Germany may be entering recession, but that will be good for Europe

Germany may enter a recession by the fourth quarter of 2019, but this could lead to a key evolutionary period in the economic development of the continent, which could ultimately benefit the region.

As a traditional driver of growth in Europe, German politicians have called for stringent measures and economies of scale in southern Europe after the debt crisis in Europe in 2011. But now that the country is experiencing its own economic problems, Saxo Bank believes that Berlin can start to raise its costs and radically change the economic environment in Europe.

"It will bring them back into the game," said Steen Jakobsen, chief economist and chief investment officer at Saxo Bank. He stressed that the rise of populist parties in the EU elections in May, the upcoming departure of Angela Merkel as Chancellor and the change of the President of the European Central Bank will focus on this dramatic change.

"We firmly believe that any macro change must come from a collapse or crisis and as such we see 2019 and 2020 as key years for Europe's development ... Germany has become too complacent as the EU as a whole. that Berlin will expand its spending to make use of for the rest of Europe.

Germany has attracted the attention of economists as it has shrunk its growth in the third quarter, and then zero growth for the last part of 2018. The slowdown is due to the cataclysms in the country's traditional motor of growth, the automotive industry and the greater delay the global market that affects demand.

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