As of: February 12, 2024, 8:44 a.m
By: Christoph Gschoßmann
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Germany has lost its economic prestige.
Industry experts judge the development and the inadequate political solutions harshly.
Munich – Germany as a great business location, Germany as a world export champion, Germany as an economic power: What was once taken for granted has changed significantly in recent years and decades.
In an analysis, the US magazine
Bloomberg
describes it with the words: “Germany’s days as an industrial superpower are numbered.”
The medium cites the energy crisis as a death knell for the economy and the inability of the “paralyzed” political Berlin to find adequate solutions as the main points for the economic decline of the Federal Republic.
Stefan Klebert, CEO of the plant manufacturer GEA Group, is similarly pessimistic.
“There is little hope, I say that honestly,” he told
Bloomberg
.
There are “many, many things that are massively weakening this location and that are going wrong.
I’m really unsure if we can stop this trend.”
Gross domestic product is falling – DIHK foreign trade chief pessimistic
This can also be expressed in numbers.
The gross domestic product (GDP), i.e. the value generated by all goods and services in a country, fell by 0.3 percent in 2023 compared to the previous year.
What particularly stands out is the manufacturing industry: According to the Federal Statistical Office, a decline of two percent was recorded here.
Volker Treier, head of foreign trade at the Association of German Chambers of Industry and Commerce (DIHK), sees it similarly to Klebert.
The speed of structural change is “dizzying”.
According to Treier, you don't have to be a pessimist "to say that what we have been doing so far will not be enough to maintain Germany's economic structure and our prosperity over the next ten years."
The energy crisis is hitting the German economy hard – China is no longer a buyer, but competition
As a result of the loss of cheap Russian gas, the chemical industry is one of the hardest hit, the analysis says.
According to a survey by the industry association VCI, almost every tenth company is planning to stop production.
Large companies such as BASF and Lanxess have recently made massive job cuts.
In addition to higher energy prices, the distance between the USA and Europe and the loss of China as a voracious buyer of German industrial products are also mentioned.
In addition to the “paralyzed” government, Germany’s education location is also criticized.
According to an estimate by the Ifo Institute, declining mathematical skills among school leavers will cost Germany around 14 trillion euros in economic output by the end of the century.
In focus: Finance Minister Christian Lindner (FDP, left), Economics Minister Robert Habeck (Greens, center) and Chancellor Olaf Scholz (SPD) sometimes do not always agree.
© Kay Nietfeld/dpa
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Economics Minister Christian Lindner (FDP) also recently sounded the alarm.
He is urging the partners in the traffic light coalition to present the first proposals for a new growth agenda this month.
“The location is no longer competitive,” Lindner told
Handelsblatt
.
The debate on reducing corporate taxes initiated by Economics Minister Robert Habeck (Greens) is therefore “overdue”.
Lindner proposed a “dynamization package” and advocated the complete abolition of the solidarity surcharge.
According to Lindner, Germany is “getting poorer and poorer because we have no growth, we are falling behind.”
German economy in crisis: Habeck and Lindner agree, Spahn scoffs
While Habeck wants to finance tax cuts through new debt, Lindner rejects this.
“We pay high interest rates on national debt.
We would quickly strangulate our budget,” said the Finance Minister.
“If we were to adopt a fiscal policy like the USA, the interest rate in the federal budget could double in the not distant future.”
Most recently, Habeck also emphasized
the urgency of action for more growth in Germany in an interview with
Welt am Sonntag .
The Vice-Chancellor had proposed a billion-dollar, debt-financed special fund to relieve the burden on companies, which the FDP rejected.
Union politician Jens Spahn also sees a clear message from the government behind the unity between the Greens and the FDP.
“Now we have it virtually official from the finance and economics ministers: the traffic light policy leads to recession and red lights,” said the CDU MP to
Bild
.
“Habeck and Lindner call for fire, but at the same time pour more and more oil into it with their constant arguments.
Because no entrepreneur invests in Germany as long as he doesn't know what will happen tomorrow with this traffic light," added Spahn.
Germany needs a “cohesive economic policy that promotes growth instead of continually strangling it,” said the Union Vice President.
Economics Grimm: Traffic lights are taking the wrong path
According to the economist and “economic wise man” Veronika Grimm, the traffic light is taking the wrong path in economic policy by constantly trying to reflect all party interests.
The compromises “ultimately led to the market not functioning properly, but the interventions also not being powerful enough,” said Grimm on the ZDF program “Markus Lanz” on Wednesday (February 7).
Another problem is the high taxes in the country.
Hardly any other country demands as much from its employees as Germany does.
German employees notice this with every paycheck, and on the international playing field it scares off investors and potential new employers.
The traffic light coalition has recognized the problem, but there is still no solution.
(cgsc with dpa and afp)