annublog.com

What German Vote Means For Europe’s Economy

As Africa gets online, Europe emerges as the new global internet traffic hub

And even if she’s forced into a grand coalition, any shift is likely to be very subtle. Related: Greece joining euro was a mistake: Merkel While the Social Democrats have taken a softer tone on austerity , they have backed Merkel on all the big European decisions during the crisis. “The power and willingness of the SPD to cause an overhaul in euro-politics from the German side is very limited,” noted BNP Paribas economist Evelyn Hermann. Merkel: Europe has lived beyond its means What about the German economy? Germany is the second most productive of the G-7 economies after the United States, based on GDP per hours worked. Its unemployment rate is the second lowest in Europe and it managed growth of 0.7% in the second quarter, having avoided the recession that gripped much of the euro zone for 18 months. German stocks are at record highs , and businesses haven’t been as upbeat about their prospects for more than three years. But some economists are warning of creeping complacency. One of the talking points in the election campaign has been the millions of working Germans barely able to cover more than their basic needs. The Social Democrats would look to raise income tax rates, introduce a national minimum wage and limit the use of temporary work contracts. “The impact on the short-term business cycle would be negligible,” noted Berenberg economists. “But over time, Germany could lose its current position as one of the best places to do business in Europe. That would be costly.” Will markets react to the results?

merkel campaign trail

The company released a study Wednesday that shows how more and more cables are connecting in Europe because of the availability of large exchanges such as the Amsterdam and Frankfurt Internet exchanges. From the story: Europe is an attractive Internet hub because it is home to many large carriers and major Internet exchanges, and IP transit prices are among the lowest in the world, said TeleGeography analyst Paul Brodsky. New cable builds in Africa and the Middle East have enabled international operators to access inexpensive IP transit directly in European cities instead of connecting much further to the U.S. Subscribe to gigaom.com Overall the growth of global bandwidth is slowing, but operators still are adding 26 Tbps of capacity this year, more than even existed in 2009. But as the growth slows, the center of the bandwidth universe is shifting. International internet capacity connected to Europe increased by 18.5 Tbps in 2013, growing most rapidly between Europe and Africa. Europe now accounts for 94 percent of international internet bandwidth connected to North Africa, up from 61 percent ten years ago, and 72 percent of bandwidth connected to Sub-Saharan Africa, up from 39 percent a decade ago. Growth in European connectivity is equally sharp for the Middle East, which has seen its bandwidth connected to Europe increase from 51 percent to 85 percent in the past ten years. So Europe is in the right place for internet growth in the rest of the world, but its prices for transit are also lower because so many providers connect at internet exchange points on the continent. That competition between IXPs tends to lead to lower pricing. Related research and analysis from GigaOM Pro: