The German economy is in a slump - and there is no end in sight. Entrepreneurs are frustrated - and are warning more and more urgently about de-industrialization.
Berlin - Cries for help can be heard from almost every corner these days: The German economy is in a crisis, the many delayed problems - energy transition, reduction in bureaucracy, shortage of skilled workers - are increasingly suffocating it. The current federal government is not solely to blame for this; However, business representatives are increasingly frustrated that the traffic light coalition is unable to take decisive action.
“Symptoms of deindustrialization”: Business calls for quick action
The employers' association Gesamtmetall and the trade union IG Metall have therefore (again) called on the federal government to strengthen Germany as a business location. The fact that many domestic and foreign companies are currently choosing against Germany when making location and investment decisions are “threatening symptoms of deindustrialization,” it said in a joint statement. “Above all, the federal government must ensure competitive energy costs and create more attractive investment conditions.”
Entrepreneur Daniel Hager, chairman of the supervisory board of the Hager Group, also sees this danger. In an interview with the
Handelsblatt
he warns: “De-industrialization is already taking place in the chemical, steel and automotive industries. The long-term effects are fatal. Prosperity will be lost. If the country continues to de-industrialize, it will become increasingly dark.” It will become increasingly difficult for entrepreneurs to continue to exist and invest in Germany, which is why more and more companies are turning away from the country.
“Germany as an industrial location is in danger”: Germans have to work more
In their statement, the employers' association Gesamtmetall and the union also call for accelerated infrastructure expansion in rural areas, faster planning and approval procedures and a long-term raw materials strategy. In view of the shortage of skilled workers, more focus must be placed on education.
“Germany as an industrial location is in danger. In other countries, more investments are also being made due to more competitive conditions. Energetic countermeasures are required - otherwise there is a risk of devastating deindustrialization, further social division and an increasing radicalization of political debates and protests," the statement said.
The entrepreneur Daniel Hager also agrees with this. “We have to work more. There is a lack of a performance culture in this country. [...] Germany is simply functioning very poorly at the moment.” In his view, social division is also increasing because politicians are not able to form a united front. “When three parties in the government are fighting, the population doesn’t know where they stand.” We saw this with the subsidies for electric cars, which were suddenly stopped, the heating law, the debate about citizens’ money and also in the migration debate. “Among citizens, the issue of migration and the fear of social decline is significantly greater than their concern about sustainability. Politics cannot be indifferent to this. “It cannot carry out the green transformation with a crowbar,” Hager told the newspaper.
Energy is the economy's biggest concern: "The last chancellor who had a plan was Gerhard Schröder"
According to all experts, the biggest problem that the German economy currently has is the question of cheap energy. Since the outbreak of the war in Ukraine and the stoppage of Russian oil and gas deliveries, energy costs have risen to unprecedented levels. And even if the situation has now improved: energy remains expensive in Germany, especially so-called green energy. Fixing this problem and thus re-establishing companies' loyalty in the long term is the main task of politics these days.
From Daniel Hager's point of view, however, this is exactly what it doesn't do. “The last chancellor who had a plan was Gerhard Schröder. He knew he had to nurture and nurture the industry. He knew that cheap energy was needed for industry.” The entrepreneur is of course referring to cheap Russian gas: Schröder was the one who commissioned the construction of the Nord Stream 1 pipeline under the Baltic Sea, together with Russian President Vladimir Putin.
Russian gas would have been important to bridge the gap
In the entrepreneur's opinion, this cheap Russian gas could have continued to be available to cushion this phase of transformation. “In any case, the current government has decided to introduce a package of sanctions that will do more damage to the German economy than to the Russian economy,” says Hager. In his opinion, the federal government also missed an opportunity to help the German economy by switching off nuclear power. “The most important task for economic policy is to provide available, cheap and green electricity. [...] But what you have to blame Germany for is that we have no plan and no goal.”
The German Chamber of Industry and Commerce (DIHK) also agrees with this assessment. “German companies need internationally competitive energy prices and are dependent on a secure supply,” said DIHK President Peter Adrian to the newspapers of the
Funke media group
. German electricity prices on the stock exchange are still twice as high as in 2019. However, prices have fallen over the past year. Together with taxes, network fees and levies, the costs are sometimes four times higher than in other countries, said Adrian.
According to the Federal Association of the Energy and Water Industry, the average electricity price for industry for new contracts at the beginning of 2024 was 17.65 cents per kilowatt hour; in 2019 it was 18.43 cents. At that time, around a third of this was still due to the EEG surcharge, which is no longer due. In the energy crisis following the Russian attack on Ukraine in 2020, the price shot up to 43.20 cents.
Entrepreneur thinks little of the traffic light coalition: “I’m waiting for a new government”
However, Daniel Hager has little hope of being able to persuade the traffic light coalition to give in. “There's nothing more coming. “I’m now waiting for a new government, even if I don’t know whether we’ll get something better,” he tells the
Handelsblatt
. He is not really optimistic about the largest opposition party either: “My criticism of politics is not aimed at the traffic lights. Even in the CDU, only a few, like Friedrich Merz, have already worked in business.”