Bloomberg News reported Saturday that the sun is setting on Germany's once prolific industrial base as the country continues to grapple with a protracted energy crisis and widespread economic downturn.
Many German manufacturing and industrial companies have decided to cut jobs or close factories, making it difficult for them to invest elsewhere in the future, mainly thanks to the rising energy costs caused by the country's introduction of green energy. We are considering. Germany was once widely considered to be Europe's economic powerhouse, but a long-standing decline in manufacturing is now accelerating due to high energy costs and red tape. rising inflation This is weakening the competitiveness of this field. according to Go to Bloomberg News.
According to Bloomberg News, Germany's manufacturing industry accounts for about 20% of the country's gross domestic product. Germany's central bank, the Bundesbank, has denied suggestions that the country is undergoing a full-scale deindustrialization, insisting that the decline in Germany's manufacturing industry will be fine if it is gradual. Industry executives are singing a different tune. (Related: German farmers launch mass protests against policies that could threaten livelihoods)
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“Despite the motivation of our employees, we have reached a situation where we are unable to export truck tires from Germany at competitive prices,” Maria Roettger, who runs Michelin's operations in Northern Europe, told Bloomberg. . She said: “If Germany cannot export competitively in an international context, the country will lose one of its greatest strengths.''
Her company has closed two of its factories in Germany and plans to downsize by a third by the end of next year, according to Bloomberg, and American rival Goodyear has done the same for its two German facilities. It is said that they are planning measures. Approximately 10% of companies involved in the chemical industry plan to permanently suspend production.
“To be honest, I don't have much hope,” Stefan Klebert, CEO of manufacturing equipment supplier GEA Group AG, told Bloomberg News. “I'm really unsure whether we can stop this trend. A lot of things are going to have to change quickly.”
Germany's November 2023 Manufacturing Purchasing Managers' Index (PMI) is a “measure of overall business conditions based on measurements of new orders, output, employment, supplier delivery times, and purchased inventory” and is a measure of the industry's This shows that the overall management team is doing well. We are pessimistic about the future outlook for this field. according to To S&P Global. According to Politico, many other executives have consistently warned that rising commercial power costs in the country could make it impossible to continue operating in Germany.
“We are no longer competitive,” German Finance Minister Christian Lindner said at a Bloomberg event in February. “With no growth, we are getting poorer. We are falling behind.”
The country is aim Following former Chancellor Angela Merkel's lead, the country aims to reach “net-zero” emissions by 2050, relying on sources such as wind, solar and hydrogen fuel for energy demand and supply. decided In 2011, the country's nuclear power plants were finally shut down.Despite extensive regulation and spending by the German government to accelerate the green transition, the country not on track To meet climate change goals.
A poor economic outlook and energy crisis are also rattling German politics. The country's leading right-wing populist party, Alternative for Germany (AfD), has more than doubled in popularity since Russia's invasion of Ukraine began. according to Poll data compiled by Politico.
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