
One of them is Demag Cranes which because a public company a couple of years ago. They make huge lifting gear for ports, some of it designed to haul those big container boxes around. The Chief Executive Harald Joos likes to say that as long as there is gravity the company will be in business. But Newton's laws are only a foundation for success. They are booming because of the growth in this business and the building of ports that is going on in the Far East and Middle East in countries that apparently haven't caught a cold, despite America's bout of sneezing.
I ask Mr Joos what the future looks like for his company, with all the gloomy predictions about the German economy.
"Today, if I look into my order books, I do not see one country where we see today a recession. In US measured dollars, we have strong order intake, on the level of 2007 and you know that 2007 was a bad year. Western Europe, especially Germany is very strong today, emerging markets like Brazil, India, Arabian countries and Russia are providing very strong orders. We had a fantastic third quarter worldwide. And that means that in our three segments - industrial cranes, port technology, and services, we had very good figures."
Serious economists tend to sniff when British people mourn the loss of manufacturing industry but does Mr Joos think his country made a wise decision?
"Very wise. In the years 2002/2003 many companies did their homework, restructuring work in their industries, this is the basis for the strong growth rates we had last year and also this year."
Dusseldorf is also famed for its trade fairs and shows. This week it is the turn of the motor homes. Prosperous, retired couples are the main browsers here and perhaps they are less worried than some other Germans about rocketing food prices and energy costs. For Germany's real problem seems to be in the understandable fall in consumer confidence. Ralf Torresin from Hymer shows me around one vehicle made especially for the show : a collection of good ideas from enthusiasts turned into a real vehicle, including fridges on the inside and out (so you can grab a beer on the BBQ) big computer screens and automatic roof racks. But I wanted to know from Torresin how is business?
"The European market is quite hard but it's not that bad, so we think we will have a good exhibition here and a good season next year. People are worried but not in a big way. They just keep a little bit more distance and wait a little longer".
I should stress that many business that we asked for interviews turned us down. Too busy, too short notice, they said. I suspect the ones that agree were the ones with a better story to tell. Certainly one of Germany's leading economists Gustav Horn, the Director of the Macroeconomic Policy Institute at the Hans-Böckler Foundation sounded pretty gloomy about recent figures released by Eurostat.
"The Germany economy is heading for a major weakness. Recent data pretty bad, orders are decreasing for example, revenues in the retail sale sector are decreasing. We are heading for a recession, we are not yet in it. But I expect that we in October/November will be in it and that then growth figures will be even negative".
He thinks the European central bank was wrong not to lower interest rates.
"The ECB should have already decreased interest rates because it must be pre-emptive in order to avoid a crisis, but it's very late now, it's too late to avoid the crisis. Instead the ECB has raised interest rates and that's the wrong direction. So I'm afraid monetary policy will certainly worsen the weakness instead of dampening it. I expect interest rates to be fairly constant until next year, then the ECB will be forced to lower interest rates but that's much too late".
Do you think the bankers should act and what can the politicians do ?
I’m Mark Mardell, the BBC's North America editor. These are my reflections on American politics, some thoughts on being a Brit living in the USA, and who knows what else? My 
© MMIX~RS~q~RS~~RS~z~RS~10~RS~)
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I am not surprided at what you have found in Dusseldorf and do not think it would be much different in other parts of Germany.
Here in the Catalunya Region of Spain you would not notice much of a slowdown at least on the surface. Cunstruction of road, railways, the nearly complete new terminal at the airport are still going on apace.
But slowdown there has been. At least from the giddy growth of the last 20 years. About two years ago the number of unsold or let flats started to increase together with more empty commercial and sops premises. Many people think that a breather is no bad thing provided it does not go on more than a couple of years.
The government has been quite open about the current situation and is trying to help within the rules of the Euro zone. In any case, with the modern global economy, there is little individual governments can do about a world situation.
One word of advice, never, never follow the advise of any economist - it is not known as the gloomy profession for nothing.
