While the global fi nancial crisis had a strong impact on economic activity in Germany, the
impact of the euro area crisis on economic activity in Germany has so far been relatively mild.
Trade fl ows by region reveal that German fi rms have recently redirected their exports towards
the remaining growth spots of the world economy, in particular to Asia’s emerging economies.
However, a continued crisis in the euro area is likely to put a considerable dent in German
exports. While market forces have already triggered the rebalancing of intra-European trade
fl ows, German exporters may play a helpful role in this process if fi rms in distressed countries circumvent high entry costs by integrating themselves into the global value chains of German