Germany has often been characterized as being a strong nation economically, and also a popular country of establishment for foreign companies. According to Swedbank's most recent report, the financial crisis has had a negative impact on the country business-wise, and some areas have been affected more than others. However, unemployment remains relatively low.

The German economy is predicted to decrease by 5 ½ percent this year. Mainly industrial and financial sectors have been affected by the crisis, while unemployment increased slightly. Households are able to manage the situation relatively well due to that fact that unemployment still is relatively low.

Germany is still an export-dependent country. When the incentives are withdrawn and the budget has to be consolidated, the private consumption is not likely to develop as much. In addition, the low rate of investment ahead is preventing growth which will reach only 1 ½ percent by 2011.

Public opinion polls suggest a continuation of the coalition between the two largest parties after the election on September 27th. This could retain the pace of reform in the German economy, which also affects the rest of Europe. Sweden and Germany share the need to enhance trade in services.

Sweden has a lot to learn from Germany in terms of youth unemployment and apprenticeship systems. For both countries, it should be of interest to work for improved industry-related services. A better European integration and a greater mobility of workforce in Europe would support the development of the service sector.

                                                                                     Cecilia Helland