Redwood: How strong is the German motor?

REDWOOD

It has been conventional wisdom in markets that the German economy is the strong motor of the euro.

Investors have chosen to ignore Mrs Merkel's occasional warning that even Germany is not strong enough to prop up all the debts and deficits out there in euroland. She has her reasons for wishing the southern states to pursue austerity policies to cut their borrowings. Many put it down to politics, as the Germans are not keen to subsidise the south, rather than to a lack of capacity to pay the bills. Now the German economy is slowing, some may revise their views. The German economy has had a very positive balance of payments, thanks to strong exports of cars and other manufactured items ...