Germany's strong recovery continues as economy bounces back

Germany's economy is recovering extremely well as it expanded by 3.6% last year, and while this was partly to be expected from such a deep recession it was also due to carefully implemented government measures. These measures ensured that unemployment was kept at its lowest level since 1992 which has ensured a feeling of prosperity in the country with business confidence at its highest level for 20 years.

Germany has always been very good at keeping its public finances under control and it had the added advantage of not experiencing any credit or property bubble, and it has also concentrated on keeping export levels high. Its central geographic position also enabled it to take advantage of cheaper labour from eastern European countries increasing the efficiency of firms. One of its biggest export markets is China as luxury German cars are in high demand, as is machinery for Chinese factories.

While the economy may be booming house prices in Germany are still surprisingly affordable especially when compared to similar properties in the UK. There have been indications in recent months that the property market is beginning to benefit from continuing consumer confidence and that the strong economy is drawing in new investors. The continued recovery has also meant that the construction of new homes has begun once more although anyone choosing to invest here should regard it as a long term prospect. The fact that a high proportion of the population choose to rent rather than own makes this country extremely attractive for buy to let investors.

Europe Needs Turkey as Much as Turkey Needs Europe Says Wulff

Europe "needs Turkey as much as Turkey needs Europe."

Not a statement you'd expect from the President of Germany, given the country's staunch and long standing objection to Turkey's accession into the European Union, but that is exactly what he said.

"We can complement each other in many ways and collaborate for the solution of problems in the Middle East Caucasus and the Balkans," said Wulff, Speaking at a dinner hosted by Turkish President Abdullah Gul in his honour at the Dolmabahce Palace in Istanbul.

He also said:

"Turkey is an important partner for Germany, one with self confidence. However there is yet much we can and must do to enhance the mutual understanding. Building the bridges and promoting the dialogue we aspire, through projects within the scope of the Ernst Reuter Initiative, is my personal desire and our common goal."

"Turkey, with its growing weight in the world, is a very important partner for us in climate change policies, in counter-terrorism, and finance market regulation. Therefore, I shall work within my full capacity to enhance German-Turkish partnership and brotherhood," said Wulff.

The statements came just a few days after a partial visa-free deal between Turkey and Portugal was announced. The deal will cover only citizens that hold a special passport, and will only allow travel for up to 90 days every six months. It still has to be ratified by parliaments on both sides.

These can only be called significant steps in Turkey's process of joining the EU. We have written many times on this blog that EU accession has become less necessary for Turkey in recent times, but we also agree with an article in The economist saying that while EU entry may be a long, long way off, aspiring and reforming towards it are good for Turkey and should continue.

Turkish Property Market May Be Boosted by Removal of Visa-Restrictions with Germany

Aydin Cakir, director of Turkey based Turkish property agent New Home in Turkey has said that the removal or easing of visa-restrictions on Turkish travel could boost the Turkish property market, he said on the company’s website:

“Removal or easing of visa restrictions between Germany and Turkey may also boost the Turkish property market. Germany is Turkey’s largest tourism market, and holiday makers tend to become holiday home buyers, visa-free travel would certainly make visiting a property in Turkey easier, and therefore ownership more attractive.”

The comments came in response to the comments of Mercedes-Benz Finansman Türk General Manager Franz G. Koller, who has indicated frustration at Germany’s failure to cut red-tape on travel and investment in Turkey and Germany, which is causing German businesses to “lose ground” on Turkish investments.

Koller seemed particularly hacked off at the fact that the EU had removed visa-restrictions on travel between the EU and 3 non-candidate countries: Serbia, Macedonia and Montenegro, while Turkey, an official candidate since 2005 has been left out in the cold.

Koller’s statements come days after it was revealed that Turkey is now the fastest growing economy in the OECD and one of the fastest in the world. One of the biggest growth sectors in such a rapidly emerging market is automobile ownership, a status of rising affluence. It is certain that Mercedes Benz would very much like to be part of this growth.