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best thing Germany could do is leave the euro and have there own currencey , one interest rate fits all is not the anwer lol down with the euro it slowly happening.I wonder how many people oout of ten love the euro probally 1/10 love 9/10 hate it
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@jaws1912
you are a typically prejudiced and ignorant eurosceptic who only sees what he wants to see.
germany's slowdown is shared with the whole of the rest of the eurozone. its problems are in no way symptomatic of the "one-size-fits-all" criticism of the eurozone. the entire eurozone faces the same basic problem - there needs to be a real adjustment in the european economy to the higher energy and food price environment for the global economy.
while the us fed has chosen to prioritise growth over price stability by significantly cutting rates below inflation, the ecb is well known for being both conservative (i.e. not moving rates quickly) and zealously hawkish on inflation. the result is an interest rate environment that many criticise as being too high for the current stage of the economic cycle - hence the euro being (still) way overvalued against the dollar, putting additional pressure on european exporters.
whether the ecb is right to prioritise price stability, or the us fed to prioritise growth, only time will tell. personally i suspect that if the ecb can hold its nerve, it will come out of this very well, helping the euro to achieve the same status as a global reserve currency that the dollar now benefits from.
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The ECB's policy is not going to suit all the economies in the Eurozone. Some will benefit, others loose out. 'One-size-fits-all' is usually a recipe for dissatisfaction all round.
Germany tethered (or shackled) itself to the Euro for purely political reasons. The currency of the 'powerhouse of Europe', once the strongest and most-respected (DM) in the world, is now at the mercy of political, economical and fiscal pygmies like Brussels, Greece and Portugal.
Prosit.
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benagyerek @ 3
I tend to agree with your assessment (but not so the criticism of jaws1912 - In some respects he is right, not everyone loves the Euro although I happen to believe that it is a good thing!)
There are two issues that will concern the ECB.
Firstly that the economies of the EU that are using the Euro and thus affected by the
ECB Interest Rate are divergent. For example, Germans may seek lower Interest Rates because the Manufacturing Strength of German Industry may be able to achieve increased productivity and have the capability to avoid recession. On the other hand, an arguably a weaker economy such as Spain (where there is a strong reliance on Construction Industry to generate wealth) will need to have action taken on it's behalf to avoid recession.
The other issue is, of course common to all of the EU and that is the risk of increasing wage demands by individuals and their Trades Unions to help people keep pace with the price increase for Food, Fuel and other essential items.
If wages rise at a greater rate than Inflation then we all may face the risk of Super Inflation. We have been there before and it is frightening.
The ECB (and Bank of England for the UK as a non-Eurozone EU Nation) keeping rates high is a more safe option as the Unions can understand that if they seek too high wages increases - Interest Rates will rise to keep the lid on inflation leading to Firms cutting jobs to save costs thus eliminating the benefits of higher wages.
My personal view is that prudent housekeeping is the way forward so both the ECB and Bank of England are being rightly cautious. It will hurt in the short term but it is the more safe option for longer term benefits I believe.
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@jaws1912
What benagyerek said, and do you have anything alse to say apart from the EU is evil?
I don't see the German slow down as too serious it is just the effects of a global slowdown, and the Eurozone has been particularly resistant helped by an excellent currency.
Germany and the rest of the Eurozone will come out of this wiser but not significantly damaged.
The UK and the US may take longer but to niether of them will the damage be lastingly detrimental.
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So 'Jaws 1912'writes (or tries to!) the usual uninformed tripe about the Euro. Currencies have a function, they are not objects to love or hate and at the moment the Euro is proving a very useful currency in stabalizing the zone from the worst of the recession and imposing some financial stability amongst members. Compare this to the unfettered financial sector in the UK and the consequences, a timid Bank of England which won't react and the result is we could be waiting a long time to come out of this recession. Still , don't let a bit of economic common sense stand in the way of your prejudice!
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German businesses are fabulous. If they do a thing, they do it proper. They are the envy of Europe.
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@menedemus
i agree with most of your comments. however, your examples of spain and germany - which as you mention are both in recession - would appear to support my view that there is very little divergence. see the attached link with the economist's latest price and output data. apart from greece, all eurozone economies are suffering a sharp slowdown in growth in the latest quarter, while inflation is way above the ecb's 2% target.
http://www.economist.com/displayImage.cfm?imageURL=http://media.economist.com/images/20080906/TAB1.gif
as for jaws1912's hypothetical opinion poll, i suspect the real result would be that 8/10 would be totally indifferent. unlike in the uk, on the continent membership of the euro is no longer a politically contentious issue, which i consider a mark of its success. jaws1912 suffers from the fatal flaw typical of all eurosceptics that he has little idea of (or interest in) what other europeans actually think or care about.
