THE German soccer team’s romp to victory in last month’s World Cup was hailed at home as a symbol of the country’s emergence as a confident global economic power.

    But in recent weeks, the economy that proud German politicians have taken to describing as a “growth locomotive” and “stability anchor” for Europe, has been hit by a barrage of bad news that has surprised even the most ardent Germany skeptics.

    The big shocker came last week, when the country’s Federal Statistics Office revealed that gross domestic product (GDP) had contracted by 0.2 percent in the second quarter.

    “The euphoria that we’ve seen, the perception that the German economy is booming is simply misplaced,” said Marcel Fratzscher, director of the DIW economic institute in Berlin.

    Economists and some government officials acknowledge, there are deeper reasons for the recent downturn. And they have little to do with the spike in geopolitical tensions in eastern Europe or the Middle East.

    They start at home, where Chancellor Angela Merkel’s abrupt exit from nuclear energy after the Fukushima disaster in Japan and aggressive push into renewables has unnerved German industry. A recent overhaul of the country’s complex renewable energy law has done little to alleviate uncertainty over future policy or assuage fears about German energy competitiveness.

    “Energy intensive industries in particular have lost confidence in the future of Germany as a business location,” said Thomas Mayer, a former chief economist at Deutsche Bank who now runs the Cologne-based Flossbach von Storch Research Institute. “I think this is a major issue that will burden German industry for years to come.”

    Further souring the mood among businesses has been a roll-back of economic reforms that Merkel’s predecessor Gerhard Schroeder introduced a decade ago, and which many credit with fuelling a sharp drop in German unemployment and a rebound in growth that began in 2006.(SD-Agencies)