Report
Patrick Artus

Is it certain that the economic policy response to a recession in Germany will be good for the other euro-zone countries?

Germany is going to face lasting economic problems, given the slowdown in global trade, the problems of “old” industries and the decline in its cost competitiveness. In all likelihood , Germany is going to respond to these economic problems by shifting to a more expansionary fiscal policy. The standard refrain is that this will be good for the other euro-zone countries. But is this certain? There is reason to fear that Germany’s more expansionary fiscal policy will: Consist in increasing investment in public infrastructure and in boosting the development of new technologies and renewable energies, and that this additional public spending will mainly benefit German companies; Drive up long-term interest rates in Germany and also in the other euro-zone countries.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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