Germany’s May foreign trade balance showed a €1 billion deficit. This has led many analysts to question the future of the country's economy and the outlook for the European Union in general.
The bad news doesn’t stop there either. As of July 3, Germany’s total global market capitalization, meaning German companies’ total value share of global stock exchanges, stood at an all-time low, 1.97%. Meanwhile, on July 5, the euro fell to its lowest level against the US dollar since 2002.
Robin Brooks, chief economist for the Institute of International Finance, summed up the situation regarding German trade quite well. “Germany's growth model has been to import cheap energy from Russia, use that to assemble manufactured goods and export those goods to the rest of the world. While Germany now seeks new energy suppliers, its trade balance and that of the Euro zone will look ugly,” he wrote on Twitter.
Germany’s trade deficit is significant. In a few days, the trend could be more pronounced if other industrial European countries report similar deficits. At the very least, this should sound the alarm on exactly what the European Union’s long-term plans are vis-รก-vis Russia and whether or not European industry can feasibly survive with sanctions on Russian energy.
My bet is that it can’t. And this goes to show just how destructive blindly following Washington’s foreign policy is, time and time again, for Europe.
Russia can guarantee EU energy security – Moscow
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