German Economy in Trouble?

In a picture of role reversal, the German economy has been told that its economy shrank by a worse-than-expected 5 per cent in 2009. What's going on?

Until now, among the developed economies it was the UK which was the proverbial naughty child in the corner. After having partied hard until the bank crash of the end of 2008, the UK watched its currency fall to near parity with the euro for 2009.

While other nations gradually emerged from the recession towards the latter part of 2009, the UK seemed to be left behind. After all, its fall was far greater than that of its European counterparts France and Germany - they hadn't been quite so careless with borrowing and risk-taking so they didn't have so far to fall.

Yet now it is expected that - finally - Britain will be told that its economy left the recession in the fourth quarter. Meanwhile, Germany is concerned that its fourth quarter results will be less rosy.

Indeed, some even think there may be a sharp fall. Yet there are economists who predict a mild level of growth - but encourage a careful reaction so as not to damage the fragile situation.