Germany’s paralysis threatens European economy
Germany’s paralysis threatens European economy
Analysts and institutions expect flat growth in 2024 and fear that the country’s stagnation may spread to France and Italy
Germany is just hit by a combination of different factors. Some are bad luck, some are bad politics, but none of them are incredibly dangerous. The gas crisis is solved and gas prices are already at a fairly normal level again, so consumers will get more money from lower energy prices. Currently German has a lot of strikes. Obviously that slows down the economy right now, but higher pay means workers spend more money, which increases consumption, which is currently slowing down the German economy. Global manufacturing is down due to lower demand. This hits Germany badly, due to not only having a large manufacturing sector(manufacturing as a share of GDP is nearly twice as high for Germany then France for example), but also due to Germany being a large manufacturer of factory grade machines. Obviously manufacturing companies invest less, with low demand, so the sector is hit especially hard. A domestic bad policy is the debt brake, which leads to the German government investing too little in Germany.
However the German labor market is strong with low unemployment. Germany can easily borrow a lot of money, if it chooses too and the current "crisis" is about a tenth of the decline Germany had in the great recession of 2009. So chances are this is going to sort itself out and to a large part already has done so. It most certainly is not going to hurt other EU countries especially hard.
Germany can easily borrow a lot of money, if it chooses too
And it does not and will not. Not because it makes sense, but because of politics.
Yeah it's a wicked conundrum of past politic decisions now biting their asses. CDU and SPD made the debt brake law that forbids them to take loans to solve a crisis that is not unforeseeable and short term. Almost all crisises now have been foreseeable and are long term (demographic change, climate crisis, declining work force,...). SPD is part of the government now and the CDU is weaponizing the debt brake. All socially responsible solutions are vetoed by the neoliberal FDP and the opposition uses that to discredit the entire government, mainly shifting the blame to the Greens because they are their main political opponent. This results in a surge of far-right votes, pushing sane solutions even further away.
wir tun was wir können 💪
I have a lot of questions. Why is this important? Do we need to be divided in Europe because of this? Actually, as a (not German) European citizen, why should I even care? Is the economy that important for me as a citizen? How does it effect my household budget? What is even the metric for the European economy?
First off, it's a load of bullshit that Germany's economy is tanking. Second, yeah it is kinda important, but it's just a fucking stretch of slightly lower productivity after a massive increase due to catching up what was missed out on during Covid.
Fuck these alarmists. They just want the workers to maintain this bullshit productivity, which has sent many people into a burnout.
You're privileged (no offense!). For some people, a bad economy means losing their jobs, turning homeless, etc. critical hits from which it's difficult to recover.
No offense taken, I am well aware.
Every thing depends on the economy. The food on your plate, the roof over your head, the train you take, every thing.
I know, but how does it depend? I have lived trough times where the economy was called bad, and the only thing I saw was that shareholder value went down. It didn't really effect me. The roof over my head was still mine, the food got a little more expensive for some time but not that much, and gasoline got cheaper.