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To Jaws and athers against the Euro I would make two points:
First - The United States has a common currency, so does China, Russia and even Great Britain. All those have widely varying means in different parts of their econmies. So the One-size-fits all arguement does not really stand up.
Secondly: Base rates set by Central Banks, be it the Federal Reserve in Washington, the Bank of England or the European Central Bank are not those paid by borrowers businesses, individuals or even States. Rates to both borrowers and on deposits are governed by market forves and can vary very widely indeed.
Actually, changes in Base Rate in itself has little direct effect, particularly if the non-availability of cheap credit is not the prodlem. This is the situation in the United States at the present time where the basic problem is an unsustainable level of debt at every level from the individual to the coutry as a whole. The reduction of base rates has done little other than reduces the value of the Dollar, which is what infation in reality is.
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I have never understood why the UK could accept some of the benefits of free trade and the free movement of goods and workers within the internal market that was the EEC (and now the EU) yet cannot accept adoption of a common currency.
I appreciate that this would give over fiscal control of the Base Rate to the ECB but as the ECB is almost a clone of the Bank of England, I am not sure what the disadvantage would be to the UK - especially nowadays as Gordon Brown has given the Bank of England total freedom of actions to manage the Base Rate and removed almost all political influence.
I presume taxation still remains a sovereign matter for individual EU member states but I have never understood the reluctance of the UK to embrace the Euro and ditch the pound.
I used to work for a global well know UK-based Pharmaceutical company - 60% of it business was in the US Market but the best part of the remaining 40% of manufactured product was destined for European markets with something like 5 to 10% only going rest of the world. From that companies perspective it had to deal in Sterling, and trade to Euros or Dollars to complete transactions. With varying currency valuations this was (and still is) a major financial cost for currency conversion to UK companies that trade with Europe and/or America.
I appreciate that I may be being rather naive but what is the rationale behind the UK NOT adopting the Euro?
As a personal and individual citizens benefit, I would see buying in Euros in the UK would help highlight the price differences between commodities and basic foodstuffs and the high burden of taxation on goods sold in the UK compared to the rest of Europe - is that the main reason that successive UK Governments of the Day consistently shy away from adopting the Euro, i.e. they don't want the British public to see how badly they are invisibly taxed or is it something more complex that I do not understand?
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Mark, having read your comment on Düsseldorf I'm surprised you didn't mention the presence of the Japanese as certainly ten years back it had the highest population of Japanese in Europe I recall and the shops were full of food products from there. That was one of the reasons why it has been so high tech and various computer centres were there.
As for the Euro and what the previous posters have said, I will repeat what I have said several times before, there are two natural mechanisms to control the economy of any country or region, taxation and interest rates. If you remove one of them then the ability to redress a problem becomes very difficult, add diverse economies and governments that don't follow the fiscal rules and you have chaos. For me the UK were very sensible to not enter the Euro as having had the experience of going from LSD to Decimal in the 70's I said to the central bank where I was working to help introduce an IT system to control the Euro, it would be subject to abuse and there will be major problems. It's a pity that it has happened and many ordinary people now regret that they don't have a safe reliable currency that is controlled relatively locally according to local events.
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Europe doing well? Great. This is the perfect time then for the US to pull its expensive military establishment out and let Europe defend itself at its own cost. Either that or start charging Europe for it.
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Why do people presume that it is only in the eurozone that problems exist when trying to set the same rate for diverse economies?
While the US is one country, there is the same balance as well between regions growing at different speeds. The Midwestern Rustbelt desperately needed lower interest rates to stimulate sagging industry, while the Southwest Sunbelt needed higher rates to reign in excessive property development.
It is only natural that there will be no "one-size-fits-all" interest rate; someone will invariably complain. Be it a monetary and political union like the US, or a monetary union in a supranational organization like the EU.
As a side note, I am curious to see so many negative comments towards the Spanish economy. The Anglophone press, especially the British press dedicates much paper and band with to the struggling Spanish economy. Yet hardly anything was written when Spain was undergoing an economic boom the past decade.
I would imagine it is because the English-speaking world has a hard time imagining any Spanish speaking country as being anything more than sun and beach. Sure, it was only construction that made the Spanish economy what it is. Santander, BBVA, Telefonica, Ferrovial, CAF, clearly are the hallmarks of a one-horse economy. ¡Olé!
