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The Brief: Europe's engine stalling as Germany's economy shrinks

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The Brief: Europe's engine stalling as Germany's economy shrinks
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AFP
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Germany's economy shrank 0.1% in the second quarter of this year.

Uncertainty over Brexit and the trade war between the US and China slowed down the export-oriented German economy.

The Speaker of the German Chamber of Industry and Commerce, Volker Treier, is not very optimistic about the near economic future of the country.

"We, as a global investment provider of machines, equipment and installations, are being hit by that very hard. We don`t see the end of it."

If the German economy has another negative quarter, it will be considered "in recession". The government is preparing some countermeasures to mitigate the effects, as revealed by the employment minister Hubertus Heil.

"For the possible necessity of short-time work I want to make sure to build an incentive with connecting it to training.

"And I want Germany to be able to implement short-time work faster in case of a fast recession of the economic situation because of global economic risks."

The slowdown of the German economy is in line with all the major economies in Europe. The GDP of the Euro area fell from 0.4% in the first quarter to 0.2% in the second quarter.

The economies of France, Italy and Spain are also slowing down.

Fears of a global slowdown had an impact on the markets this Wednesday. The index of all the major squares in Europe dropped between one and three per cent.