What's happening in Germany?

• Yesterday, Angela Merkel tried to defend the German trade surplus by saying this (bloomberg):

I think it would be absurd if we were to try make German companies reduce production or cut back on quality.

Well, yes, that would absolutely be absurd, therefore nobody actually demanded anything like that. What on earth is wrong with German politicians, today? "Oh, look over there - a straw man!" "Attack!" But, she also made less silly claims:

It’s also a fairy tale that workers in German export industries are badly paid.

Compared to what? Chinese worker? Well, true... but a better comparison would be German workers ten years ago.

•  IFO business climate index up significantly. (CESifo)

• Russian threats block Ukraine-EU trade deal (DW) I am not a big fan of the headline. In fact, it is the EU which put massive pressure on the Ukraine: "EU foreign ministers on Monday said Yanukovych had to decide if his country would move toward Europe or Russia" While Russian pressure seems to have been directed at a joint agreement between the EU, Ukraine, and Russia.

•  Journalist talks with an art collector living in self-imposed poverty. There is a problem with his collection though, partly it is what the Nazis called "entartete Kunst" "degenerate art", which his father was supposed to sell for Hitler; partly it is art stolen from Jewish owners; and only some works were bought by his father legally. here's a longer background story.

• ECB's Draghi calls for early move on creditors of failing banks (reuters). 

• The Emerald Isle remains in chains (Yanis Varoufakis)

What's Happening In Germany?

• Germany will introduce a minimum wage (The Local): That was a core SPD demand and there was widespread support for such a move amongst the citizens.

• SPD-Left Rapprochement: A Time Bomb in Merkel's Government (Spiegel): The SPD has until now ruled out that it would form a coalition with the left wing Die Linke. SPD, Greens, and Die Linke would have a majority in the Bundestag. Therefore it is a politically smart move by the SPD to open-up to the leftists. Something I have written about right after the election.

• New report lauds East German development (Deutsche Welle): Actually, it highlights that the Eastern states are still not even close to the west 23 years after the re-unification. This is a lesson that the other eurozone members should think about. The Eastern states are still significantly weaker eventhough trillions of euros were transfered there.
   

• EADS Works Council Urges Caution on Job Cuts From Defense Revamp (Bloomberg): EADS might cut up to 8,000 jobs. The story is lacking one key fact. The management of some of the military programs like the A400M was, well, not all that good to put it extremely mildly. AN70 for example is not only just half the price, it can also carry a heavier payload over longer distances.  

•  Euro-Area Factory Production Accelerates as China Cools (Bloomberg): That report could have and probably should have been called: Germany the only country doing OKish in the eurozone. So not really news, but I would like to add a bit of perspective on industrial production in the eurozone :

I think it is time to pronounce the patient dead.