Germany out of the recession before Britain.

Germany are the world's biggest exporter. Surely then, in a recession, where aggregate demand falls drastically, Germany would be hardest hit?

This is true. In the first three months of the year, Germany's economy contracted 6.7% whereas Britain only contracted by 4.9% because Germany's growth is largely fuelled by exports.

However, they came out of the recession first because they were able to stimulate domestic demand better than Britain. Britain's consumers are in bigger debt than the average German. Thus, we could not just spend our way out of the recession, like Germany did. Germany saw increased domestic demand, which created better profits for companies. Then, companies were able to expand and employ more people. Unemployment decreased, the economy picked up - and yes, Germany had come out of the storm - just. A lesson to learn: individuals and the government alike need to build up a cushion of savings in times of boom, so we can spend in a recession.

Secondly, and perhaps, more importantly is the fact that Britain are heavily reliant on the financial sector whereas Germany is not. This was a financial crisis - hence, when approximately 7% of Britain's GDP is created by the financial sector, we were always going to be worse off.