German business confidence hits post-1990 high

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German business confidence hits post-1990 high

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Germanys’ parliament is ringed with steel as the country is on high alert against a terrorist attack, but inside the government was in celebratory mood as the 2011 budget debates began.

That is because business confidence in November surged to a high not seen since reunification in 1990.

While Chancellor Angela Merkel has been slammed by some for talking down the boom, she insisted she would not stay silent:

“This is about the primacy of politics, this is about the limits of the markets. And this is about a classic issue of the market economy of the 21st century, ladies and gentlemen. That’s exactly the point.”

Merkel has been demanding banks and investors shoulder some of the pain of dealing with the eurocrisis, and that it should not be just up to the taxpayer. The markets have not liked that at all.

But they are liking the figures coming out of Germany, where as one analyst put it all the economic indicators are flashing green.

“The current climate and business expectations have both improved. It is a marvellous fairytale boom,” says Ifo institute president Hans-Werner Sinn.

However what is good for Germany may not be good for the rest of the EU. A few are daring to suggest Germany might break away from the eurozone if it feels it is being held back by the weaker southern member states, and paying too much for them.