Germans, Confident About the Future, Distance Themselves From Neighbors

Consumer confidence has climbed in Germany as the year ends. It is an extraordinary development because the balance of Europe is in such a depressed state. But the numbers reinforce how Germans view the prospects of their powerful economy as the rest of the region moves toward what many experts think is doom for the future of the eurozone.

Research firm GfK reported new numbers from its “Consumer Climate” study for December. The data showed that:

Despite rising economic risks and further escalation of the debt crisis, Germans are once again more optimistic about the future. In December, economic expectations increased for the first time in five months. In line with rising economic optimism, consumers are anticipating higher incomes next year, with the indicator once again rising from an already high level.

Germany’s GDP is expected to grow next year, while the economies of many of its neighbors, even France, will shrink.

The contrast is another reason to believe that German citizens will not support much more of their country’s contributions to bailout funds. Angela Merkel has continued to put money into facilities to help the eurozone. But the GfK data indicates an optimism born from Germany’s powerful manufacturing and intellectual property sectors. The benefits of these businesses support German lifestyles and employment. Contributions to outside nations eventually will cause an increase in taxes, or an austerity program German voters know they do not need. At least, that is, if Germany keeps it distance financially from the ongoing and floundering programs to keep the eurozone together.

Germany’s economy is increasingly dependent on its relationships with the consumers in places like the U.S. and China, which remain massive consumer-driven economies. Germany’s neighbors have consumer bases with shrinking discretionary income. German voters know that. And they eventually will reject plans to fund the region’s problems. These consumers are optimistic now. They do not want that optimism take from them.

Douglas A. McIntyre