THE TELEGRAPH: Germany has slashed its growth forecast, admitting in an embarrassing volte-face that the economy will contract by 6pc this year in the worst recession of any major country in the Western world.
Economy minister Karl-Theodor zu Guttenberg said the slump was almost entirely due to the collapse of exports, insisting that a "global revival" will restore growth next year.
Even this may be too optimistic. The International Monetary Fund expects a further 1pc contraction in 2010. Left Party leader Oskar Lafontaine said Berlin seemed to be hoping and praying that other countries would "pull the German economy out of the mud", sitting on its hands as unemployment reaches 4.6m next year.
Professor Tim Congdon from International Monetary Research said company bank deposits in the eurozone have begun to contract at rates not seen since the early 1930s, threatening severe damage in coming months unless the European Central Bank shifts gears fast.
"It's a catastrophe. Company bank deposits have been falling at 1pc a month since December. It is what happened in the US during the Great Depression, and it is why we are seeing such a horrific recession in Europe now," he said. >>> By Ambrose Evans-Pritchard | Wednesday, April 29, 2009
