Germany is only the export winner for Black Forest cake. Foreign observers have written off the German economy for the time being. They are amazed at the comfort and lack of work of the people, who they had originally considered to be particularly hardworking.
The “sick man of Europe” was a label given to the Federal Republic a quarter of a century ago in a fundamental analysis by the British business magazine “Economist”. At that time, Gerhard Schröder came into office as Chancellor and implemented his “Agenda 2010,” which was admired abroad. That’s history. Today, it’s not just the British media world that sees the era of Angela Merkel’s governments and today’s traffic light coalition as lost years.
The word about the sick man is back, in the European partner countries as well as in the USA – and China. There is pessimism everywhere when it comes to economic performance and the ability of the governing coalition to act quickly and decisively. According to the “Economist,” German politicians have not yet understood how important a measurable change in course would be: “Only a few in the current government are aware of the magnitude of the task.”
What sounds like a senior teacher attitude – which is actually often attributed to the Germans – is, however, well supported by numbers and data. The Organization for Economic Cooperation and Development (OECD), as well as the International Monetary Fund (IMF) shortly before, gave the Germans a damning report on economic growth this year.
Last place among all G7 countries with a forecast 0.2 percent increase in gross domestic product. Great Britain is second to last with a statistical value that is twice as high: 0.4 percent. In these decimal areas you are already in the field of statistical uncertainty – it could just as easily result in zero or even shrinkage. The United States is far ahead: its economy will probably grow by 2.6 percent in 2024, according to OECD researchers.
The Paris-based organization has little consolation for next year – Germany could just edge ahead of the British with growth of 1.1 percent compared to 1.0. If it comes true, two losers will swap places at the bottom of the table. Reason enough for the London “Times” to put their own country in the spotlight.
However, the British paper also has a devastating inventory ready for the Germans, especially with regard to their performance and willingness. What is now also an issue in Berlin leaves the British shaking their heads and wondering where the work ethic that has been admired as a typical German characteristic for decades has gone.
In view of the 1,341 hours worked in Germany in 2022 and the work effort that is well below the EU average (1,571 hours) and at the same time more vacation days and an increasing number of sick days, people in the USA are also wondering how recovery can be achieved should be created.
The New York business agency “Bloomberg” sees a fatal discussion about the debt brake in Germany: For American economists, national debt is a negligible problem compared to weak growth and declining productivity. There is no question there that one can and should take on higher levels of debt to stimulate the economy; the hurdles of the German constitution are of course not the issue here.
The British “Financial Times” takes a similar view: Austerity, i.e. restricting oneself and economic management, has never worked and is of no use today; This view of things corresponds almost exactly to the concept of the British economist John Maynard Keynes, who saw the recipe for growth in government involvement on credit (although he also called for government spending to be reduced again and debts to be reduced in good economic times).
The trade unions on the German side share this view. In an interview, DGB chairwoman Yasmin Fahimi, former SPD general secretary, calls for higher taxes in the form of wealth and inheritance taxes in order to increase state financing of investments and support social issues. At the same time, the debt brake should also be solved. However, the DGB also sees that the migration of industries is now a serious problem and complains about the high energy costs. Fahimi, however, does not want to explicitly assign responsibility to anyone.
This is clearer abroad. The Economist, for example, calls the move away from nuclear energy a “spectacular own goal”. In fact, the larger rest of Europe is following the push in the opposite direction. In view of a sluggish bureaucratic approval system, the development of affordable energy alternatives is not making progress in Germany, according to the British analysis. And it is evident that the fact that the German industrial sector needs twice as much energy as the next largest sector in Europe is ignored. That apparently means: until now.
On the one hand, large consumers, especially the chemical and metal industries, are orienting themselves towards generating electricity from their own sources. For example, the world’s largest chemical company BASF, which is involved in wind energy and at the same time converts gas-dependent systems to electricity. Since none of this will happen quickly enough in Germany, new plants are being built across sectors, especially abroad. First choice for many: China.
In China, the population’s image of Germany is apparently still characterized by positive attitudes that have been cultivated for years – punctuality, high moral standards and, of course, Chinese recognition for the engineering achievements and products of German industry, especially those of car manufacturers. However, such surveys now produce a picture that is not very realistic, especially since the autocratic head of state Xi Jinping has clearly set his empire’s course towards economic independence – which means becoming the world’s predominant economic power.
Germany was and is – still – in demand as a technology supplier. However, China exports the products there, and Germany’s trade balance with China is getting worse from year to year. The destruction of the Western model of democracy and economics should therefore be the intended goal on the way to China’s hegemony, says business journalist Dieter Schnaas. According to this picture, at least the Chinese leadership has little disdain for the weak nations of Europe. Consequently, the Beijing auto show just demonstrated an overwhelming preponderance of Chinese models that are preparing to stir up the competition worldwide.
The visit of Chancellor Olaf Scholz with an impressively large delegation of German business leaders in April did not result in any significant progress for Germany – Scholz was fobbed off, according to the New York Times. Apart from meaningless customs agreements for some foodstuffs, there wasn’t much left: “In the end it was a fruitless journey – apart from a few apples,” complains the paper. The intentions to cooperate more closely on smart cars are more likely to frighten the rest of Europe and the USA than to inspire recognition. Chinese communication technology in cars on German and European roads?
Foreign countries view this more skeptically than the German Chancellor, and the London “Times” quotes with regard to China: “Scholz is simply completely overwhelmed when it comes to foreign policy. He continues the Merkel approach wherever he can, has no ideas of his own and just tries to take the path of least resistance,” says political scientist Ulrich Speck. There is no sign of Germany “de-risking” vis-à-vis China, even if Olaf Scholz mentioned it. China, for its part, is more likely to decouple itself from the West in terms of dependence, and that could one day lead to the end of profitable business for German companies.
Almost like a warning sign, extensive espionage activities by China in Germany were discovered shortly after the Chancellor’s return. Apparently voluntary technology transfer is not enough for the Beijing regime.
After all, the New York Times mockingly notes that a German export has what it takes to bolster the country’s reputation: According to the paper, Black Forest cake is the undisputed most popular dessert in the world, from Trinidad to Zimbabwe. In Nepal and Pakistan it is even celebrated as a national dessert. In any case, this transfer of knowledge was successful: “The Black Forest cake, named after a corner of Germany that still conjures up images of fairy tales.”
The article ““Spectacular own goal”, “overwhelmed”: Foreign press shaves traffic lights and mocks meanly” comes from Business Punk.