Germany’s economy is in the dumps. Here are 5 reasons why

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Frankfurt, Germany (AP) – Germany has not seen a major economic growth five years ago. It is an amazing transformation of the largest economy in Europe, which in most of this century had expanded exports and global trade that dominated engineering products such as industrial machines and luxury cars.

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So what happened?

Here are five reasons for the continuous economic stagnation in Germany:

Energy shock from Russia

Moscow's decision to cut off natural gas supplies to Germany following Russia's invasion of Ukraine, a heavy blow. For years, the business model in Germany relied on the production of cheap energy for export industrial goods.

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In 2011, Angela Merkel, President of Angela Merkel at the time, decided to accelerate the end of the use of nuclear energy in Germany while relying on gas from Russia to fill the gap when the country moved away from charcoal generation and renewable energy. Then Russia considered a reliable energy partner; Warnings were rejected unlike Poland and the United States.

When Russia stopped flowing, prices in Germany rose to gas and for the gas caused by the gas, and both the main costs of intense energy industries such as steel, fertilizers, chemicals and glass. Germany was forced to resort to liquefied natural gas, or liquefied natural gas, very cooled and import by the ship from Qatar and cost American LNG more than pipelines.

Electricity now costs industrial users in Germany at a rate of 20.3 cents euros per kilowatt hour, according to a study launched by the research company prepared for the Bavarian Industry Association. In the United States and China, where there are many competitors of German companies, the cost is equivalent to 8.4 cents.

Renewable energy sources have not rapidly increased enough to fill the gap. The owner of the house and the regional resistance of the turbines are slowed by wind power growth. The infrastructure for the transportation of hydrogen as an alternative fuel for solid furnaces is often still on the drawing plate.

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China: From the customer to the competitor

For years, Germany has benefited from China's entry into the global economy – even when developed countries lost their functions against China. German companies have found a huge new market for industrial machinery, chemicals and vehicles. During the first and mid -2010, Mercedes -Benz, Volkswagen and BMW Geniest BMW are the profits of the world's largest car market.

At that time, Chinese companies produced elements such as furniture and consumer electronics that do not compete with the basic strengths in Germany. Then, the manufacturers in China began making the same things that the Germans did.

The Chinese Chinese solar panels concluded in the eradicated state of Germany. In 2010, Chinese panel makers depend on imported German equipment; Today, the production of the global solar panel depends on the equipment from China. The government in Beijing has increased efforts to enhance and support manufacturing for export. The resulting goods _ steel, machines, solar panels, electric cars and EV batteries _ are now competing with German goods for export markets.

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Germany, the European Union's most economical centered around cars, was the most losing it is from the industrial policy directed towards China. In 2020, China was not a clear source of vehicles; By 2024, 5 million a year was exported. Net exports in Germany decreased by half during the same period, to 1.2 million cars. The Chinese factory capacity is estimated at 50 million cars annually, or nearly half of the global demand.

Reducing investment

Germany has become satisfied during good times and postponing investment in long -term projects such as railways and high -speed internet. The government balanced its budget and sometimes ran out of tax revenues from the prosperous economy.

These days, German travelers shake their heads on trains that do not work on time and ongoing service disturbances during the repairs of the worn paths. High speed internet has not yet reached some rural areas. The transportation line to bring electricity from the north wind in Germany to factories in the south has left years and will not be ready before 2028. It was necessary to close a major bridge on the highway that connects the industrial Rower area with southern Germany in 2021, 10, 10 years after Doubts about her durability appeared. The alternative will not be ready before 2027.

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The 2009 constitutional amendment commissioned the government by reducing the deficit spending. Whether the so -called debt brakes will be reduced, it will be a thorny issue for the German government installed after the country's elections on February 23.

Lack of skilled workers

German companies are facing a problem in finding workers who have appropriate skills, from highly training IT on daytime sponsorships, senior care workers and hotel members. In the German Chamber of Commerce and Industry Survey included 23,000 companies, 43 % of companies said they could not fill open positions. The response increased to 58 % for companies with more than 1,000 workers.

Few German students are concerned with STEM fields, which means science, technology, engineering and mathematics. The population focuses on the problem, and the deficiency in caring for children at reasonable prices makes many women work part -time or at all. The bureaucratic obstacles are an obstacle to the employment of high skills migrants, although the law passed in 2020 aims in 2023 to reduce the process.

Bureaucracy

Long -approval procedures and a lot of papers are clouds on the economy, according to German and economists. It may take years a building permit for wind turbine. Other examples, among the dozens raised by German business groups:

– Companies that install solar panels need registration with both government organizers and their local benefit, although the utility can transfer information to the government level.

– Restaurants must record the temperature of the refrigerator by hand and keep paper copies for the records for a month even if the data is stored digitally.

– A law that requires companies to witness that their suppliers obey the standards of the environment and employment beyond the requirements of the European Union, which puts a burden on German companies from their European competitors.

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