Agreement with Athens elevates mood in German boardrooms – Reuters Germany

       

– by Reinhard Becker and Joern Poltz

       

Berlin / Munich (Reuters) – The preliminary agreement in the Greek debt drama makes for a better mood in the boardrooms of German companies.

       

The barometer of business confidence rose in July by 0.5 points to 108.0, as the Munich-based Ifo Institute announced on Monday to its survey of 7,000 managers. Economists polled by Reuters were surprised by the change of mood. They had expected after two consecutive declines with a further drop in the important early economic indicator. “The preliminary relaxation in the Greek question contributes to the improvement in sentiment in the German economy,” said Ifo President Hans-Werner Sinn.

       

“Sometimes the Ifo business climate index can really surprise you,” said the chief economist of Liechtenstein VP Bank, Thomas Gitzel. Despite market turbulence in China and complaints German carmaker on sales difficulties in the Middle Kingdom of optimism have even increased. Apparently could the German economy even adverse circumstances currently mastering. [ID: nL5N0ZW27F] [L5N107140]

       

The euro gained after the publication of the data temporarily by 1.2 percent to more than $ 1.11 to – the highest level in two weeks.

       

In mid-July, the international lenders had agreed to the brink of bankruptcy in Greece outlines of a new rescue plan. This is no longer floating the sword of Damocles of a euro exit on the currency area. This made for relief under the managers: “The answers were then even more optimistic than before,” said Ifo expert Klaus Wohlrabe told Reuters. Respondents assessed both the situation and the business outlook better than in the previous month.

        
       

IRAN AGREEMENT PROVIDES A DEEP BREATH

       

As an additional mood was the recent agreement of the five UN veto powers and Germany in the nuclear dispute with Iran, such as the Ifo expert added. Thereafter, should Iran go back its controversial nuclear program, and in return, the sanctions are to be progressively relaxed. The agreement affects it particularly positive effect on the expectations of the chemical and petroleum industry from explained Wohlrabe. The background: In billions of projects in the petrochemical industry in Iran German companies beckons participation. [ID: nL5N1002TL]

       

According to the Ifo also good domestic economy supports the economy. Large impulses from exports are no longer to be expected. “China no longer attracts so strong and the effect of the euro depreciation has leaked” Wohlrabe said. The boom in the People’s Republic had recently cooled. And the still low euro rate offers according to the experts not a new drive for exports to overseas.

       

According to the Federal Ministry of Finance, the German gross domestic product (GDP) will be as high as at the beginning of the year in the past second quarter, when the economy grew by 0.3 percent. The Bundesbank is a bit more optimistic. [ID: nB4N0Z900I] Who is right, shows the middle of August. Then the Federal Statistical Office published the data.

       
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