Perhaps it is high time for the Anglophone press to recognize that it is has as wide a view on the world as a horse with blinders?
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Mark_Wiscon @14
I am sorry if you were upset by my post at #5 where I was comparing Germany with Spain for divergent economies and dissparate problems but I was not even trying to do Spain down.
Spain does very well on it's own and as part of the EU recieves the second highest percentage of EU Budget spent on an EU member state at 12.09% of the total EU budget.
In terms of inflation and GDP Spain is pretty much equal to the UK figures but it does have an inordinately high percentage of unemployment compared to other EU nations.
I meant know disrespect to Spain or the Spanish.
I just wanted to highlight that the calls for lower interest rates from German Business Leaders would not necessarily benefit other countries within the EU - Spain being an example of a country where the recent downturn in the collective economies of the EU has been perhaps more marked and led to double figure unemployment.
The Spanish economy perhaps need more fundamental support than a simple cash injection from lower interest rates from the ECB.
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Buzet23 @12
Thank you for your insight into the link between Taxation and Base Rate control regarding the UK adoption of the Euro and the need for “Local” control. I simply wonder if that concept still pertains today.
When the Euro was first introduced I was, probably because I was then (and still am) EU-sceptic, quite happy to keep the pound sterling as my currency.
In those days the Bank of England varied the base rate at the behest of the Chancellor of the Exchequer and taxation remained a sovereign responsibility of the UK Government of the day.
However, since then and in probably the one good move that Gordon Brown has done in the past 13 years, the Bank of England now as autonomous control over the setting of the Base Rate. This has removed political control altogether.
As the ECB is run on the same principles as the Bank of England and, arguably, the Euro is as stable (if not indeed more stable!) a currency as the pound sterling, I simply wonder why the decision to adopt the Euro is never ever brought back into the UK spotlight to revisit the topic of adopting the Euro.
Adopting the Euro would dissolve the Bank of England and eliminate '"local" control but I am not sure that the pound sterling is more stable than the Euro for being locally controlled.
I know from first-hand experience that in the modern global economy, currency exchange is a business burden and a very expensive overhead - UK-based companies would love to trade in Euros (or US Dollars) instead of pounds sterling and it would seem to be of business benefit to adopt the Euro (as it is more "local" to the UK than the US dollar!).
And, although I recall the difficulties with the decimalisation of the pound sterling that the British struggled with we now use the decimalised currency without a thought.
From a personal perspective, I can see that having a common currency for the UK and the rest of Europe would highlight in an instant the excessive taxation that the British suffer on goods, services and commodities as we would instantly see the price differences on what the British pay for things north of the English Channel and the prices paid south, east and south-east of the English Channel. At the moment the British have to mentally calculate the current exchange rate and think they are being ripped off by their government - if we all used the Euro, the British Citizens AND visitors would know they were being ripped off.
This could benefit the UK as it would drive a coach and horses throught the theory that the UK is a "low wage-low cost" economy and the British Government would have to address it's taxation policy in order to address the gulf between the fact and the fiction of what it costs to live in the UK.
I think that adopting the Euro would do the British a power of good and wake us all up to the reality of how much we British are actually paying in hidden taxation for our NHS, Social Services, Central Government, Local Government and Quangos that are the vestiges of our governemt spending money as if it grew on trees instead of through the taxpayers pockets.
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The entire discussion is well beyond the point. In the long time scale, economical development is only possible by virtue of new technology. The latter is based on dvances of fundamental science. Both are the responsibility of the government. Any assumntion that a market economy would provide such a development is a sheer fantasy. The huge economical prosperity of the West after WW2 is solely based on the science and technology produced within the state-supported projects of the cold war era. From that perspective, the german situation looks bleak. Germany is currently not a technology producing country, and its scentific reputation of the early 20 century period has long lost. The same is true about the rest of the continental Europe.
No banking policy can help with that.
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I presume the 'Rheinturn' tower is actually the 'Rheinturm', which means Rhine Tower. So calling it Rheinturm Tower would be a bit of a tautology.
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In so many ways Germany and England are (or should be) such similar countries, yet they have adopted totally different stratagies. Germany's idea of being a good European has been to embrace the EU (at least on the surface). In exchange for being a net contributor to the EU they secured access to markets of all 27 member states, and through export and takeover now dominate Europe's economy.
