[fluffy0000]

German Economy Is ‘War Zone’ as Exports Dwindle
By Brian Swint and Jana Randow
March 12 09'(Bloomberg) -- Germany is facing the biggest economic slump since World War II as a reliance on exports shows itself to be the country’s Achilles heel.
Industrial production fell 7.5 percent in January from the previous month, the most on record, a report showed today. Factory orders plunged a record 38 percent that month from a year earlier, and the economy is likely to shrink the most since modern records began in 1950 this year.
“Germany’s industrial landscape now looks like a war zone -- completely obliterated,” said Dominic Bryant, a European economist at BNP Paribas SA in London. “That is the price it is paying for being too focused on exports and not stimulating enough internal demand.”
Companies from carmaker Bayerische Motoren Werke AG to chemical company BASF SE are cutting back production as the collapse in demand for German goods overseas blows back into the domestic economy. With unemployment increasing, Chancellor Angela Merkel is stepping up efforts to stimulate the economy with tax breaks and investments in schools and roads.

The euro fell against the dollar today, trading at $1.2765 as of 3:43 p.m. in Frankfurt. The 16-nation currency has declined about 20 percent since July.

Germany’s economy will shrink 3.7 percent this year, the Kiel-based IfW institute said today, lowering a prediction for a 2.7 percent contraction made in December. Germany’s worst post- war performance so far was a 0.9 percent contraction in 1975.