>**Jon Henley, Europe correspondent**
>
>**As railway staff, lorry drivers, farmers and others threaten to strike, we examine the challenges the country faces**
>
>Railway staff, lorry drivers and farmers are among those threatening strike action across Germany from Monday in nationwide protests over grievances ranging from pay and conditions to cuts in agricultural subsidies and higher road tolls.
>
>Long Europe’s powerhouse, Germany is struggling with a potent mix of short-term and deeper structural problems that – along with a divided and seemingly ineffectual government – have prompted economists to talk of the “sick man of Europe”.
>
>Here is a look at some of challenges confronting the EU’s most populous state.
>
>**Why is Germany’s economy suffering?**
>
>Sweeping labour reforms in the late 1990s followed by surging demand in China and developing markets helped to create millions of jobs and drive strong economic growth in Germany for more than two decades.
>
>Now, however, the country’s famed economic model appears to be faltering. The IMF predicts Germany will be the only G7 economy to have shrunk in 2023.
>
>In part, the problems are circumstantial and so, hopefully, temporary: a weaker Chinese economy, for example, and the impact of Russia’s war on Ukraine.
>
>Demand for the goods Germany’s export sector mainly produces – machinery, cars, tools, chemicals – fluctuates according to the state of the wider economy.
>
>But the current downturn has also exposed longer-term issues affecting the country’s economic efficiency. Economists point to the country’s rapidly ageing population, lack of recent major investment in infrastructure and high corporate tax rates.
>
>Output is expected to decline by 0.5% in 2024. Longer term, threats include Chinese competition in the electric car market and the cost of reaching net zero, higher in Germany because of its huge, energy-intensive industrial base and rejection of nuclear power.
>
>**Is the state up to the job?**
>
>Navigating rapid economic, social and geopolitical change generally requires openness, adaptability and fast decision-making on the part of state institutions – which are hardly the characteristics of Germany’s bureaucracy.
>
>Digitisation lags behind much of the rest of Europe. Germany still relies heavily on cash, which accounted for about 40% of point-of-sale payments last year against 8% in Sweden. Fast broadband connectivity is improving, but it is still patchy.
>
>The head of Germany’s digital industries association, Bitkom, has called the country a “failed state” in terms of digital government services. Building permits, operating licences and company registrations all take far longer to process than the EU average.
>
>All of this has a structural impact on productivity, as does an administration often criticised as excessively slow, overly legalistic, unnecessarily cautious and in need of far-reaching reform. German red tape, as a consequence, is legendary.
>
>**What’s the government doing about it?**
>
>More than halfway through its four-year term, 82% of German voters are less than happy or not at all happy with the performance of Olaf Scholz’s embattled and divided coalition, made up of the centre-left SPD, Greens and neoliberal FDP.
>
>Scholz’s SPD has fallen to third place behind the centre-right CDU/CSU opposition and the far-right Alternative für Deutschland (AfD), while approval ratings for the Greens are at their lowest in five years and the FDP has lost a third of its support.
>
>The coalition inherited many of the country’s current problems and promised major reforms to fix them – but Covid, support for Ukraine and an energy crisis have put huge strain on its promise to modernise without harming individual sectors.
>
>Already widely seen as ineffective, the government was dealt a further bitter blow late last year when the constitutional court ruled that its 2024 budget broke fiscal rules enshrined in the constitution, triggering a multibillion-euro budget crisis.
>
>The decision meant the government was unable to divert €60bn (£52bn) of borrowing left over from its pandemic emergency fund into a climate and transformation fund (KTF) intended to fuel Germany’s green transition and modernise industry.
>
>Cobbling together a budget without that money will be hard. The Greens are reluctant to compromise on the environment and social spending, the FDP refuses to lift a constitutional debt brake and wants big budget cuts, and the SPD is stuck in the middle.
>
>Amid a spate of state election losses, falling popularity and the alarming rise of the AfD, each party seems increasingly determined to distinguish itself clearly from the others, making agreement on key economic policies even harder to find.
