Russian Sanctions Leading To Economic Contraction... In Germany?

Tyler Durden's picture

It is no secret that the gist of western thinking has been that sanctions against Russia would pressure its economy enough to force Putin to finally crawl to the negotiating table, tail between his legs, and beg for western forgiveness. Call it the law of unintended consequences striking once again, because while Russia's economy continues to hum along (if only for now, something that can't be said about Ukraine's) and has forced the Kremlin to seek a variety of deals with China to avoid western isolationism, one other country may have been crippled far faster than Russia: Germany.

As Germany's Bundesbank reported overnight, in its latest current monthly report that was widely ignored due to the blanket media coverage of events in the Ukraine, if not so much in Gaza, "Germany’s economy may have stagnated in 2Q."

Who is to blame? Why the ongoing Ukraine conflict of course, and more specifically, the western response to it. As Deutsche Welle reported, "the institution said in a monthly report released Monday that second-quarter growth in Germany had likely slipped due to turbulence in Ukraine and Iraq and a number of public holidays which led to shorter work weeks."

More from Bloomberg:

  • “Economic growth in Germany markedly lost momentum in the first two months of spring,” the Bundesbank says in its monthly report.
  • “Activity in the construction industry declined, as expected, from very high levels in the winter that were bolstered by mild weather"

Yes, in Germany the "winter weather" was actually a boost to the economy. Sure, why not.

  • Says manufacturing activity declined, partly due to geopolitical tensions and timing of public holidays
  • "Considering that the services industry probably kept expanding, seasonally and workday-adjusted gross domestic product in the second quarter may have remained at the level of the first quarter."

Incidentally, nothing the Bundesbank has said is new, considering both hard and survey data coming out of Germany in the past few months have been abysmal. Yet one wonders: if indeed it is the Western, or rather make that American, response to the Ukraine crisis that is pushing Germany into yet another recession, how long until none other than Merkel says "Genug."

If nothing else, it certainly provides some context about the topic of conversation of this World Cup picture taken one week ago.

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TeamDepends's picture

Angela's having contractions?

booboo's picture

Yep, she is finding out what giving birth to the worlds most powerful illegitimate negro baby is like.

BuddyEffed's picture

Seems like you can find people willing to blame just about anything for contraction, both good weather and bad weather, russia, etc, except the most obvious reason being declining inputs directly correlates to declining outputs. 

InTheLandOfTheBlind's picture

Should have flushed that turd in kenya

Kirk2NCC1701's picture

Technically... "Mulatto baby".  Dual Citizen, but still loyal only to one.

pods's picture

Uh oh, Germany is the fastest horse in the glue factory. Does not bode well for the future.

Must be a war is on deck to cleanse the system.


Professorlocknload's picture

'War on deck?'

Already financed, and ground breaking ceremony underway.

GD up!

Eyeroller's picture

So ultimately, it doesn't matter how many planes get shot down (by whoever).

Any response that hurts a country's economy will be taken off the table.



Winston Churchill's picture

300 per day die in US hospitals from dyslexic presciptions.

Not as sexy as a SAM up the tailpipe, sure.

What makes the passengers on that flight so special ?

Your point was what again ?

disabledvet's picture

"All part of the plan" dude. You and I and Angela and Barak and Putin et al are all just part of the programming.

JustObserving's picture

Obama has killed more than 2400 in illegal drone strikes including women, children and wedding parties.  And American citizens. But, apparently, the Nobel Prize Winner has a license to kill:

More than 2,400 dead as Obama’s drone campaign marks five years

Victor999's picture

Someday perhaps you will learn - it is ALWAYS the economy. 

InTheLandOfTheBlind's picture

"So ultimately, it doesn't matter how many planes get shot down in a war zone (by whoever)."


Fixed that for ya.   You will be receiving my invoice shortly.

JustObserving's picture

Germany has to hire a few economists from the US BLS and never have a contraction again.  Truth is so overrated:

Stock market participants might be in for a second quarter surprise. The result of many years of changes made to the official inflation measures is a substantially understated inflation rate. John Williams ( provides inflation estimates based on previous official methodology when the Consumer Price Index still represented the cost of a constant standard of living. The 1.26% inflation measure used to deflate first quarter nominal GDP is unrealistic, as Americans who make purchases are aware.

