By Quentin Peel in Berlin
It is the season of Christmas markets in Germany, with town squares the length of the land packed with stalls selling traditional seasonal wares, from gingerbread cakes to hot spiced Gl?hwein, wooden toys and sparkling decorations.
There may be a eurozone crisis, but the shopkeepers and stallholders on German streets are expecting another bumper season. The financial markets are in disarray, but consumer confidence in Germany is up.
That was the gist of the report from the Consumer Research Society (GfK) in Nuremberg this week. Their consumer climate index rose from 5.3 to 5.4 in November and they expect another increase to 5.6 in December – the highest level since last May. Average spending per person on Christmas presents will be 241 euros, they say, just a fraction below the level last year.
The mood in Germany today seems quite different to that in most of the rest of Europe. The grim warnings of imminent apocalypse that pervade the pronouncements of politicians and pundits in London and Paris, Rome and Madrid, are barely to be heard in Munich or Berlin.
It is not as if people are not anxious. Germany would not be Germany without a dose of angst. They are worried about the euro and the safety of their savings. They are worried about
government debt and the return of inflation. But they simply do not share the view that the eurozone is in danger of collapse.
The biggest German story of the past three weeks has not been about the plight of the common currency, but something quite different: the discovery of a neo-Nazi terror cell, responsible for a string of racial killings over the past decade.
So, is Germany in denial about the dangers of the eurozone crisis, or is there something more profound about the phlegmatic response of ordinary consumers?
Part of the answer is clearly that the German economy has been doing very nicely while the eurozone periphery has slumped into recession. Economic growth this year will be close to 3 per cent, although it will slow to about 1 per cent next year. More relevant to consumers, employment is up and the total out of work is down to 2.7m – the lowest for 20 years.
Wednesday?s figures from the Federal Labour Office showed seasonally-adjusted unemployment down another 20,000 – compared with a drop of just 5,000 expected by economic analysts – leaving the jobless rate at 6.9 per cent.
As for German exports, the real motor of Europe?s largest economy, they grew by a remarkable 12 per cent this year. Anton B?rner, president of the foreign trade association, says he is ?cautiously optimistic? they will be up by at least 6 per cent in 2012, in spite of the weakening global outlook.
?Stormy times on the financial markets are accompanied by remarkably calm waters in the real economy,? he said.
The other part of the answer to Germany?s refusal to panic is the widespread conviction – shared by Angela Merkel, the chancellor, and Wolfgang Sch?uble, her finance minister – that short-term fixes, huge central bank intervention in the bond markets, or the issuing of jointly-backed eurobonds for debt-strapped eurozone governments, are not the right answer.
Ms Merkel?s insistence that the crisis can be answered only with long-term solutions – reducing debt and changing the treaties of the European Union to enforce ruthless borrowing restrictions in future – strikes a chord with German voters.
Germans are anxious about the debt-fuelled behaviour of their eurozone partners. They do not want to dominate them, but they do want to export their own ?stability culture?. They are
also suspicious of the motives of those crying wolf.
The conservative Frankfurter Allgemeine newspaper declared in a commentary on Wednesday: ?The financial markets are dominated by an Anglo-Saxon way of thinking, which says all the problems caused by excessive state borrowing can be met with money from the central bank – not least to the benefit of the finance houses.?
The answer to such ?short-term and short-sighted excuses? was to improve the discipline of monetary union and regain trust in the markets – ?even if it takes a bit longer,? the newspaper said. Its headline summed up what many Germans think: ?No panic.?
? The Financial Times Limited 2011