On Thursday, Bloomberg reported that German industrial production stagnated in February.
German industrial production unexpectedly stagnated in February after harsh winter weather damped construction.
Production was unchanged from January, when it rose a revised 0.1 percent, the Economy Ministry in Berlin said today. Economists had forecast a 1 percent gain for February after an initially reported January increase of 0.6 percent, the median of 27 estimates in a Bloomberg News survey shows. From a year earlier, production rose 5.8 percent when adjusted for the number of work days.
Rising exports, however, continue to help to hold up the German economy.
Exports in Germany, Europe’s largest economy, rose the most in eight months in February as a strengthening global economy boosted companies’ orders.
Sales abroad, adjusted for working days and seasonal changes, rose 5.1 percent from January, when they fell 6.5 percent, the Federal Statistics Office in Wiesbaden said today. That’s the biggest increase since June 2009. Economists forecast a gain of 4 percent, the median of nine estimates in a Bloomberg News survey showed. Imports rose 0.2 percent from January.
Germany's strong external position has not made it more amenable to helping to resolve the Greek debt situation though.
German resistance to subsidizing emergency loans for Greece may hold up efforts by the European Union to reach agreement on terms of a proposed financial lifeline for the debt-strapped nation.
As officials in Brussels hammered out details to a framework for joint EU-International Monetary Fund aid, Germany restated its opposition to below-market rate loans. Greek Prime Minister George Papandreou says without the subsidies Greece can’t cut the EU’s-biggest budget deficit...
The wrangling came amid mounting speculation among economists that a bailout was imminent. UBS AG said it could come as soon as this weekend as Fitch Ratings cut Greece’s debt rating yesterday to BBB-, the same level as Bulgaria and Panama, and just one level above junk status. Fitch said the lack of agreement on the aid package is eroding confidence in Greece...
Greece will need to seek emergency funding to make bond payments and cover debt refinancing of more than 20 billion euros ($27 billion) in the next two months, UBS economists estimate. The premium investors demand to buy Greek 10-year bonds instead of German bunds jumped to 442 basis points on April 9, the highest since the introduction of the euro. That spread narrowed to 398 basis points yesterday on signs that a bailout might be nearer.
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