Difficult times for the Germany. From the locomotive of Europe to a ball and chain, this is how – through hyperbole – we can summarize the path of Berlin, struggling with various crises and all difficult to solve. The main problem is certainly the economynow at a standstill: the latest warning signal came from the Ifo (Leibniz Institute for Economic Research at the University of Munich), which revised its estimates downwards and now indicates a forecast of zero growth for this year, while in 2025 GDP should grow by 0.9 percent instead of the 1.5 percent previously estimated. A growth of 1.5 percent could be achieved only in 2026. Too far away.
Germany has entered a crisis so deep that it seems difficult to see a way out. Established business models have been called into question and shattered by a series of events: from decarbonization to digitalization, through the Covid-19 pandemic. Up to the most relevant issue: the energy price shock. The war in Ukraine has been a major problem from this point of view, especially for the “heaviest” country in the EU: “The largest member state is becoming a burden for the rest of the European Union, a dead weight that drags down the rest of the continent,” economist Henrik Muller emphasized.
The crisis hits industry first and foremost, especially the high energy density industry. In the front row mechanical engineering and automotive industryalready struggling with competition from China and restructuring related to decarbonisation and digitalisation. The transition from combustion engines to electric ones has put the German giants in crisis, just think of the Volkswagen: the giant is considering closing one of its factories to cut costs, to be precise 10 billion euros by 2026. A historic decision, considering that it would be the first time in the history of the company.
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