21 July 2010, 18:13  Germany - Europe's economic engine

Germany, Europe's economic engine, is back in gear after a painful recession, as foreign customers snap up cars and industrial machinery and the country reaps the benefits of stimulus spending that helped keep the motor running at home during the downturn. In particular, economists point to government support for keeping workers on the job with shorter hours instead of laying them off - a measure that kept more money in people's pockets and prevented a growth-killing spike in unemployment. As things pick up, those programs are scaling back, while the government expects to exceed its economic growth estimate. Meanwhile, carmakers Daimler and BMW say their prospects have brightened - enough for BMW to pay workers a bonus. Not bad for a country where the economy shrank by a painful 4.9 percent only last year - easily the worst performance since World War II for Europe's largest economy. Germany is now a bright spot in a Europe still shaking off recession and struggling with heavy levels of government debt in some countries. The economy minister proclaimed in parliament this month that Germany can be proud "that we are the economic locomotive for the whole European Union." So far, the government is predicting 1.4 percent growth in 2010, but Economy Minister Rainer Bruederle says he is "sure it will be significantly more at the end of the year." "This development will continue next year because the economic motor has sprung into life beyond exports," Bruederle told the B.Z. newspaper last weekend.

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