How many negative new ones are considered a crisis? This question is asked by politicians, who in recent years see their country, the once “European locomotive”, be in a permanent lack of energy. The last bad news was Friday’s combination “blow” (29/8), a day on which data confirmed the coexistence of negative record and excessive
Negative coexistence
Inflation increased more than expected to 2.1% in August, according to preliminary data published by the Statistical Service Destatis. The divergence is not considered large, as economists who participated in a Reuters poll were expected that the consumer price index would be 2%, a little higher than 1.8% of July, when it was recorded lower than expected.
However, it captures an image of uncertainty, at a time when the impact of the sanctions imposed on the European Union by the US government of Donald Trump has not yet been clarified. It even contradicts the data of the other three major economies of the eurozone, France, Spain and Italy, where statistics showed lower than expected consumer prices. Specifically, France remains well below the ECB target at 0.8%, Italy is approaching 1.7%and Spain exceeds it with 2.7%. The new increase in inflation is attributed to increased food costs and the smallest of the expected decline in energy prices.
But also on the front of unemployment, the Government of Cooperation of the Central Rule of Christian Union (CDU/CSU) and Social Democrats (SPD) under Friedrich Mertz is confronted with an unpleasant reality. Receiving a negative record of a decade, the number of unemployed in Germany exceeded August the 3 million threshold for the first time from February 2015 – 46,000 more than previous month and 153,000 more on a yearly basis, the Federal Employment Service said.
BB President Andrea Nales attributed the increase to the usual deceleration observed in August due to summer holidays and seasonal recession. German employers, however, have a different view. “These 3 million unemployed in August are, above all, a statement of failure in the face of the refusal of recent years to reform,” said Rainer Dulger’s (BDA) president of the Employers’ Union (BDA), who stressed that Germany had a “need”.
Chances and concerns
It is worth noting that next Tuesday, the Pan -European Inflation Index will be announced, which includes all the 20 eurozone countries, which is estimated to give a first “taste” of adapting a series of economy sectors to the new situation that has been tailored to the Tariffs. However, however, the situation is already undergoing increased pressure on households and businesses, with the head of the Institute of Economic Research (IFO) Clemens Fouss to speak of “uncertainty that holds consumption”, which estimates that it will further exacerbate the labor market. It is worth noting that the German economy shrunk for the second consecutive year in 2024, it will remain stagnant in 2025, while growth prospects from 2026 are anemic.
There are certainly European concerns. Given the political crisis in France, where the government is already facing strong fiscal pressure, a prolonged state of economic anemia will lead to the equation that a weaker Germany wants to equal to weaker euro. In addition, the risk of curbing demand will also have a negative impact on a number of European states based on the export of goods and services to Germany (it is the third largest recipient of Greek exports to the EU).
During the joint Council of France and Germany in Toulon on Friday, Mertz attempted to entertain the impression, saying that “the treatment of unemployment will be at the center of the federal government”. The fact that the same meeting was made an agreement between the German Chancellor and the French President to invest in research, with the spearhead of artificial intelligence, and strengthening military support in Ukraine, makes many talk about a strategic strategy.
