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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: JEB who wrote (39819)	8/25/2002 4:00:40 PM
From: KLP	Read Replies (1) \| Respond to of 281500

JEB...and/or Everyone...any thoughts about this??? In view of this....August 7 Message 17849287 this... Message 17858223 and this...today Message 17916559

To: JEB who wrote (39819)	8/25/2002 4:32:04 PM
From: Elsewhere	Read Replies (3) \| Respond to of 281500

Walker's World: Sick Man of Europe? ... For the past 10 years, Germany shared with Italy the unenviable position of bottom of the league for economic growth rates in Europe. This statement could lead to an interesting philosophical discussion. Is it desirable to permanently have rapid economic growth? Shouldn't the target be, in a utilitarian sense, as many citizens being content with their life as possible? Is economic growth a necessary condition for that? Unemployment remains stubbornly high at 10 percent How many of the unemployed persons do want to work? high taxes and welfare costs discourage employers from hiring Yes, this definitely is the most severe obstacle to growth. The result has been widespread gloom. "Widespread gloom"? Friedrich Merz has since cut Issing's modifying phrase, and asserts that Germany "is lagging behind the rest of Europe in all crucial economic areas and is now the sick man of Europe." Yes, Merz wants his party to win the election, too. Germany's plight is scaring its partners in the European Union. "Plight"? With a GDP/capita 100 times as high as in many African countries? was the costs and taxes associated with unification, and absorbing the 17 million former East Germans. That's true - that cost thousands of billions of USD. [Dresdner Bank] lost $1 billion in the first half of this year and saw 20 percent of its revenues disappear, That's not a "banking crisis", it's peanuts compared to what ENE or WCOM did to US banks. But the banking sector as a whole is seen by investors to be in such trouble Only as far as "return on equity" is concerned. Germany is "overbanked", too many branches, yes, but capital ratios are well in the "green zone". that Josef Ackermann, head of Deutsche Bank (the nation's biggest) has promised no new acquisitions, He's an investment banker, his prime target is to please shareholders. That's ok but it's definitely not a case supporting Walker's crisis theme. German investors are already nervous. Not more than investors of other G7 countries. The main Frankfurt stock exchange is down 52 percent on its peak in 2000, a sharper fall than Wall Street or anywhere else in Europe. The DAX has historically had a higher beta than Wall Street. And the Neuer Markt, Germany's equivalent to the Nasdaq, is in even worse shape, having lost 90 percent of its value. The Neuer Markt is a dot.com index, it's decline is not different from the ^IIX. hot-button sound bites like "sick man of Europe" and "Is Germany Heading The Same Way As Japan?" Indeed, hot-button sound bites. Chancellor Schroeder faces a steep uphill climb to re-election. His coalition is likely to lose though it is catching up recently following the floodings.