Germany’s powerful export industry is warning of a credit squeeze in Europe’s largest economy even after the European Central Bank’s recent injection of one-year liquidity into the eurozone banking system.
“For middle- and long-term credit we already have significant difficulties,” Anton Börner, president of the German BGA Exporters Association, told the Financial Times.
Even for short-term credit, Börner predicted banks will “exert massive pressure on borrowers.”
He blamed the squeeze on the delayed effect of the massive hit Europe’s banks took as a result of toxic assets.
The picture is not all bleak, however.
Börner also predicted German exports will increase between 5 and 10 percent in 2010 after slumping around 18 percent this year.
However, he urged governments to resist taking protectionist measures even when national economic stimulus programs benefit foreign companies, calling rules that obligate Chinese and U.S. manufacturers to give preference to local products and services “poison” for the recovery of the world economy, Bloomberg reported.
Germany, the world’s biggest exporter, has suffered as the global financial crisis cut demand for German goods, forcing manufacturers to curb production and cut jobs.
German plant and machinery orders declined the most on record in April from a year earlier, with a 60 percent slump in export orders outpacing a drop in domestic demand by 52 percent.
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