>
>**Who’s striking and why?**
>
>Germany’s national audit office has described the wholly state-owned rail network, Deutsche Bahn as being in permanent crisis, with debts of €30bn and punctuality levels at their lowest in eight years.
>
>Decades of underinvestment are to blame, according to unions. The train drivers’ union (GDL) has called for “unlimited strikes” from 8 January, causing potentially major disruption, mainly over its demand for a 35-hour, rather than a 38-hour, week.
>
>German farmers are protesting against government plans to reduce diesel subsidies and tax breaks for agricultural vehicles as part of €900m of cuts in the farming sector, although they may be appeased by a partial coalition U-turn performed on Thursday.
>
>Farmers had said the planned cuts would threaten their livelihoods and German agriculture’s competitiveness, and warned that from 8 January they would be “present everywhere in a way that the country has never experienced before”.
>
>Hauliers are up in arms over higher tolls, while some doctors – including, from 9 January, specialists – could decide to close surgeries in support of the medical profession’s demands for more state support for an overloaded system.
>
>Later in the year, collective bargaining rounds are due in the retail, construction, air transport, chemical, metal and electrical industries. In a faltering economy and as the cost of living crisis continues, all could prove further flashpoints for strike action.
You need to turn around the phrase. It’s ” Why is Germany’s government making it’s economy struggle and why do they not fix it?”.
There is not a single issue in our economy that is not government made and was not created in the last 10 years.
And not a single of these problems was the “only solution” and the “only way to do it”. All of it is based on uneducated decisions of the gov leading to excessive issues.
Some examples:
– Shutting down Nuclears for reasons even a 6th grader would question
– Bombing everything from healthcare to elderly care to pension with numerous actions
– (Edit: I was wrong with this one therefore removing it: – 12% more Tax on Restaurants)
– Gasoline prices like nowhere else in the world (tax)
– Electricity, heat prices and rent prices explode
– Giving free money (Bürgergeld) to people who don’t want to work and/or are immigrants and paying their rent on top
– forcing people into electric mobility without building infrastructure for it. Now driving electric is even more expensive than using gas and you can’t properly charge everywhere.
– lots of stuff regarding covid
Let that be 10% of what’s happening here.
Edit:
Seems like a lot of people use the downvote button to express loss of reality. So I add some more examples:
– education system left behind for decades, schools not getting funded
– We pay *China* high amounts of Money because its considered a third-world county / developing country
– We burn more coal than ever and we already are world leading yet we have to switch to heat pumps and E-vehicles
– Tax changes in the last 3 years deprived mainly working single parents and similar
By the way everything I write here was researched by me while typing so dont consider appealing facts
High energy prices and despite record immigration a dearth of skilled workers. Trying to compensate low birth rates with refugees from Africa and the Middle East is not going well
German here I give you the short version:
-No digitalization because half of our country is over 50 and doesn’t want to adapt new technologies.
– Shrinking population and high taxes (not very interesting for super qualified immigrants)
– **Former** dependance on relatively cheap gas and energy from Russia that allowed our manufacturing industry to stay competitive (probably too high prices for our export model)
– crumbling infrastructure due to neglect of investment
Fun Fact: A third of our taxes are used to pay pensions.
All of the problems are widely known but because so many people’s salary is depending on not understanding or solving them, there’s no political will to tackle them.
The largest age group is in their early 60s now. They get pensions, require a whole lot of state sponsored healthcare and they don’t produce all that much anymore.
The problem should have been addressed about 10 to 20 years ago. Could have implement strong child support policies 20 years ago or strong immigrant integration policies 10 years ago.
The current government is trying it with immigration but it will take some 5 to 10 years to take effect but in the meantime the government parties lose votes to anti immigrant AfD.
AfD promises strong child support policies but by the time the new kids become doctors in 25 years the problem will have solved itself.
