Merkel warns against trade isolation

Bloomberg

Chancellor Angela Merkel warned Germans against turning to economic isolationism, saying she’s “not happy” about the possible collapse of the Trans-Pacific Partnership after US President-elect Donald Trump said he’ll withdraw from the trade accord.
Fresh from announcing she’ll seek a fourth term in next year’s German election, Merkel used a speech to parliament in Berlin to acknowledge voters’ anxiety about globalization in Europe and beyond. She expressed concern about election campaigns that are increasingly using “fake websites, bots and trolls” to shape public opinion in ways that conventional politics is unprepared for.
“Many people these days are concerned about the stability of the order that we’ve grown so accustomed to,” Merkel said on Wednesday in her first major speech since saying on Sunday she’ll run again. “We need to stand for this together, for multilateralism, on shaping globalization together with others—and I will stand for that.”
Without addressing Trump by name, Merkel, the leader of Europe’s biggest economy, defended free trade, including the 12-nation TTP accord.
“I’m not happy that the trans-Pacific accord now probably won’t become a reality,” she said. “I don’t know who will profit from that. I’ll restrain my predictions for now.”
Merkel, whose 11 years in power make her the longest-serving leader among the world’s leading economic powers, cited the pitfalls that have emerged with the rise of populist movements, which include the anti-immigration Alternative for Germany party that’s draining votes from her Christian Democratic Union. Pushing back will requires legal measures against hate speech, she said.
“Opinion formation proceeds differently now than it did 25 years ago,” Merkel said. “We have to learn to deal with that.”
Germany keeps solid pace of Growth as Services Strengthen
A measure of German economic growth held near a 10-month high in November as an acceleration in services activity largely offset a slowdown in manufacturing.
A Purchasing Managers’ Index for manufacturing and services fell to 54.9 from 55.1 in October, IHS Markit said on Wednesday. While that’s the weakest reading in two months, it’s still well above the 50 mark that divides expansion from contraction.
“Although the PMI failed to further build on October’s 10-month high, the latest survey results highlight that Germany’s private sector economy remains in good shape,” said Oliver Kolodseike, an economist at IHS Markit. “The survey data also signal that a healthy labor market remains one of the mainstays of Germany’s economic upturn.”
The Bundesbank said this week that German economic growth will likely pick up considerably in the last three months of the year after a temporary slowdown in the third quarter. The fortunes of Europe’s biggest economy are key to the recovery of the euro region, where expansion is stuck at mediocre levels and global risks are building.
Germany’s services PMI rose to 55 in November from 54.2, reaching a six-month high. While a gauge for manufacturing fell to 54.4 from 55, companies signaled a sharp increase in new export orders during the month, according to Markit.
A composite PMI for France released earlier on Wednesday showed the economic recovery there is gathering pace. Figures for the euro area are set to be published at 10 a.m. Frankfurt time.