BERLIN -- Around the world, some economists and governments have their doubts about whether costly fiscal-stimulus measures will work. But in Germany, one measure already is a roaring success.
Germany's â¬2,500 ($3,200) subsidy for people who scrap an old car and buy a new one has triggered a stampede to dealerships and a run on small cars. It's also inspiring retailers of other products, from electronics to false teeth, to copy the idea.
Falling car production has become a significant drag on the economy in Germany, Japan, the U.S. and other major car-producing nations. The sector's sales crisis knocked about 0.6% off Germany's gross domestic product in the 2008 fourth quarter, according to a report by Credit Suisse, contributing to the 2.1% overall contraction in Europe's biggest economy last quarter.
Germany's auto industry made 17% fewer cars in the fourth quarter than in the year-earlier period, as the global economic slowdown hit exports at BMW AG, Daimler AG and other car makers. The industry's importance to Germany -- where the government estimates that around one in seven jobs depends directly or indirectly on autos -- led Chancellor Angela Merkel's government to introduce the old-for-new car subsidy. It took effect Jan. 27.
Since then the program has sparked a car-buying craze in a nation notoriously reluctant to consume. Sabine Mumm, a librarian from Schleswig-Holstein in Germany's north, decided last month to buy her first new car in more than a decade. It took several weeks before she found a dealer with any in stock.
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A survey by research institute Forsa found that of 16 million Germans who own a sufficiently old car, 1.2 million people firmly plan to use the scrap bonus and many more are thinking about it. Many may be disappointed: The government plans to reward only the first 600,000 new-car purchases.
http://online.wsj.com/article/SB123578485862598527.html
Time deposits in Germany as of Dec 2008 : 1275 billion EUR. Saving deposits : 535 billion EUR. Up 18,7 % and 12,8 % respectively.
Source : Deutsche Bundesbank
http://www.bundesbank.de/download/statistik/bankenstatistik/S131ATIMB2627.PDF
Time to spend some money !
Germany's â¬2,500 ($3,200) subsidy for people who scrap an old car and buy a new one has triggered a stampede to dealerships and a run on small cars. It's also inspiring retailers of other products, from electronics to false teeth, to copy the idea.
Falling car production has become a significant drag on the economy in Germany, Japan, the U.S. and other major car-producing nations. The sector's sales crisis knocked about 0.6% off Germany's gross domestic product in the 2008 fourth quarter, according to a report by Credit Suisse, contributing to the 2.1% overall contraction in Europe's biggest economy last quarter.
Germany's auto industry made 17% fewer cars in the fourth quarter than in the year-earlier period, as the global economic slowdown hit exports at BMW AG, Daimler AG and other car makers. The industry's importance to Germany -- where the government estimates that around one in seven jobs depends directly or indirectly on autos -- led Chancellor Angela Merkel's government to introduce the old-for-new car subsidy. It took effect Jan. 27.
Since then the program has sparked a car-buying craze in a nation notoriously reluctant to consume. Sabine Mumm, a librarian from Schleswig-Holstein in Germany's north, decided last month to buy her first new car in more than a decade. It took several weeks before she found a dealer with any in stock.
...
A survey by research institute Forsa found that of 16 million Germans who own a sufficiently old car, 1.2 million people firmly plan to use the scrap bonus and many more are thinking about it. Many may be disappointed: The government plans to reward only the first 600,000 new-car purchases.
http://online.wsj.com/article/SB123578485862598527.html
Time deposits in Germany as of Dec 2008 : 1275 billion EUR. Saving deposits : 535 billion EUR. Up 18,7 % and 12,8 % respectively.
Source : Deutsche Bundesbank
http://www.bundesbank.de/download/statistik/bankenstatistik/S131ATIMB2627.PDF
Time to spend some money !
