The head of the Federation of German Industry, Siegfried Ruswurm, warned that the country faces a mountain of challenges, and that more companies are afraid to transfer part of their investments outside Germany, as the consequences will be worse.
Ruswurm’s speech was made at the annual trade union conference, which brings together the political and economic elite of Germany. On the other hand, German Chancellor Olaf Scholz spoke of the industrial transformation his country is under way when he visited one or another of the semiconductor plants for electric vehicles, but company executives and experts warn that difficult times lie ahead for Europe’s largest economy.
In addition, after a recession this winter, the German economy is expected to end this year in the red, so that the country will join the eurozone countries.
While only the government expects GDP growth in 2023, major economic institutions and the International Monetary Fund estimate a decline of between 0.2 and 0.4 percent.
It is noteworthy that images showing Germany as the “sick man of Europe” have reappeared in the media, referring to the period of the first decade of the 21st century, when the country was characterized as such due to its uncompetitiveness and high unemployment. rates.
But Schultz prefers to point to a different period in recent history, when in a March interview he expressed confidence that the shift needed to achieve climate neutrality by 2045 would allow Germany to “restore growth for a period of time as it was before.” in the 1950s and 1960s.”
On the other hand, more than one expert is suspicious of a new golden age scenario driven by the transition of energy and green industries, as this transformation will drain billions of euros “to replace existing capital at much higher costs.” .” According to what Ruswurm said this week.
In turn, Timo Wollmershauser, director of the Ifo economic institute, warned that “if the population declines for a long time, then the GDP will eventually not be able to grow.”
“Russia has always been the main supplier of gas to a country that used to import it at low prices,” he said.
Source: AFP.