May 22, 2024

Germany is the only export destination for Black Forest cake

May 3, 2024

Foreign observers have dismissed the German economy for now. They were amazed at the ease and lack of work of people whom they originally considered particularly industrious.

“The sick man of Europe” was a description given to the Federal Republic a quarter of a century ago in a fundamental analysis by the British business magazine The Economist. At that time, Gerhard Schröder took over as Chancellor and implemented the “Agenda 2010”, which won admiration abroad. This is history.

Today, it is not just the British media world that views the era of Merkel’s government and the current coalition as wasted years. Talk of the sick man has returned to European partner countries as well as in the United States and China.

There is pessimism everywhere when it comes to economic performance and the ability of the ruling coalition to act quickly and decisively. According to The Economist, politicians have not yet understood how important a measurable change in course is: “Only a few in the current government realize the scale of the task.” However, what appears to be the position of the Grand Masters – often attributed to the Germans – is well supported by numbers and data. The Organization for Economic Cooperation and Development, as well as the International Monetary Fund, had recently presented a harsh report to the Germans on economic growth this year. Last place among all G7 countries with a projected 0.2 percent increase in GDP. Great Britain comes in second to last with a statistical value twice that: 0.4 percent. In these decimal areas, you are already in the realm of statistical uncertainty – this can easily lead to zero or even deflation.

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The United States is far ahead: its economy is likely to grow by 2.6% in 2024, according to OECD researchers. The Paris-based organization expects little consolation next year, as Germany could pull ahead of Britain with growth of 1.1 percent compared to 1.0 in the UK. If this is achieved, the two losers will swap places at the bottom of the table. Reason enough for The Times of London to put her country in the spotlight.

However, the British newspaper also has a devastating stock of the Germans, especially regarding their performance and preparedness. What has now become a problem in Berlin leaves Britons shaking their heads and wondering where the work ethic that has been admired as a typical German trait for decades has gone. Given the 1,341 working hours in Germany in 2022 and a performance level well below the EU average (1,571 hours) and at the same time more vacation days and an increasing number of sick leave, people in the US also wonder how the recovery should be established. Bloomberg Business in New York sees a deadly debate on debt curbs in Germany: For American economists, the national debt represents a negligible problem compared to weak growth and low productivity. There is no doubt that one can and should take on higher levels of debt to stimulate the economy; Of course, the obstacles imposed by the German constitution are not the issue here. The British Financial Times adopts a similar point of view: Austerity, that is, self-restraint and economic management, has never worked and is no longer of any benefit today. This view of things is almost entirely consistent with the concept put forward by the British economist John Maynard Keynes, who saw the recipe for growth in government involvement in credit (although he also called for further cuts in government spending and debt reduction in good economic times). ).

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Trade unions on the German side share this view. In an interview with a magazine, the head of the DGB Party, Yasmine Fahmi, and former Secretary General of the Social Democratic Party, called for increasing taxes in the form of wealth and inheritance taxes in order to increase state funding for investments and support social concerns. At the same time, the debt brake problem should also be solved. However, the DGB also sees the migration of industries as now a serious problem and complains of rising energy costs. But Fahmy does not want to explicitly assign responsibility to anyone. This is more evident abroad.

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