Once the locomotive of Europe, Germany is now lagging behind. The indicators are in the red, with cascading social plans: 4,000 jobs cut at the automotive supplier Bosch, 11,000 fewer jobs at the steelmaker Thyssenkrupp by 2030… But the symbol of this struggling economy , it is Volkswagen: the country's largest employer is preparing to close two sites, a first since its creation in 1937. The automobile industry is hit hard, Ford is coming moreover to be added to the list of manufacturers in difficulty.
A few months ago, Chancellor Olaf Scholz promised “an incredible revival” of the economy. But it is the recession which threatens, for the second year in a row. Companies remain weighed down by the drop in orders and repeated crises (Covid, war in Ukraine, etc.). They are now deprived of cheap Russian gas and energy bills are soaring, which strongly penalizes the steel and chemicals industries. .
The famous “made in Germany” is selling less well, demand is falling: very bad news for Germany which generates half of its GDP thanks to world trade. China is also becoming an increasingly fierce competitor, especially in the electric car market but also in other areas where Germany was a leader, such as steel, chemicals and machine tools.
The imminent return of Donald Trump to the White House and the protectionist measures to come further increase concerns: the future increase in customs duties could cost Germany 180 billion euros and, ultimately, one and a half points of growth . The United States is Germany's largest trading partner, now ahead of China: 10% of German exports go to the United States.
The government is banking on a recovery in consumption and anticipates growth of 1.1%, but other experts, less optimistic, are talking about an increase in GDP of only 0.4%. The levers to revive growth have been identified: we must reduce bureaucracy, lower energy prices, improve sometimes obsolete infrastructure such as rail, broadband connections, the mobile telephone network, etc.
The key is also to attract the qualified workforce that Germany so badly needs. Berlin has signed migration agreements with Kenya, India and Georgia and promised to facilitate the issuance of visas. Last year, staff shortages cost German companies 50 billion euros.
