The best years are behind us

components for wind turbines

There are warnings of de-industrialization in Germany if an economic turning point does not occur soon.

(Photo: dpa)

Berlin Not so long ago, Germany was considered a prodigy of the global economy. Even today, the world looks at us in amazement – albeit with a pitying attitude.

It used to be said that we were an economic role model. Today one marvels at the negligence with which Europe’s largest economy has made itself completely dependent on Russian gas, trade with China and US defense capabilities.

There are even warnings of de-industrialization in Germany if an economic turnaround does not occur soon.

The seriousness of the situation is also shown by the fact that the chancellor felt compelled last week to promote Germany as a business location to the international business elite in Davos. This is actually the job of Federal Economics Minister Robert Habeck and Federal Finance Minister Christian Lindner.

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Scholz, Habeck and Lindner could have divided the work before the powerful of the economy. The chancellor sets the big geopolitical line and prays for the world economy to be healthy. Habeck, as Minister of Economics, was Germany’s first traveling salesman, then praised the investment opportunities in the country, and the Federal Minister of Finance attracted investors with a competitive tax policy. It didn’t happen that way. The chance is gone.

glimmer of hope


percent growth

was reported by the Federal Statistical Office for the German economy in 2022.

So the world can keep rubbing its eyes. With good reason: If the chancellor does not follow his words with deeds, the best years of the German business model with its export-driven growth will soon be behind us.

>> Read here: China’s Ambassador in Berlin Wu Ken – “Cold War mentality”

The Federal Statistical Office recently reported an increase in the overall economic output of the German economy of 1.9 percent for 2022. That was more than expected. The mega recession is unlikely to happen. But the prospects are sobering. Germany is currently being passed behind in terms of international competitiveness. There are three reasons for this.

Other industrialized countries are cutting taxes – Germany, on the other hand, remains at a high level

German tax policy is hostile to growth: the last major tax reform was in 2000 under former Chancellor Gerhard Schröder. That was almost a quarter of a century ago. Since then, only a few adjustment screws have been tinkered with. While many other countries such as the USA or France have lowered taxes, they have remained at a high level in Germany. Nothing more is heard of the promised so-called super write-offs.

In addition, the transport infrastructure is almost dilapidated, the economy is suffering from a sustained aging trend, and public administration is nowhere near keeping up with the progress of digitization.

Nuclear power and fracking: Germany is not exhausting the possibilities of generating energy

The second reason is the high energy costs, which set companies far back in international competition. The government has done everything to fill the gas storage tanks and get the citizens through this winter. However, a strategy to reduce costs is far and wide not in sight.

fracking in the United States

Germany must use all domestic opportunities for energy production in order to remain competitive.

(Photo: Reuters)

In the US, gas currently costs just one-fifth of what companies have to pay in this country. So if politicians don’t bring themselves to exhaust all domestic possibilities for energy production, from nuclear power to fracking, then nothing will happen.

Golden years of the international division of labor are not returning

Third: A revival of world trade is not in sight. Even if Scholz and Lindner spoke out in Davos for more free trade and against deglobalization: the golden years of the international division of labor are not returning.

The Chancellor should therefore take a very close look at the China strategy he will be presenting in the coming weeks together with Foreign Minister Annalena Baerbock from the Greens. China is already weakening. Just like Germany.

More: Free trade for free countries – Lindner launches push for global trade alliance.

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