* German firms find markets outside of euro zone
* Unemployment at 20 year lows
* Support for Merkel's tough line on bailouts
By Gareth Jones
HANOVER, Germany, June 28 For his fellow
Germans, explains businessman Roland Frobel, the euro crisis is
a hurricane that may have been spotted on the horizon but has
yet to blow in.
"The storm is coming, everybody knows that, but the
lightning has not struck yet," said the chief financial officer
of Rossmann, one of Germany's largest health and beauty retail
chains, at its headquarters near the northern city of Hanover.
From where he is standing, it is hard to imagine sunnier
economic weather. His firm has recently created nearly 3,000 new
jobs in Germany and abroad - where it has been expanding in
non-euro zone countries such as Poland and Turkey - and expects
its sales this year to rise by nearly 12 percent from 2011.
"The feeling of looming crisis that people have is still
vague, undefined," said Frobel. "And you see this in their
continued willingness to go out and buy. Their readiness to
consume is holding up well."
Hanover, a bustling industrial and trading hub on the
fertile plain of northern Germany, is a world away from the
recession engulfing Greece, Spain and other parts of Europe.
Life, for Germans, is as it should be. Unemployment is at
20-year lows. Exports are at record levels. The national soccer
squad has predictably been storming from one victory to the next
in the Euro 2012 championship.
German consumer morale actually rose going into July, a key
survey by GfK market research group showed this week, on hopes
of higher wages, though it also revealed greater pessimism about
the economic outlook due to the euro crisis.
People are well aware that everything could suddenly change
for the worse if the crisis affecting their neighbours finally
"In Germany there is no crisis. But that could change very
fast. The euro is unloved and we miss the deutschmark,"
pensioner Paul Majer, 76, said as he strolled with his wife
around the cobbled streets of Hanover's old town.
Like many Germans, he blames those in southern countries for
putting Germany's hard-won prosperity at risk by failing to
enact the sort of austerity measures Germany endured when the
euro arrived and wages were held down to keep it competitive.
"I don't believe things will stay OK for much longer. The
euro zone is too diverse. They say we Germans live to work while
the Mediterranean cultures work to live," Majer said.
Chancellor Angela Merkel will be under unprecedented
pressure at a European Union summit this week to pledge more of
German taxpayers' cash to rescue the euro. Her countrymen,
including the burghers of Hanover, are having none of it.
"Greece should not get any more money, it is a bottomless
pit. The strong countries cannot prop up the weak ones forever.
Germany is just not strong enough to do that," said taxi driver
Kurt Ringling, 65.
A city of 500,000 people, Hanover is a good place to take
the pulse of 'middle Germany' because of its central location
and a diverse economy that includes major manufacturers such as
Continental and Volkswagen, insurance firms and tour operator
TUI. It is also home to the world's biggest trade fair.
"Unemployment here fell again last month. The unions have
secured wage increases. Many firms are doing relatively well,
both the big industrial firms that rely on exports but also the
'Mittelstand'," said mayor Stephan Weil, referring to Germany's
often family-owned small and medium-sized businesses.
"But many people look with anxiety at Europe, especially
those countries in big financial difficulty like Greece and
Spain. Many people in Hanover know the countries from having
spent holidays there or have friends and acquaintances here who
have come here from those countries," he said.
PATIENCE WEARING THIN
The storm clouds of the crisis are slowly arriving. Local
newspapers have reported the introduction of short-time working
at factories belonging to leading automotive suppliers
Continental and Johnson Controls in the Hanover area because of
crumbling demand in key European markets.
Psychologist Manon Rossmanik, 35, said she did not feel the
euro crisis in her own life but said there were growing signs of
people preparing for the worst.
"Real estate prices are going up. People want to protect
their savings by buying property, tangible things," she said,
clutching a wad of estate agency brochures.
That sense of alarm prods Germans to stand by Merkel and her
firm insistence that other euro zone countries accept their
austerity "medicine" before receiving aid.
"Germans' patience is wearing thin - in fact, there's none
left. We sometimes have the impression Europe can only exist by
being on the German payroll," said Wolfgang Nowak, head of the
Alfred Herrhausen Society, a think-tank run by Deutsche Bank.
"The German national mood is very anti-bailout... We want
Merkel to be a good Swabian housewife," he said, invoking a
popular German image of penny-pinching prudence.
At the site of the annual Hanover trade fair, which has its
roots in the postwar reconstruction that gave rise to Germany's
'Wirtschaftswunder' (economic miracle), the mood remains upbeat.
Some 5,000 firms, about half of them German, exhibited at
this year's fair in April. Many of them Chinese, a sign of
Germany's success in exporting beyond the euro zone to
high-growth Asian markets. Premier Wen Jiabao visited with
The euro zone stayed largely in the background, said Wolfram
von Fritsch, chairman of the board of Deutsche Messe which runs
the trade fairs.
German exporters had proven their resilience by bouncing
back strongly from the 2008-09 global financial crisis, he said.
He, too, reached for a weather metaphor to describe how German
businesses were locating markets in temperate climes.
"The euro crisis is seen as a kind of natural disaster. Like
rain or snow, it is something we can't change, so let's just
focus on our main business."