Actually, the figures of the Ifo index only reflect what economists have been formulating for weeks: Germany is slipping into a recession. The mood value of the group leaders, which is determined monthly, has fallen more rapidly than it has been for a long time; with a value of 88.6 points, it is lower than it has been since the first Corona summer of 2020.
So the question is not whether the recession will come, but how severe it will be.
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But another question arises: what will be the political consequences of the recession? 70 percent of Germans are still in favor of supporting Ukraine despite high energy prices. Among the supporters of the Greens, who don’t think much of gas as an energy source anyway, this value is highest at 95 percent. But will the agreement hold if it doesn’t just stay with high energy prices?
Should there be energy rationing for industry, there is a risk of rising unemployment. If Putin continues to turn off the gas tap, inflation at the supermarket checkout is unlikely to decrease due to higher production costs. The consequences of war will reach the consumer even more than before. The abstract warning “We will all get poorer” that Economics Minister Robert Habeck (Greens) issued at the beginning of the war will become painfully concrete in the coming months.
It doesn’t take much imagination to assume that Russian President Putin knows these connections. It is probably part of his calculations that Germany is not willing to accept restrictions that lead to major losses in prosperity. Last week, Foreign Minister Annalena Baerbock (Greens) even warned of popular uprisings “if we ran out of gas.” Putin will have been pleased.
While it’s 30 degrees outside and consumers are looking forward to finally being able to go to concerts and restaurants carefree after two summers of corona, the political dodges surrounding the gas turbine from Canada seem like far-off farce. Putin has not yet demanded any concessions for gas deliveries, for which the German government would have to jump far over its shadow. But in winter it could very quickly mean: you withdraw the sanctions or there will be no gas flow at all. When four-digit gas bills arrive in the mailbox, jobs are lost and the federal government no longer has the means to catch everything, German morale could be put to a severe test.
Germany has often become accustomed to cruel war crimes in faraway countries. Long gone are the hard losses on my own body. The winter will show what suffering Germany can endure longer.