7 comments
>**Jon Henley, Europe correspondent**
>
>**As railway staff, lorry drivers, farmers and others threaten to strike, we examine the challenges the country faces**
>
>Railway staff, lorry drivers and farmers are among those threatening strike action across Germany from Monday in nationwide protests over grievances ranging from pay and conditions to cuts in agricultural subsidies and higher road tolls.
>
>Long Europe’s powerhouse, Germany is struggling with a potent mix of short-term and deeper structural problems that – along with a divided and seemingly ineffectual government – have prompted economists to talk of the “sick man of Europe”.
>
>Here is a look at some of challenges confronting the EU’s most populous state.
>
>**Why is Germany’s economy suffering?**
>
>Sweeping labour reforms in the late 1990s followed by surging demand in China and developing markets helped to create millions of jobs and drive strong economic growth in Germany for more than two decades.
>
>Now, however, the country’s famed economic model appears to be faltering. The IMF predicts Germany will be the only G7 economy to have shrunk in 2023.
>
>In part, the problems are circumstantial and so, hopefully, temporary: a weaker Chinese economy, for example, and the impact of Russia’s war on Ukraine.
>
>Demand for the goods Germany’s export sector mainly produces – machinery, cars, tools, chemicals – fluctuates according to the state of the wider economy.
>
>But the current downturn has also exposed longer-term issues affecting the country’s economic efficiency. Economists point to the country’s rapidly ageing population, lack of recent major investment in infrastructure and high corporate tax rates.
>
>Output is expected to decline by 0.5% in 2024. Longer term, threats include Chinese competition in the electric car market and the cost of reaching net zero, higher in Germany because of its huge, energy-intensive industrial base and rejection of nuclear power.
>
>**Is the state up to the job?**
>
>Navigating rapid economic, social and geopolitical change generally requires openness, adaptability and fast decision-making on the part of state institutions – which are hardly the characteristics of Germany’s bureaucracy.
>
>Digitisation lags behind much of the rest of Europe. Germany still relies heavily on cash, which accounted for about 40% of point-of-sale payments last year against 8% in Sweden. Fast broadband connectivity is improving, but it is still patchy.
>
>The head of Germany’s digital industries association, Bitkom, has called the country a “failed state” in terms of digital government services. Building permits, operating licences and company registrations all take far longer to process than the EU average.
>
>All of this has a structural impact on productivity, as does an administration often criticised as excessively slow, overly legalistic, unnecessarily cautious and in need of far-reaching reform. German red tape, as a consequence, is legendary.
>
>**What’s the government doing about it?**
>
>More than halfway through its four-year term, 82% of German voters are less than happy or not at all happy with the performance of Olaf Scholz’s embattled and divided coalition, made up of the centre-left SPD, Greens and neoliberal FDP.
>
>Scholz’s SPD has fallen to third place behind the centre-right CDU/CSU opposition and the far-right Alternative für Deutschland (AfD), while approval ratings for the Greens are at their lowest in five years and the FDP has lost a third of its support.
>
>The coalition inherited many of the country’s current problems and promised major reforms to fix them – but Covid, support for Ukraine and an energy crisis have put huge strain on its promise to modernise without harming individual sectors.
>
>Already widely seen as ineffective, the government was dealt a further bitter blow late last year when the constitutional court ruled that its 2024 budget broke fiscal rules enshrined in the constitution, triggering a multibillion-euro budget crisis.
>
>The decision meant the government was unable to divert €60bn (£52bn) of borrowing left over from its pandemic emergency fund into a climate and transformation fund (KTF) intended to fuel Germany’s green transition and modernise industry.
>
>Cobbling together a budget without that money will be hard. The Greens are reluctant to compromise on the environment and social spending, the FDP refuses to lift a constitutional debt brake and wants big budget cuts, and the SPD is stuck in the middle.
>
>Amid a spate of state election losses, falling popularity and the alarming rise of the AfD, each party seems increasingly determined to distinguish itself clearly from the others, making agreement on key economic policies even harder to find.
