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FOR the past few years Germany has been a shining exception to Europe's economic weakness. But suddenly the Teflon Teuton is in trouble. Germany's GDP fell in the second quarter and more recent news has been grimmer still. Industrial output and exports plunged in August. The ZEW index, a measure of investor confidence, has tumbled to its lowest level in almost two years. The economy may well be in recession
This weakness has many outside Germany deeply worried. But inside the country the reaction is one of stoic nonchalance. Even as the government this week slashed its official growth forecasts from 1.8% to 1.2% for 2014, and from 2% to 1.3% for 2015, it argued against any shift from the long-standing goal of balancing the budget next year. "A dip in growth is not a cataclysm," says Sigmar Gabriel, the economy minister; there are "no economic-policy grounds" for changing course.