The influence of the global crisis on german economy

The decrease of import had a direct effect on the big exporters of the world including Germany. Many orders were canceled and many companies, which used to export a number of products to the USA experienced a decrease in their turnover. For example, the car industry has suffered enormously. Americans used to buy big and prosperous cars and car manufacturers such as BMW made annually great sales in the USA. Since the economic crises and the reserved consumer behavior of the Americans, fewer cars were sold. The sales of BMW decreased significantly, the number of worldwide sold cars dropped by about 23.8 % in 2009 (Spiegel online, 2009a).

The increasing amount of speculations and trading with oil contracts in order to hedge against the depreciating dollar is playing an important role nowadays. Oil, with its predictably easy market rules and the increasing rate, seems to be a good way for profit maximizing. In fact, the world consumes about 86 million barrel oil per day, the trading volume is 15 times as high. This difference represents the predictions of future price developments. The result is that 45% of all oil contracts are concluded by the speculators (Balzli, Hornig, 2008).

Whereas, the additional reasons are as following: the more expensive costs for production and transport because of the whole current situation in the world and the momentarily recovering demand of oil by the US-economy, commonly known as the worldwide biggest oil consumer, as well as by Asia, Latin America and Near East. Furthermore, nowadays there is a cartel of twelve countries, the oil production countries of The Organization of the Petroleum Exporting Countries (OPEC). The OPEC general secretary Mr. Abdalla el Badri states, that even a price of 50$ per barrel would not be enough. A price of at least 70$ would be necessary to gain a reasonable receipts. Besides, the expanding monetary policy of the issue banks will increase the consumer prices as well. Oil price increase leads to a smaller consumption, less investments and savings as well as profits. Oil is an important raw material and energy carrier in a worldwide producing sector as well as the whole transport, logistic sector or private consumption.

The research has proved that the high oil prices could be reduced with the help of a lower OPEC production amount, which is not realistic due to the current high price. In addition, less speculation could contribute but this is unlikely to happen as the dollar does not seem to recover in the short-term. For this reason, the only possible solution could be increasing demands for which a better economic worldwide situation is necessary. Until that high oil price will continue to have influences and consequences on Germany. Therefore, companies in Germany have to deal with high transportation costs for goods imported from foreign countries and transportation expenses of trading partners including petrol for company cars. However, the most striking point for Germany, which is a mainly exporting country, are less orders from abroad because the international trading partners cannot afford the costs of transportation including oil.

As every individual and every company are fighting for financial surviving and consequently have to save as much money as possible, suppliers of different goods and services get fewer orders. For this reason several, but essential for the good development of business, trading partners fall out. This happens because they are unable to enter more orders or because they are bankrupted and declared insolvent. In turn, the company, depending on the trading partners, does suffer from the fear of going out of business as well. It cannot fully act as trading partner for other companies. This particular situation recalls circle, with a starting point that could be set in the USA crisis, without a point of ending in the current time and finally resulting in economies that become constantly weaker.

These worldwide circumstances could be applied for Germany. Many firms, particularly SMEs, as well as huge and traditional groups within Germany, are going in bankruptcy. The most recent, big insolvency is Arcandor, which is a holding company located in Essen, Germany, that oversees companies operating in the businesses of mail order and internet shopping, department stores and tourism services. After a long course of fighting the rejection of essential financial help from state was the final step. Consequently, the group itself as well as all subsidiaries having 100 % of sharing is involved. According to the Federal Minister of Economy Karl–Theodor zu Guttenberg, the provided 150 million EUR does not comprise the amount of contribution required by the government from the shareholders (Spiegel Online, 2009b).

It is a fact that the crisis is progressing to a certain extention not only German MNCs face problems; but also the companies working only domestically in Germany. Similar to the worldwide situation, the circumstances and time for doing business in Germany are difficult. German companies have to deal with several problems, e.g. fewer orders are made because less trading partners result in a lower profit and consequently are unable to pay employees. The companies can apply for governmental financial help or find solutions for themselves by adapting their business’ concept and strategy as well as by looking for possibilities of saving money in cheaper ways of production or giving notices to employees. Despite trying all opportunities of saving money, gaining new partners or receiving financial help a lot of enterprises in Germany go into bankruptcy.

Transports handled in German sea ports fell by nearly one fifth in the first quarter of 2009 compared with the same period in the preceding year (see figure 4). In August of 2008 the transport volume rose by around 10%, but growth has fallen sharply since September of 2008 and decreases in the transport volume have been observed since November of 2008. The worst result so far was recorded in February of 2009 (-20.9%).