>
>**Who’s striking and why?**
>
>Germany’s national audit office has described the wholly state-owned rail network, Deutsche Bahn as being in permanent crisis, with debts of €30bn and punctuality levels at their lowest in eight years.
>
>Decades of underinvestment are to blame, according to unions. The train drivers’ union (GDL) has called for “unlimited strikes” from 8 January, causing potentially major disruption, mainly over its demand for a 35-hour, rather than a 38-hour, week.
>
>German farmers are protesting against government plans to reduce diesel subsidies and tax breaks for agricultural vehicles as part of €900m of cuts in the farming sector, although they may be appeased by a partial coalition U-turn performed on Thursday.
>
>Farmers had said the planned cuts would threaten their livelihoods and German agriculture’s competitiveness, and warned that from 8 January they would be “present everywhere in a way that the country has never experienced before”.
>
>Hauliers are up in arms over higher tolls, while some doctors – including, from 9 January, specialists – could decide to close surgeries in support of the medical profession’s demands for more state support for an overloaded system.
>
>Later in the year, collective bargaining rounds are due in the retail, construction, air transport, chemical, metal and electrical industries. In a faltering economy and as the cost of living crisis continues, all could prove further flashpoints for strike action.
You need to turn around the phrase. It’s ” Why is Germany’s government making it’s economy struggle and why do they not fix it?”.
There is not a single issue in our economy that is not government made and was not created in the last 10 years.
And not a single of these problems was the “only solution” and the “only way to do it”. All of it is based on uneducated decisions of the gov leading to excessive issues.
Some examples:
– Shutting down Nuclears for reasons even a 6th grader would question
– Bombing everything from healthcare to elderly care to pension with numerous actions
– (Edit: I was wrong with this one therefore removing it: – 12% more Tax on Restaurants)
– Gasoline prices like nowhere else in the world (tax)
– Electricity, heat prices and rent prices explode
– Giving free money (Bürgergeld) to people who don’t want to work and/or are immigrants and paying their rent on top
– forcing people into electric mobility without building infrastructure for it. Now driving electric is even more expensive than using gas and you can’t properly charge everywhere.
– lots of stuff regarding covid
Let that be 10% of what’s happening here.
Edit:
Seems like a lot of people use the downvote button to express loss of reality. So I add some more examples:
– education system left behind for decades, schools not getting funded
– We pay *China* high amounts of Money because its considered a third-world county / developing country
– We burn more coal than ever and we already are world leading yet we have to switch to heat pumps and E-vehicles
– Tax changes in the last 3 years deprived mainly working single parents and similar
By the way everything I write here was researched by me while typing so dont consider appealing facts
High energy prices and despite record immigration a dearth of skilled workers. Trying to compensate low birth rates with refugees from Africa and the Middle East is not going well
German here I give you the short version:
-No digitalization because half of our country is over 50 and doesn’t want to adapt new technologies.
– Shrinking population and high taxes (not very interesting for super qualified immigrants)
– **Former** dependance on relatively cheap gas and energy from Russia that allowed our manufacturing industry to stay competitive (probably too high prices for our export model)
– crumbling infrastructure due to neglect of investment
Fun Fact: A third of our taxes are used to pay pensions.
All of the problems are widely known but because so many people’s salary is depending on not understanding or solving them, there’s no political will to tackle them.
Is the economy really struggling?
Nobody mentioning stupid high rents?
Look at the population pyramid from 2020 https://en.m.wikipedia.org/wiki/Demographics_of_Germany
The largest age group is in their early 60s now. They get pensions, require a whole lot of state sponsored healthcare and they don’t produce all that much anymore.
The problem should have been addressed about 10 to 20 years ago. Could have implement strong child support policies 20 years ago or strong immigrant integration policies 10 years ago.
The current government is trying it with immigration but it will take some 5 to 10 years to take effect but in the meantime the government parties lose votes to anti immigrant AfD.
AfD promises strong child support policies but by the time the new kids become doctors in 25 years the problem will have solved itself.