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Back in 2008 when the economic crisis hit the USA and Europe, Germany was the world's largest exporter. Before this, Germany had done well even when some of their trade partners like the USA and other European countries were in a recession because they made up for by selling more to countries like China and India. Germany's goods are in demand all over the world, so there is never a time when their exports aren't needed. But the global recession that we have seen the last few years has been so bad that Germany hasn't been able to make for the lack of exports that they are used to. Machine building is one of Germany's most important industries that employees almost a million people. With the problems of the global recession, companies from places like the USA have decreased their orders significantly over the last few years. One of the big problems is the lack of lending from the banks, with less lending comes less spending on things like the machines that Germany produces. In the past Germany has exported two-thirds of the machines it has produced, that has not been the case the last few years. Back in 2008 and 2009, Germany saw their overall exports drop two to three percent in some months. Many companies in Germany were forced to lay off several workers with the lack of demand for their usual very popular products. The machine and auto industries especially struggled with very low demand for these types of products in a recession. Germany's exports count for more than one-third of the it's national output, which shows how important its exports are to its success. With fewer exports, Germany's surplus in their current account declined in 2008. Although, with still a great number of exports and less imports because of the recession, their current account never made any drastic movements.

Many people believe the Germany got out of the hard financial times better than any other country. You didn't see near the impact on Germany that you did on other countries. Some saw this as a surprise because German banks were some of the last to buy into subprime mortgages in the USA back in 2007 before the financial collapse. Before the debt crisis in Europe, countries like Greece, Portugal, Ireland, Spain and Italy all experienced rising interest rates. All these rising interest rates began to diverge and it led to the beginning of the debt crisis. However, in Germany during this same time, interest rates fell making it easier for them to finance their own debt. Today, the European Central bank has a record low interest rate of .75 percent. This is to help the struggling countries that use the Euro. Since Germany has so many exports, they are helping out the countries around them a lot with these record low interest rates. Since Germany uses the Euro, their exchange rate is dependent on the Euro. The following graph shows the fluctuation of the Euro exchange rate since crisis.

Just like most other countries that have experienced the recession over the last few years, the Euro exchange rate fell pretty low when the crisis started and has fluctuated a lot over the past few years.

Government intervention taking place in Germany has been less extensive than in other troubled European



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