a long time, Germany's business model worked something like this: We sell cars and machines to other countries and in return receive products that were manufactured on these machines. Germany is more dependent on globalisation than almost any other country. But globalization has been faltering for years. This didn't just start with the Ukraine war or the China quarrels. International trade has been under pressure since the financial crisis. Now there is even more pressure on companies to withdraw from China.
Editor-in-chief for economics and "value" at the Frankfurter Allgemeine Sonntagszeitung.
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2. Energy costs too much
Germany has never been a cheap energy country, but now energy has become even more expensive. This is by no means only due to the loss of Russian gas. It also has to do with poor planning of the energy transition. "Scarcity of supply and increase in demand: this is a calculation that does not add up," says Jörg Dittrich, President of the Skilled Crafts Association. More and more energy sources are being cut off before alternatives are available – first nuclear power, then gas for heating, and so on. The replacement is renewable electricity, which can hardly be stored yet. Now Germany sells electricity abroad when it is cheap and buys it back at a high price at other times. This can pull the rug out from under the feet of some industries. Nevertheless, CO2 emissions are not yet falling enough. Martin Kaiser, head of Greenpeace Germany, complains: "The traffic light has not succeeded in initiating the necessary climate protection measures in a form that ensures that Germany's climate targets are achieved and at the same time creates planning security for the economy and consumers."
3. Investment collapses
The first two problems alone are enough to depress investment. Last year, 130 billion euros flowed abroad from Germany, but only 10 billion came into the country. Never before has the investment deficit been so high. "More and more jobs are threatened by a lack of investment and even site closures," says Yasmin Fahimi, head of the German Trade Union Confederation (DGB). In addition, there is weakness in the capital market. "Alarm bells go off for me when German companies such as Biontech, Birkenstock and Lilium go public in the USA – we lose added value," says Verena Pausder, the new head of the startup association.
4. Electric cars are too expensive
The automotive industry is still Germany's most important export sector. In the meantime, it offers more and more electric cars, but they are not cheap. Even Volkswagen's mini-car "E-Up" recently cost 27,000 euros. Production will cease at the end of the year.
5. We hardly create new industries
It happens that an industry gets into trouble or is swept away by progress. This makes it all the more important for Germany to create new industries with new companies. However, new sectors of the economy with many young companies are practically non-existent. The youngest four DAX companies are nothing but spin-offs of old companies. Nevertheless, the average Dax company is now 90 years old.