Just a few years ago, even Spain and Portugal were virtually closed markets for imported consumer goods; now not only they but also the "new" states of Central and Eastern Europe are open, and above all it is Germany that has taken the initiative to develop these markets as their own. The UK could have emraced the opporunties, but failed to do so.
The Germans adopted the Euro (even though the German public was at least as sceptical as the British), opened their borders as part of Schengen, completed transport routes across Europe linking the national Autobahn network with the rest of Europe's motorways, building an international netowrk of high speed trains and looking to secure clean technology to power the industries of the future.
The European flag may fly everywhere, but even private cars are predominantly German, and in Bavaria, all officials use BMWs (not even Mercedes, built in nearby Baden-Wurtenburg) are acceptable - EU procurement may mean that Jaguar and Alfa Romeo can bid, but they will not suceed. In short, the Germans are very patriotic when and where it really counts.
The UK still has an insular mentality, and industry is still looked down on, from Government through to the educational establishment - but when it comes to buying from abroad, we (from Government downwards) are the "best" Europeans - we'll buy anything from anyone, and never favour our own industry.
The UK thinks it is important to use its diminishing resourses to fight wars in the Middle East, to stage the Olympic games;
Keeping the Pound and rejecting the EU is seen as patriotic, yet anyone who choses to buy a car or other product to support UK industry is now seen as being odd or even quaint.
The truth about our currency, after the birth of the Euro is that we were not carrying on as before: once the Pound was one of the more important currencies of Europe, but the coming of the Euro has rendered it to be an unimportant side-show, and a barrier to foreign investment even when the Pound is low (exchange costs and uncertainty about the Pounds future value)
Our borders are being tightened, just as the rest of Europe opens. Why does this matter? Well, it is in part symbolic, in part delays at borders cost business time and therefore money.
Only now has our high speed rail line to the Continent been finished, years late. And it stops in London, with no firm plans to extend it to the Midlands, North and to Scotland.
Our motorway network has virtually stopped growing, and is hardly international (heavens, even the Scotland/England motorway is not yet finished), and full sized European trucks are still prohibited.
And the energy policy is a shambles. Nuclear (too unpopular); wind (well, we don't want to spoil the skyline); tidal (lets worry about the birds in the Bristol Channel); coal: (lets worry about global warming). Keeping people warm in winter? Industry? (let the next Prime Minister worry about that)
It saddens me to say it, but once the world comes out of the currrent down-turn, expect Germany to be far better placed to build a prosperous future than the UK.
#11 and 16 Menedemus
You are spot on about the Euro
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In response to comment #15:
It takes a lot to upset me. A blog is hardly one of them, don't worry. My comment (#14) was more general criticism of the English-language press. It tends to be very chauvinistic. For the record, I have no particular axe to grind when it comes to Spain; I'm from the US.
You correctly mention that a) Spain received significant investment from the EU and b) it has an inordinately high unemployment rate. These are two facts that are not really up for debate. What I think though what IS debatable is to the extent the EU is responsible for the Spanish economic expansion of the past decade. I think that it is difficult to attribute previous Spanish economic expansion JUST to EU investment, although it obviously helped tremendously. For example, the Spanish economy started booming when Franco opened up the economy, before membership in the entity that preceded the EU.
In addition, throwing money at an economy is hardly a guarantee for success. Greece is to a certain extent representative of this, considering that it needed to lie to the EU in order to join the euro. As if that was not bad enough, it has since admitted to cooking the books in other areas. But the poster child of horrific use of EU money lies over the western border of Spain: Portugal. Portugal, without experiencing any Spanish-style economic expansion and convergence actually began to DIVERGE from the rest of the EU. They are now suffering a recession, but without having had the benefits of growth. As a result, Eastern European countries that were suffering under communist economic policy have begun passing Portugal, countries that were still communist as Portugal already was receiving EU funds!
This type of nuanced understanding of economies outside the Anglophone world is what I am criticizing, not you. Typically everything in the Anglophone press gets reduced to "when the Mediterraneans do well, it is because of Northern money, and when they do poorly, it is because of their incompetence." And this does a lot of countries a great disservice.
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I hope that you and your producer, didn't do any damage to your bodies....
The economy in the Euro Zone, is in some difficulty because of some decisions made by ECB.
