The 2013/04/04 at 08:50
Marie Luginsland, in Germany
In the eyes of a majority of the 3.6 million enterprises in Germany, Cyprus is no more than an island in the middle of the Mediterranean, carrying little weight in the German trade balance, as it holds 72nd place amongst Germany’s economic partners, just after Bosnia and ahead of Lebanon.
Very few enterprises have invested in this country. So rather than worrying about the salvaging plan for Cypriot banks itself, German companies are above all concerned about its effects on financial markets. “The German economy is primarily concerned with the stabilisation of the single currency. The insecurity felt by certain savers and certain financial institutions should not put into question the progress made to resolve the financial crisis elsewhere in Europe,” declares Ilja Nothnagel, Foreign Trade Expert at the DIHK, the federation of German CCIs.
This desire for stability is also expressed by Eric Schweitzer, the new President of the DIHK. “Cyprus needs our help, but not in any conditions. The country should not be privileged compared with Greece, Ireland or Portugal,” he declares, reminding that Cyprus covers the surface area of merely three Berlin districts and that its GDP is equivalent to 0.2 % of the Eurozone’s GDP.
Hailing the actions of the German government, Eric Schweitzer supports the Chancellor’s position that consists in wishing to accompany aid with measures to make Cyprus more competitive. In his opinion, Berlin’s position in the midst of the Cypriot crisis is coherent with the general attitude adopted ever since the onset of the euro crisis.
“New disorder surrounding the euro will certainly not lead to economic stabilisation. We would also be playing with fire if we questioned the euro, and the risks would be impossible to delimit,” declares Eric Schweitzer. “The euro is essential to German enterprises as we mainly live on exports. Let’s take the example of Switzerland. The franc was almost one to one with the euro but the economy has been severely affected. The case would have been the same for us if we’d kept the deutschmark. The euro makes our products cheaper.”
This desire for stability prevails amongst German company heads. All the more as after a difficult last quarter in 2012, the horizon is clearing up once again for the German economy. “The economic situation is stabilising for our enterprises. All branches, primarily the industrial sector, are looking to the months ahead with optimism. Since the start of the year, export forecast figures have visibly gone up, with demand mainly coming from emerging Asian countries and the USA,” observes Ilja Nothnagel, noting that Germany expects growth of 0.7 % this year.
According to the DIHK, discussion on saving Cyprus can only revive the debt crisis and inevitably leave traces on the German economy.