Report
Patrick Artus

Why did the shape of the recovery from the subprime crisis differ in Germany and France?

There is now a much interest in the shape of the economic recovery after the COVID crisis and how it will differ from one country to the next . This leads us to look at the recovery in the wake of the subprime crisis: why was it faster in Germany than in France? We imagine the following possibilities: Germany was more capable of taking advantage of the recovery in global trade; Labour market rules allowed a faster recovery in employment in Germany; Profitability and investment recovered faster among German companies; Fiscal policy was more stimulatory in Germany; Bank credit picked up faster in Germany. Of these five possibilities, only the first two seem to have applied ( benefiting from the recovery in global trade and the significant use of short-time working in Germany). Could these mechanisms lead to a faster recovery in Germany than in France after the COVID crisis also? This is not clear: the recovery in global trade is going to be slow, and this time France has also made significant use of short-time working schemes.
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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