German economy under pressure from bank losses and euro crisis

Bond investors have snapped up German Bunds in recent weeks, with Europe’s sovereign debt crisis triggering a flight to quality. But is Germany really the safe haven it appears? Credit explores potential vulnerabilities in the German economy and assesses the outlook for Bunds.

Downbeat: Chancellor Merkel has come in for domestic criticism

In December 2008, a few months after the collapse of Lehman Brothers, German chancellor Angela Merkel addressed members of her centre-right Christian Democrat party in Stuttgart, the capital of Baden-Württemberg. In a nod to the region’s reputation for frugality and hard work, she suggested the crisis might have been avoided had Lehman executives heeded the advice of a local housewife. “She would give some short and correct advice, which would be this: you can’t live beyond your means,” said