Germany, it seems, has had enough with its taxpayers implicitly bearing the burden of the rest of Europe’s profligacy as the final solution chosen for Cyprus clearly shows (especially in light of pending German elections). But with all that ‘stabilitee’ based on one nation’s shoulders, the following chart suggests Europe’s Atlas is about to shrug. For the last six months, non-German Europe has seen its economies collapse with PMI New Orders pushing new lows now – after some brief episode of hope at the start of the year. Germany, in the meantime has been surging back as expectations of recovery have led sentiment higher and hopes for a European green shoot renaissance. That is until recently. In the last month, Germany’s economic momentum has faltered; the green shoots are wilting; and combining real economic weakness with the Europe-wide deposit outflows (hurting the ‘financial’ economy), Europe is back in the crosshairs.
Chart: Credit Suisse