March’s 1.2% jump in German industrial production is a further boost to hopes that Germany's economic spring has finally arrived. Coming on the heels of the 4.4% rise in industrial order books in February and March, it should ensure German output should extend its positive run over the coming months. The economy looks set to move above its long run optimum output potential fairly soon.
However the economic success in Germany should not be confused with the economic doldrums facing the troubled Eurozone economies . Germany has been building up its strengths since post-unification and the economy is turning up trumps after decades of re-structuring and intense capital investment. A large part of the Eurozone is suffering severe austerity in the wake of the debt crisis. Those problems look set to extend with the troubled economies bouncing along the bottom of recession for years to come.
There is a mixed message for Eurozone policymakers. It’s no wonder that Germany is looking for the stimulus taps to be turned off, while policymakers elsewhere are looking for a much faster flow of policy regeneration from the ECB and Eurozone governments.
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