IN GERMANY, ECONOMIC GROWTH IS PERPETUATED




Mustafa AY – TDO – 13.07.2017 Germany assumed the role of brother to EU as it’s allocated the most of the allowances among other founding members to whole EU. That German Central Bank granted loans worth of billions of Euros to Greece and Portugal has not create any trouble for Germany yet. On the contrary, Germany successfully proceeds with its economic growth. Despite all the loans worth of billions of Euros, Central Bank of Germany full of profits coming from the interests of the given credits. German Central Bank’s role of ‘creditor nation’ to EU merely caused the level of profit from interest to decrease. So, German Central Bank lost nothing with the principal, but profits acquired from interest. Germany predicted that money surplus may create overbalance in the economy in the future. So, their frightening foresight may have forced Germans to set up cooperation with domestic firms, domestic entrepreneurs and foreign investors so as to subsidy them with the money surplus. Through this way, it would be able to dispose of the money threatening economic stability. Thus, the credits to those firms seems to have invigorated the economy and enabled economic growth to be perpetuated.

In accordance with the economic indicators within first half of 2017, it managed to have 22 billion Euros from foreign trade surplus. The success in foreign trade proves that the government subsidy to those economic actors was a good decision, even if it was forced to do so. In addition, Central Bank’s monetary backup to the firms on the verge of bankruptcy may have rescued and flowingly stimulated German industry, which enabled German economy to gain momentum apparently. Germany, whose economy is now exhibiting stability, seems to have achieved this feat by appealing foreign investors. All those economic progresses may likely lead the inflation and unemployment rate to decrease by the virtue of increasing competition by increasing domestic investments, in the future. Because, according to the scenarios, the foreign investors companies will come into rivalry with already-functioning companies in the market and then the dependency on foreign commodities/import will be unneeded. If these scenarios are true, German government seems to have succeeded in foreign trade surplus and to have used efficiently.