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Germany

Don't Bet On A Global Recession

Op-Ed: deep uncertainty in markets around the world doesn't change two basic structural facts that will stave off recession: credit is available, and emerging countries are joining the world economy's top ranks.

Which way is up? The developing world holds the key for global growth. (Presleyjesus)
Which way is up? The developing world holds the key for global growth. (Presleyjesus)
Thomas Exner

BERLIN - If we take developments on the stock market as an indicator for future development of the real economy, the result might well be a panic attack. Investors' grave uncertainties would particularly affect exporting countries.

But here's another way of looking at things: investors who were careless for far too long over-reacted to Eurozone problems and the downgrading of the US credit rating. And while concern about the state of world economic affairs is certainly justified, as long as there are no liquidity shortages and blocked credits -- as there were during the bank crisis – a worldwide recession is unlikely.

At the end of the day, the decisive longer-term growth engine – emerging countries joining the top ranks of the world economy – is still intact, although there are some warning signs of over-heating. The marked sinking of oil and commodity prices as a result of the crisis will at the very least dampen that.

There is no doubt that, as one of the world's top exporters, Germany will not be able to avoid a slow-down. Suppliers depend on their customers in both good and bad times. However, in the past, the German economy has been very successful at finding new markets and minimizing dependence on any one source.

The country's vulnerability has diminished. German companies are among those profiting most from the economic growth of emerging countries. They equip the industries being created in those countries with machinery and capital goods, and meet consumer demand coming from a fast-growing middle class.

If they can hold on to this position, then at least mid-term perspectives for the German economy aren't so bad – because countries like China, Brazil and India will be using the vulnerabilities of over-indebted industrialized countries to build their positions on the world market.

Nor is it to be excluded that there is a growth in demand, in the not too distant future, even from countries like Italy, Spain or the United States that appear weak right now. Austerity measures alone aren't going to solve their problems. That would go hand in hand with a comprehensive modernization of their industry structures so that they are once again competitive.

These are opportunities that institutional and private investors – even with all the fear permeating the markets today – should not lose sight of.

Read the original article in German

Photo - Presleyjesus

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Geopolitics

For Erdogan, Blocking Sweden's NATO Bid Is Perfect For His Reelection Campaign

Turkey's objections to Swedish membership of NATO may mean that Finland joins first. And as he approaches an election at home, Turkish President Erdogan is playing the game to his advantage.

For Erdogan, Blocking Sweden's NATO Bid Is Perfect For His Reelection Campaign

January 11, 2023, Ankara (Turkey): Turkish President Recep Tayyip Erdogan at the International Conference of the Board of Grievances on January 11.

Turkish Presidency / APA Images via ZUMA Press Wire
Pierre Haski

-Analysis-

PARIS — This story has all the key elements of our age: the backdrop of the war in Ukraine, the excessive ambitions of an autocrat, the opportunism of a right-wing demagogue, Islamophobia... And at the end, a country, Sweden, whose NATO membership, which should have been only a formality, has been blocked.

Last spring, under the shock of the invasion of Ukraine by Vladimir Putin's Russia, Sweden and Finland, two neutral countries in northern Europe, decided to apply for membership in NATO. For Sweden, this is a major turning point: the kingdom’s neutrality had lasted more than 150 years.

Turkey's President Erdogan raised objections. It demanded that Sweden stop sheltering Kurdish opponents in its country. This has nothing to do with NATO or Ukraine, but everything to do with Erdogan's electoral agenda, as he campaigns for the Turkish presidential elections next May.

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