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BUSINESS ENGLISH · BUSINESS ISSUES · UPPER-INTERMEDIATE (B2-C1)

FROM BUST
TO BOOM
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1 Warm-up

Which products/industries do you associate with Germany?

2 Vocabulary - Finance and investment

Complete the sentences with the words below:

asset bailout capital controls deficit emerging

inflation peg powerhouse recovery boom

1. A boom is a sudden period of economic growth. The opposite is a ‘bust’.

2. The government spent more money than it received. The was over $200 million.
3. Japan is traditionally the most successful economy in East Asia. It is the of the
region.

4. After asking for financial help from the government, the bank received a of $10
billion.
5. Investors are interested in markets such as China and India, which are undergoing
a process of economic growth and industrialisation.
6. Some countries their currencies to the dollar in order to stabilise them.
7. In order to prevent people from taking their funds out of the country, some governments introduce
- for example banning transfers from domestic to foreign bank accounts.
8. Any item of economic value, owned by an individual or company, is called an
.
9. After a long recession, the economy is finally showing signs of .
10. Prices are rising rapidly - the country has high .

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UPPER-INTERMEDIATE (B2-C1)

FROM BUST TO BOOM

3 Predict the answers

Decide if the statements are true or false. Read the article to check. Correct the statements that are
false.

1. Germany is the powerhouse of the European economy.

2. Unemployment in Germany is increasing.
3. China is a bigger exporter than Germany.
4. China pegs its currency to the euro.
5. Germany has introduced capital controls to fight inflation.

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Boom time for investors in Germany

Economic fundamentals and solid exports are driving Europe’s top performer.

1.
Many European fund managers are now turning their 7.
As well as healthy export figures, falling
attentions to the west and praising Germany as the unemployment levels seem to have caused German
one of the best investment opportunities around. consumers to spend more too.
2.
The troubles of the banks and the huge deficits 8.
All of these factors have led to such a strong recovery
of the so-called Pigs (Portugal, Ireland, Greece and in Germany that economists are debating whether
Spain) nations has focused the minds of investors on the level of growth will be higher than their forecasts.
the fundamentals of exports, economic strength and Mr Norris compares this potential level of growth to
workforce skills. And by these measures, Germany is that of an emerging market, but adds that Germany
truly the powerhouse of the European economy. has several important advantages over developing
3.
"This concept of how you can have a boom and a economies.
bust coexisting is quite a difficult one for investors 9.
Firstly, investors can enjoy cheaper stock prices
to understand, but Germany is booming," says Barry because the boom is still relatively undiscovered. In
Norris, the manager of the Ignis Argonaut European contrast to China, for example, investors are not
Alpha Fund, which has increased its exposure to yet expecting massive growth which is reflected in
Germany holding 35 per cent of its assets in the valuations of stocks. Secondly, whereas authorities in
country. emerging-market economies are raising interest rates
4.
With struggling economies and bailouts elsewhere and introducing capital controls to fight inflation,
in Europe, investors could be forgiven for steering as a euro member, Germany is continuing with low
clear. But Mr Norris argues that this shouldn’t distract interest rates despite its strong economy. As the
people from this investment opportunity. economy goes from strength to strength, German
asset prices will also rise.
5.
"Over the past five years, the unemployment rate in
Germany has come down every year, which is a good
10.
While an exciting prospect for investors, investing
sign of its competitiveness. Exports are back up to a heavily in Germany also carries considerable currency
record level and it is now neck and neck with China risk and any European assets could plummet if
as the world’s biggest exporter," he says. Greece, Ireland and Portugal cannot repay their
debts. This is where the old investment rules ring
6.
As currency traders dump the euro in light of the debt
true: where there is any uncertainty, diversification
crisis, German exporters are taking advantage. With a
is the best way to spread risk.
strong euro, German products become expensive and
difficult to shift, but with a weakened euro, German
11.
"It certainly pays to be selective when investing in
companies are able to sell more of their goods Europe at the moment. Having wide exposure to
abroad. Companies such as BMW, for example, are the entire European market means investing in some
benefiting from high demand in emerging markets, very troubled economies as well as those, such as
and because China pegs its currency to the US dollar, Germany, with better prospects," says Mr Bamford of
the weakened euro has boosted profits for German independent financial adviser Informed Choices.
manufacturers. Adapted from The Independent, by Chiara Cavaglieri
and Julian Knight, 5 December 2010

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4 Checking understanding

Answer the following questions in your own words:

1. By which economic factors is Germany the powerhouse of Europe?

2. What has caused the euro to weaken?
3. Why are German companies able to sell more goods abroad?
4. What has caused an increase in consumer spending in Germany?
5. Why might potential investors consider Germany to be more attractive than emerging economies?
6. Why is it also risky to invest in Germany? What investment strategy can reduce this risk?

5 Find the words

Find a word or phrase in the article which means...

1. very large (adj., P2)

2. existing at the same time (verb -ing, P3)
3. avoiding something (idiom, P4)
4. on the same level (idiom, P5)
5. sell something that you don’t want (verb, P6)
6. becomes more and more successful (idiom, P9)
7. fall rapidly (verb, P10)
8. seems to be true (idiom, P10)

6 Phrases in the text

Match the following words to form phrases from the text and create a sentence for each collocation:

1. a huge a. deficit

2. high b. demand

3. a strong c. exposure

4. massive d. growth

5. an exciting e. prospect

6. wide f. recovery

7 Talking point
How attractive is your country for potential investors. Describe the advantages and disadvantages
using vocabulary from the lesson.

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