“Germany Is Losing Its Mojo” writes the “Wall Street Journal” in a current headline – “Germany is losing its superpower”. Just a few weeks earlier, the Wirtschaftsblatt newspaper asked on the front page: “Is Germany’s economic model really broken?”
Germany is the only major economic power in the world that is shrinking – while even Russia is growing again despite the sanctions imposed on Moscow, according to the Wall Street Journal (WSJ).
According to the article, German industrial production and gross domestic product have been stagnating since 2018 – so the consequences must be drawn: Germany’s long-standing successful model has lost its magic.
Europe’s most important economy urgently needs to modernize
And further: Europe’s most important economy urgently needs to modernize in order to be able to keep up in the new times. But politicians in Berlin are finding it difficult to find solutions – both for the immediate crises and for the long-term challenges.
China, once the best customer of German car manufacturers, has now become a serious competitor, according to the business newspaper. Especially when it comes to the electric car revolution, Germany is lagging behind.
An exaggerated self-assessment has led to overhearing the warning signals that the future belongs to electric vehicles. There has simply been a failure to invest in the development of batteries and other technologies for the new generation of cars.
A study by management consultancy PwC is also quoted, according to which German automotive suppliers have lost just as much world market share since 2019 as they had gained in the previous two decades due to their hesitant attitude.
“Germany will get back on its feet”
Another point of the article: With SAP, Germany only has one large software company – and that was founded in 1975. And then the astonished American reader is told: German authorities actually still use faxes.
An outdated infrastructure, a shrinking labor force, poor internet and mobile connections compared to other advanced countries lead to the devastating
Conclusion: The years of boom in past glorious times have made the country self-satisfied and self-satisfied – and apparently blind to its weaknesses: a sprawling bureaucracy and a rigid service sector.
According to Josef Joffe, Fellow of Stanford University, Germany is currently suffering from two long-term diseases in the WSJ: “First and foremost the failure to transform an old industrial system into a knowledge-based economy, and an irrational energy policy. The country is led by a few jokers, a motley coalition that can’t get anything together.” Nevertheless, he predicts: “Germany will get back on its feet.”
Germany has many strengths
After all, the country still has many strengths: firstly, outstanding technical and engineering know-how, secondly, the German capital goods industry and thirdly, a significantly lower national debt than other countries. And fourth, the Berlin financial bonds were among the safest in the world.
“In addition, one must not forget that the Germans are world leaders in climate technologies. Germany is way ahead of other countries in that regard,” stresses Kim Wang, an economist from Boston, to FOCUS online. point five.
But: Germany’s digital competitiveness gives cause for concern
At the same time, the professor of international economics criticizes: “Germany’s digital competitiveness was in 19th place in 2022, even two places behind the previous year. You really need to catch up here.
In addition, an entrepreneurial spirit should be one of the driving forces behind economic growth. The government could facilitate access to capital, promote connections between German cities and world-class start-up cultures and increase risk-taking.”
Her colleague, economics professor Russell Seidle, agrees: “One of the government’s priorities in Berlin should now be to strengthen entrepreneurship.” prove and pick itself up over the next five years – especially when the after-effects of the pandemic, such as supply bottlenecks, are resolved and energy prices fall again. Germany has clear strengths: a long tradition of outstanding technical knowledge and a functioning society.”