The country’s economic problems could become irreversible if decisive measures are not taken.
Over the past five years, Germany’s economy has shrunk by 5% compared to the potential growth level it could have achieved before the pandemic. Experts call this crisis the most severe since the reunification of East and West Germany.
The main reasons cited include high energy prices and a decline in export volumes. These factors have led to a decrease in household incomes, with German families becoming, on average, €2,500 poorer per year.
The industrial sector is suffering the most. According to forecasts, the German automotive industry could lose up to 40% of its added value in the next decade, with many production facilities moving abroad. The largest steel producer, Thyssenkrupp, plans to cut around 40% of its workforce and shut down two blast furnaces by 2030.
Bloomberg notes that Germany’s crisis coincides with the weakening of its economic model at a time when Europe relies on its industrial strength to counter China’s growing influence.
