Economic and Political Challenges for Germany, UK and Europe

ECONOMIC AND POLITICAL CHALLENGES FOR GERMANY, UK AND EUROPE – In the Light of Financial and Energy Markets Turmoil

Britain’s economic growth has started to slow down and new Prime Minister Gordon Brown has faced a torrid time on both the economic and political front. Although cracks have started to appear in the Berlin Grand Coalition, Angela Merkel looks in a more stable domestic political position than Brown. It appears likely that the sub-prime mortgage crisis emanating from the US will have a greater effect on the Anglo-Saxon economies driven by high private sector debt than on manufacturing- and export-orientated Germany.

However, will Germany be bound by early election campaigning instead of keeping to its reform agenda? Is the battle for the electorate going to turn politicians even further towards ideas already abolished by the former social-green coalition? Simultaneously, Britain, Germany and Europe as a whole are trying to find new ways for their foreign policies. Energy resources from politically stable regions are becoming scarce and Asia, the Americas and Europe are trying to secure their share. The German Chancellor has taken a stance for democratic movements, weighing politics and human rights against the economy, while the German Socialists are seeking political direction.

Interest rates are likely to be driven by energy prices and the uncertainty surrounding the real estate market – how will these affect the bilateral and European economies?