Germany's Chancellor, Angela Merkel, has declared Germany officially in recession. The German economy, the largest in Europe, has shrunk for two successive quarters. Its chief financial officer warns that this recession will be "serious." Merkel has advocated drawing up a "risk map" of institutions likely to go under so they can be helped before they bleed too much -- a sort of economic triage.
It's difficult for an outsider to know how to evaluate all this. The ubiquitous construction cranes have not stopped working in Leipzig. Buildings are going up, not into foreclosure. Watching CNN Europe and the BBC each night, I hear interviews with financial experts all across the Eurozone, who seem to say that this global recession is a result of the crisis on the American stock market. If the United States doesn't pull out of this mess, neither will Europe or Asia.
Germany does not have a large national debt. In addition, it has a positive trade balance, being a huge exporter of all kinds of goods. Perhaps that is insulating the country somewhat. But not according to TV reports. One thing, however, does seem clear to me -- here there aren't the foreclosures common in the U.S., with people evicted from their homes, or the factory closings in China, with people milling around outside the gates demanding back pay. At least, not yet.