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I agree with SuperJulianR (#19) concerning British patriotism. We are very keen on waving flags but when it comes to actually helping our economy by buying British made products, we seem very reluctant, which is partly why there are now so few British made products to choose from. With regard to the Euro, there are good sound economic arguments both for and against UK entry but if the issue were ever put to a British referendum, the answer would be 'no' and the reasons would probably be nothing to do with economics.
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"I agree with SuperJulianR (#19) concerning British patriotism. We are very keen on waving flags but when it comes to actually helping our economy by buying British made products, we seem very reluctant, which is partly why there are now so few British made products to choose from."
Try Nissan, Toyota or Honda. All 100% british made products. Designed abroad but built here in some of the worlds most efficient car plants. Rover et al's problem was that they were building cars that were 20 years out of date. Our ability to design world beating products seems to have escaped but we can still build them better than anyone else.
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Its worth pointing out too that the steel and coal industry in the Rhine valley are only there because Britain rebuilt them after the war. In 1945 those steel mills were 1 brick high and rationing got a lot worse post-war as we supported our former enemy at a time when we could barely feed ourselves.
That is rather forgotten nowadays.
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Peter Sym's comment on #23 'Try Nissan, Toyota or Honda. All 100% british made products. Designed abroad but built here in some of the worlds most efficient car plants'. is true to some extent (although I'd argue with the 100%) but it should be remembered that the main reason they came here in the first place was to ease Japanese access to EU markets
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#25. Thats not true. The japanese drive on the left as do us Brits. Europe drives on the right. Nissan make right hand drive cars in Japan, ship them to Europe then fill up with left hand drive cars in Sunderland and take them back to Japan. The Japanese drive British made 'japanese' cars.
Nissan sunderland is more productive than Nissan Japan.
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Germany is in directly competing with South Korea and Japan, especially in the sector of communication devices.Also, it is Mistibushi v/s Hyundai v/s Suzuki.It only shows that German economy is not only strong but also
competing with others in field of manufacturing goods.
Today World's busiest airports are also in Germany.
I would like to mention that Japan,South Korea and Germany have come a long way from the times of second World War to become dominant economies of the world.
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#11. Menedemus wrote:
"I presume taxation still remains a sovereign matter for individual EU member states but I have never understood the reluctance of the UK to embrace the Euro and ditch the pound."
Sadly not
VAT has base levels below which a govt may not reduce the rate - so even if the UK govt decided to aid its citizens in this time of exorbitant fuel prices by scrapping VAT on gas or electricity, it cannot reduce VAT below its current level of 5%. Why? because the EU 'says so'
There are far too many tariffs and tax rates fixed (or bounded) by EU rules, and more being added each year with no debate and no publicity
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I am in toital agreement with comment #19. As someone who lives in Germany and has lived in the UK I have a good idea of how both counrties function and how the general populas thinks.
The UK made a (imo) mistake by not joining the Euro in the beginning (although there were (and still are) economic arguments against this from the perspective of the government at the time). there are 3 main powers in Europe, Germany France and the UK. Had the UK joined, there would have been direct competition between the UK and GER for EC dominance (France is not overly interested as long as she can push certain directives in favour of herself through). Germany has now become the superpower of Europe and the UK has withered away. The currency has lost a lot of ground to the Euro which has become the worlds second reserve currency.
although there are a few consumer based worries here in GER, her strong manufacturing and tech base will see her through these times. The UK could well be a different story as inflation is not only linked to global prices, but the soaring cost of imports (needed because the UK does not produce much anymore) linked to the depreciation of GBP.
The British also like to moan about pretty much everything despite (not in every case) not knowing much about the issue they are moaning about. this short sightedness and strong public oppinion makes it very difficutl for any government to make major long term decisions without comitting political suicide.
RE taxation, there are some guidelines etc from the EU, but essentially countries can set their own tax rates. FYI, VAT here is 19% and I pay around 47% of my total salary in tax and healthcare. As Germany is like the US, a collection of states, states even have rights to set certain (non-core) taxes themselves.
RE Schengen - hurry up and bring it into the UK. It only permits ppl from the EU entry, not the rest of the world. Having to que through pasport control when visiting the UK seems so outdated.
rheinturm - fantastic - I hope you held the rail, lent over and looked down! Enough to make anyone ill!!
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