‘Getting away from sanctions is the only way to stop EU economic downturn’

‘Getting away from sanctions is the only way to stop EU economic downturn’
The EU economy wasn’t doing well but sanctions against Russia have worsened it even more, with Germany seeing a decrease in industrial output and exports by 5 percent, which is not a simple downturn but a collapse, economic analyst Michael Mross told RT.

RT:Germany now expects only 1.2 percent growth this year, despite earlier forecasts of almost 2 percent. What’s behind such a drop in productivity?

Michael Mross: I can tell you it will become even worse. The numbers that we have now on the table showed that economy is not doing very well and it is getting even worse. [In] Europe and the eurozone at the beginning of the year the economy was already very fragile, and what made it even worse was of course sanctions that were imposed on Russia. In Germany alone we have a decrease in industry and export output by more than five percent. This is not only a downturn, this is a collapse, what we call it here in Germany, and it’s a very big disappointment. The only way to get up is to solve the problems with Russia and get away from the sanctions.

READ MORE:German economy in ‘choppy waters’, as growth forecast slashed to 1.2%

RT:How dangerous is Germany's decline for the entire eurozone economy?

MM: It will draw all the European countries even deeper. We have already had those very difficult and hard problems in the southern periphery – in Italy, Spain, Greece and now also France. If Germany is not well, then it will become even worse for all of these countries.

RT:Germany's economy minister has blamed geopolitical tensions and global economic problems for the slowdown. How much of that is true?

MM: The geopolitical situation is very important for Germany because we are an export nation number one. When you take the geopolitical crisis, not only the Ukraine issue, but also Ebola, ISIS, this is of course very bad for Germany and very bad for the eurozone. We have now all these discussions about austerity when it comes to France, for example. I have to say that France was always a country that lived from the depreciation of its own currency, of devaluing its own currency, but now it’s not working anymore because we are together in one currency, in the euro. And now the question is what the remedy of the doctor is. Take two patients, the one has high blood pressure, the other has low blood pressure, and you have only one pill. Which pill will you give them? This is a dilemma that we have here in the eurozone, so many people now come to the conclusion Germany has to exit the eurozone in order to make it better for all the remaining other countries.

RT:Austerity measures were set in most of the EU countries but they seem to be not working. Still austerity proved to be successful in the UK. Why?

MM: If you have problems, if the economy is not doing well the first remedy is of course to make higher debt in the country. But they cannot do it because of all these restrictions that we have and because we are very cautious. We have a problematic situation within the eurozone that some countries, or one country, is doing very well and the others have many problems. So no doctor has a cure, no doctor has a medicine for this problem. My prognosis is that at the very end of the day all those remaining countries, including France which has no big problems, they will tell Germany to get out of the euro, they will throw them out of the euro in order to have some relief.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.