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DAX rocked as storm clouds form over Germany

Photo by Prometheus Design on Unsplash

The DAX has dropped sharply over the week before rising slightly in the last day. The index peaked at 13,910.12 on Tuesday before tumbling to 13,626.71 on Wednesday. Since then, it has risen again to—at time of typing—13,687.17.

The news follows last week’s announcement that the falling level of the country’s Rhine river was hampering industry in the western part of the country, the nation’s economic powerhouse for decades.

As I wrote last week, “The Rhine runs through the west of Germany, past the industrial powerhouse cities of Cologne, Dusseldorf, and Bonn. Meanwhile, the Danube is also ‘gummed up’ with trade being stymied. Barge rates are thought to have risen by 30% in a single day at one point.”

The situation has not improved in the time since. Earlier this week, Deutsche Welle said that the river was still drying up.

It wrote: “Water levels on the River Rhine in Germany continue to sink, forcing companies to seek alternatives for the freight they send up and down the enormous waterway.  At one notorious shallow point at Kaub, between Mainz and Koblenz, the water level had dipped to 32 centimeters (12.5 inches) by late morning; five centimeters lower than the same time the previous day. The water level doesn’t indicate the literal depth, but rather how far above an extremely shallow benchmark it is at any given time.  The low water levels on the key shipping artery for Germany’s main industrial areas have already affected freight, even though it is ultimately up to shipping companies to decide which vessels, under what loads, can still navigate the waters.”

Meanwhile, the ZEW Institute is reporting that investors are more pessimistic about the German economy than at any other point since the great financial crisis.

Some sources have put the blame for Germany’s economic woes on other reasons, namely the fact that we are living in what future academics will call an ‘interesting period in history’.

As the FT reported, “Economists have slashed their estimates for growth in Germany and the wider eurozone this year, while raising their inflation forecasts and warning that an end to Russian energy supplies would force Berlin to ration gas supplies for heavy industrial users.”

Pete Carvill

Pete Carvill is a reporter, writer, and editor based in Berlin who has been writing for the B2B and mainstream media since 2007. He is a contributing writer for Expert Investor and, in addition, has...

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