Germany’s disappointment, Britain’s lesson.

Germany is not immune to the pain and German GDP ‘likely to have shrunk’ in Q4, the British media breathlessly reports. Oddly enough, Germans themselves aren’t that bothered. Spiegel Online (a publication which is by no means kind to the government) calls it ‘Boom boom Deutschland’ and quotes a representative of business leaders characterising the mood as ‘clearly positive’.

What is with the lack of pessimism and crisis? After all, Germans aren’t exactly known for their sunny view on life. Time for me to play armchair economist/sociologist/psychologist:

Germany is a nation of savers, whereas Britain has a debt problem. Britain’s government and people have overstretched themselves - having subscribed to the ‘buy now pay later’ mentality for years. Here are some figures* – levels of personal debt (as a ratio of disposable income in 2010) in Germany were 60% of what Britain had to contend with.

It’s certainly clear that Germany has had a much better time of the global financial crisis. Since 2009 – when the recession really started to bite and GDP declined by 5.1% – unemployment never went above 2007 levels and, unlike Britain, has been on a downward trend since. Unemployment is certainly the biggest driver of fear in the economy, so that could explain some of the optimism. But despite some pretty dismal indicators going forward, the Germans still believe they will come through this crisis as well as the last one. The lack of fear will certainly keep the consumer side of the economy going – and take the edge off the negative effects – so they might well be right to be confident.

While the economy is a complex tapestry, a nation of people who don’t fear the next credit card bill is better suited to weather this economic storm. This is an area in which the British could learn a lot.

At least it would make the news less depressing to watch...

 *Cherry-picked to ‘prove’ my point.