A reasonable correction to the understated deflator gives a much higher first quarter contraction. The two main causes of inflation’s understatement are the substitution principle introduced during the Clinton regime and the hedonic adjustments ongoing since the 1980s that redefine price rises as quality improvements. Correcting for excessive hedonic adjustments gives a first quarter real GDP contraction of 5%. Correcting for hedonic and substitution adjustments gives a first quarter real GDP contraction of 8.5%.

Winston Churchill's picture

Who says its unintended ?

youngman's picture

the Russian billionaires love the Mercedes Benz....bullet proofed of course...all black

Bioscale's picture

With a decent remote control and advanced features of the car computer... so called third party upgrades. The must love it.

Herdee's picture

I get the funny feeling that after all the propoganda has settled down and the press has had its fill then the U.S. will be forced to admit that it was actually Ukraine that hit the plane.It'll end up being another complete blunder by the State Department and Victoria Nuland's gang of nazi supporting morons.Putin is always one step ahead on diplomacy as you see.The Russians keep silent and release very important military information at a specific time.What you see from Obama is a quick few words on how dead bodies were treated and more direct threats and warnings to Russia.This goes to show how the U.S. will lose respect after the real information comes out.What's the CIA got to hide?Lots.You don't see U.S. military officials doing what the Russians do.

Abitdodgie's picture

"another complete blunder" They will NEVER admit to that , lets just get the nukes flying and get the reset going.

BorisTheBlade's picture

Crazy talk. If current administration had the balls to start nuclear exchange then by virtue of their cluelesness it would've been done by now. Instead, they hide behind empty talk and hope the rest of the world doesn't notice. The scarriest part, they want to look relevant, they want to seem noticed and they have nothing to offer.

demoses's picture

Does CIA / US really need to hide? They control the MSM and with that they control the public opinion. Just today I was at work minding my own bussines as I everheard two collegs behind my back talking about stuff going on in Ukrain. I always thought they were not just two morons but the conversation just went "and did you see what they are doing to those corpses", "and the russians shoot them down... who will stop them?". I just took a deep breath and put my headphones on and played some music. It is just not my role to enlighten ppl. I'm not sure for myself that what I belive is real but hey you just need to keep an open mind and not just follow the MSM memo... Is this world mad? Are we the lunatics? Should I even care about others?

TheReplacement's picture

Sure stay out of the conversation.  What does it matter that the majority of Americans are being propagandized to support an eventual war with Russia/China/Iran?  It's cool.  Just go along to get along.  Don't ask questions.  Don't make waves.  You probably aren't into "politics".  You probably aren't into determining how YOU will live in the future either.  That is someone else's decision.  You'll just get up each morning and do what they tell you.  Yeah, that's the spirit.

InTheLandOfTheBlind's picture

Why stop with not caring for others?   Take it all the way and just hate yourself

Kirk2NCC1701's picture

You COULD gently point out that > 80% of US media is owned by 6 corporations, and if they want a more balanced perspective on what's really going on in the world, that they check out some Alternative Media -- including and especially ZH.

Remember... "Evil prospers when good people remain quiet".

Monty Burns's picture

When you see the MSM drop the story like a hot potato you'll know that the evidence clears Putin.

Circle of DNA's picture

This is insane! Watching Washington throwing its "allies" under the bus without slightest regard for their economies. In fact, ruining Germany economy is one of the objectives here. Following Polish example,  more free blow jobs are coming from EU...What a freak circus

Abitdodgie's picture

After the second world war Germany was and still is under the compleate control of America ( go look up the treaties) and so it nust di whatever we tell them to do , they are not soverigen.

trader1's picture

probably not for much longer.

Quinvarius's picture

Soem people believe Obama has a masterplan.  But he is just arrogant, stupid, and lazy.  He thinks everyone is ganging up on him to ruin his plans every time he does anything.  It isn't his fault everything he does is a catastrophe.

Monty Burns's picture

I'd say he actually has a master plan.  But it was written by his puppeteers and he probably hasn't read much of it.

silvermail's picture

Washington has no allies. Washington has only vassals.

