Germany went from envy of the world to the worst-performing major developed economy. What happened?
Germany went from envy of the world to the worst-performing major developed economy. What happened?
Germany racked up one economic success after another for most of this century. But the loss of Russian natural gas due to the war in Ukraine has dealt a severe blow to its industry through higher energy costs.
For most of this century, Germany racked up one economic success after another, dominating global markets for high-end products like luxury cars and industrial machinery, selling so much to the rest of the world that half the economy ran on exports.
Jobs were plentiful, the government’s financial coffers grew as other European countries drowned in debt, and books were written about what other countries could learn from Germany.
No longer. Now, Germany is the world’s worst-performing major developed economy, with both the International Monetary Fund and European Union expecting it to shrink this year.
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Germany grew complacent during a “golden decade” of economic growth in 2010-2020 based on reforms under Chancellor Gerhard Schroeder in 2003-2005 that lowered labor costs and increased competitiveness, says Holger Schmieding, chief economist at Berenberg bank.
Gee, who was in power from 2005 until 2020?
Someone who thought that a country with a very low level of debt should not invest money in a time where you actually got money back for taking a credit
Their "debts are evil" stance for 15 years are extremely stupid - even more than the crippling of the roadblocks they put up for renewable
And now people are putting the blame on the current government that had to sweep out all the dust...
I’m not a huge fan of Merkel either, but it’s nuts to think that success in 2018 was because of Schröders policies and not hers (if you want to say that they’re due to the chancellor at all, which I’m not sure I do).
not only - but Germany having one of the biggest low-income-workforces in Europe because of Schröder was still helping her a lot.
I mean yeah, the previous administration will always have an effect, and she got a good opening hand. It just feels incredibly political to say that it’s from Schröder, without any other attribution, and the paper doesn’t touch on that at all.
Especially in the context of Germany being the envy of the world- a lot of that was due to her leadership during the Great Recession.
Its actually the result from the Agenda 2020. Economic policies take sometimes years to get results. Merkel didn't hurt the economy in the short term though, but you you get the results now: crumbled infrastructure and dependence on Russia and China.