Germany in the growth trap

2023-08-28 04:00:00

Container Ship

Business calls for a “reform agenda to increase economic fitness”.

(Photo: IMAGO/NurPhoto)

Berlin/Düsseldorf The comments from economists and politicians after Friday’s weak growth figures were once again alarming. “Economy in decline”, “Kick in the pit of your stomach”, “more economic gossip”.

And it’s been like this for weeks. The economy has not grown for three quarters and there is no improvement in sight. On Friday, the Ifo business climate index fell to its lowest level since 2020.

Concerns about Germany as a business location are increasing. Not because Germany is experiencing an economic downturn. In view of sharply rising capital market interest rates, a weaker global economy and the still noticeable consequences of the major energy crisis, this is not surprising.

The much bigger problem is the structural weaknesses of Europe’s largest economy. To a certain extent, the economic crisis reveals Germany’s structural competitive weakness.

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