German Q2 contraction sharpens

Frankfurt: Germany´s economy contracted in the second quarter, figures showed on Wednesday, highlighting its vulnerability to trade tensions and stoking a debate on higher government spending.At minus 0.1 percent, the performance matched forecasts from analysts surveyed by Factset, after output grew 0.4 percent in January-March.

Weak growth for Germany places it alongside Britain, down 0.2 percent in the quarter, in a group of trailing European nations. In the eurozone, Berlin has fallen from being the model pupil to lagging Italy´s standstill economy and France which posted 0.2 percent growth.

Recent days and weeks have brought a slew of negative indicators for Germany, with measures of exports and manufacturing especially hard hit.

Machine-tool makers -- the country´s second-largest industrial sector after cars -- reported 22 percent fewer orders between April and June, their federation said Tuesday.

Similar factors to those sapping other top industries such as cars and chemical firms are at work, including a global growth and trade slowdown accelerated by political tensions.