This is not a war against the terrorists. This is classic genocide of civilians, on a national basis:

Shizzmoney's picture

Of course it affects Germany; Russian businesses don't buy shit from the US (unless its real estate so that they can skirt EU tax laws and money laundering).

alexcojones's picture

Germany better ask themselves:

Russia (gas) or NATO (False Flags by US & Israel)

And the Plot Sickens.

Whistleblower: U.S. Satellite Images Show Ukrainian Troops Shooting Down MH17

  "Award winning former Associated Press reporter Robert Parry has been told by an intelligence source that the United States is in possession of satellite imagery which shows that Ukrainian troops were responsible for the shoot down of Malaysian Airlines Flight 17."

Merk? Your move.

Kirk2NCC1701's picture

+2.  For "And the Plot Sickens" (clever!), and the link.  Thanks, AlexJonesCo.

ali-ali-al-qomfri's picture

tatzechlich, You chose Germany;

Russian Oil


Western Intermediary Turmoil


One keeps you warm on a cold Russian night, the other vaporizes you out of sight

BullyBearish's picture

Russia, China, Germany...quite an assemblage to put a serious dent in the Luciferian's plans.  If only we could join them as well.

Kirk2NCC1701's picture

And don't forget London (The City) as part of the equation.  The rise of Frankfurt as the natural hub for European banking is a Zero-Sum game for London.

Fuku Ben's picture

Just more global contractions in the birthing of the beast

novictim's picture

There is no doubt that sanctions are a two edged sword. 

But the unintended cut to the German economy is probably for the best.  After the Berlin Wall came down and the Russians pulled back due to economic collapse, the Germans did "the Christian thing" and started deliberately pumping investment money and aide into Russia. 

Was this more "Stockholm syndrome" or Christian "cheek-turn"?  Probably both.  I mean, the Russian troops who invaded at the end of WWII were forced to keep RAPE DIARIES to prove they had brutalized the German Population after their victory in 1945.  Germans in the West, hearing the stories of these Russian Animals gang raping their way around Berlin, made no significant protest.  They were guilt wracked after having the full details of the Jewish Holocaust exposed to them. 

Germans felt "We deserve this".  Which is sick as there is no such moral or ethical validity to group punishment (such as what is happening in Gaza) or ideas of “racial guilt”?

But this sense of collective guilt for what Hitler and their Reich did to Russia and the Jews has lasted until this current time.  How strong an impulse is this?  I think it is on the wane today with most Germans feeling they are not personally responsible for the past.  And of course they are not.

Yet there have been business opportunities in Russia as well and the astute German Oligarchs took advantage of the mood to help steer their investments this way as Russia embarked on the path to democracy.  Russian potential as a great European economic engine is real and the Germans have known that and helped foster this.

But now Russia has turned away from the democratic path.  It now has an influential  kleptocrat class that sees an elected dictatorship as being a viable "3rd Way".  Now its news media pretends that Russia is not part of the West, that it has no stake in the growth of the idea and realization of democracy with popular elections and the meaningful expression of the popular will.  This is most evident in the entire shutdown of discussions regarding CORRUPTION.  It would appear that Putin's cult of personality has branded anti-corruption groups as "Western Traitors"

So now the German oligarchs have to wonder whether investments in Russia will go the way of western investments into China.  A rich capitalist who "owns" a factory in China really owns nothing but a IOU that he might get it back when hell freezes over. 

Capital controls and the breakdown in the legal system in Russia leave all foreign investors vulnerable to extortion and the loss of legal ownership rights. 

So pulling out of Russia may hurt Germans but it will help Germany more in the long run.  The smart money will continue to flee Russia much as it has been doing in China.

Monty Burns's picture

Germans felt "We deserve this". 

Yes, which was the main justification for concocting the Holocau$t fable. Tens of billions were extracted from that unfortunate devastated country and the shakedown goes on to this very day as new 'survivors' keep emerging.  The good news is that more and more people are doing their own research and no longer accept the Prescribed Truth.


Fix-ItSilly's picture

Yeah, yeah... because it can't be European economic stagnation and decline in the PIIGS and France. Nor the high Euro value. It has to be... sanctions.

Canucklehead's picture

Nothing says Russia is on their own like reading these comments.  Imagine, sharing a room with these mental midgets...