2024-04-19 10:23:44
The war in Ukraine has clear consequences for the German economy. The left wants to know how much wealth has been lost as a result. But it’s not that simple, says the Ministry of Economic Affairs.
According to a calculation by the Federal Ministry of Economics, the war in Ukraine and the energy crisis have led to losses of around 160 billion euros in prosperity in Germany. This emerges from a response from the Federal Ministry of Economics to a request from left-wing MP Jörg Cezanne, which was available to AFP on Thursday. However, the ministry emphasized that the bill is not fully informative.
Before Russia’s attack, the federal government had assumed average price-adjusted GDP growth of around 3.0 percent annually in 2022 and 2023. In fact, GDP only increased by 0.7 percent annually. In purely mathematical terms, the real difference is around four percent or around 160 billion euros, explained the ministry.
“It is not possible to quantify the loss of prosperity”
However, in its answer to Cezanne, it qualified: “It is not possible to quantify the loss of prosperity due to the overlapping negative exogenous influencing factors of the last few years, primarily the corona pandemic and the Russian war of aggression against Ukraine, which violates international law.” This would require knowledge of how the German economy would have developed without these shocks.
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The left-wing politician particularly criticized the federal government’s reaction: It is aware that there are “blatant losses of prosperity,” Cezanne told the AFP news agency. “But their response to this is completely inadequate, with budget cuts and insane austerity measures.” Compensatory measures against the high gas and electricity prices were not enough, and the debt brake hindered necessary investments.
Loss of prosperity may be even greater
According to a calculation by the Hans Böckler Foundation for the ARD magazine “Panorama”, the loss of prosperity is much higher. According to this calculation, Germany lost five percent of its gross domestic product annually as a result of the Ukraine war. The basis is the International Monetary Fund’s estimates from autumn 2021 for German GDP up to 2024. This is an average of around 2,600 euros per capita per year.
The loss of prosperity is higher than in other countries, said Sebastian Dullien from the trade union-affiliated Hans Böckler Foundation to ARD. In Sweden it is 1,700 euros, in Italy 230 euros. The average in the EU is around 880 euros. “Germany has a few structural characteristics that have made it particularly vulnerable,” Dullien told the broadcaster. “We have a very large industrial sector. That means we consume a lot of energy.” In addition, the federal government intervened in the gas markets “relatively late”.