At the beginning of the millennium, Germany was the sick man of Europe: high unemployment, a backlog of reforms, a recession. It won't be quite that far in spring 2023 – but Germany can now justifiably be described as the lame man of Europe. A technical recession, i.e. two quarters of a shrinking economy, is something the economy has narrowly missed. However, the stagnation in economic output now reported in the first three months of the year is a further disappointment after the significant contraction in economic output at the end of last year.
Johannes Pennekamp
Editor in charge of business reporting.
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The fact remains that in all international growth forecasts, whether from the International Monetary Fund or the European Commission, Germany ranks last.
This will not change quickly. Inflation has taken hold and is spoiling the buying mood of private individuals. Although Germany did not run out of gas in winter, energy will remain expensive. And in the coming winter it threatens to get tight again.
Consumer prices have also long been kept high by food and wages. Higher interest rates from the European Central Bank are the inevitable consequence – and poison for a real upswing. Demand from abroad also does not promise much dynamism. In America, the central bank also has to put the brakes on growth, and the situation in China remains confusing.
These may all be temporary problems. In the medium term, however, things do not look any better. The state bank KfW recently warned of an "era of persistently stagnating, possibly creeping shrinking prosperity" because Germany is running out of skilled workers and workers. And the green transformation has so far only led to a new German economic miracle in the wishful thinking of the Federal Chancellor.
Of course, the change offers opportunities for innovative German companies, but it can also go steeply downhill for car and heating manufacturers. The conclusion: At the moment, there is simply a lack of imagination as to how the lame man can quickly be made legs again.