German economy: doing great – as always?
The German Chamber of Commerce DIHK just published new figures showing how well the German economy is doing – as always, it seems. A poll oft he DIHK among 23,000 companies found that the mood among managers is excellent, much more positive even than in January. We are not surprised, why should we? The prognosis for economic growth was risen from 1.3 to 1.8 percent for the year 2015. Reading this only confirms our expectations. 250,000 new jobs will have been created by December – 50,000 more than estimated half a year ago. Naturally.
Everyone here got used to these good news. We can hardly remember the days when we all worried about the development of the German economy. That was the time when Newsweek published it’s cover story (what I remember as): „Nearly five million unemployed in Germany – and you still can’t buy milk on Sundays!“. The Newsweek correspondent Bill Powell, whose office was next to mine, greatly enjoyed the shock wave his article caused in Germany. The point he made was taken very seriously and the issue was discussed in numerous talkshows.
Later, when Germany had learned its lesson, liberated the job market, reformed its formerly generous welfare and unemployment support system – and even milk was available on Sundays – other Germany correspondents predicted the decline of Germany’s economic strength. In 2004, I worked with The Washington Post’s economic writer Peter S. Goodman on a story about the German car industry. General Motors was to close down its Opel factory in Bochum, an automobile plant of tradion in the Ruhr area in western Germany with … employees. Peter couldn’t believe the old-fashioned positions of the powerful trade union IG Metall and other players involved. Discussing our reporting, the journalist predicted the near doom oft he German economy. In his view, no one here had understood the new rules of globalization.
It didn’t happen. Instead, Germany’s economy was doing even better. The global financial crisis took place, then the Euro crisis was shaking the industrial world in Europe, but Germany remained stable.
In 2013, the Germany correspondent of The Washington Post, Michael Birnbaum, and I worked on a story about the German economy. He predicted that it was going to suffer dramatically from the fracking boom in the US. He foresaw that many German companies were going to leave Germany fo the cheap energy in the US. As it turned out, it didn’t harm the German economy.
But the German Angst is there, I can feel it myself. The downfall of the German economy is only delayed. The catastrophe is ahead, it’s only a question of time. We are not prepared for the future. The bad news is multi-faceted: There is already a massive lack of skilled workers. German companies are desperately seeking qualified engineers. The demografic development is alarming, very few young people will soon have to support masses of old people, who will live even longer, getting good pensions. Germany doesn’t care enough about the education of the offspring of immigrants. Refugees are flooding into wealthy Germany, but their integration takes far too long. The gap between the rich and the poor in Germany is quickly widening, while the formerly strong middle class is fading. The traditionally great infrastructure in Germany, one of the pillars of the economic strengh for half a century, hasn’t been invested in for decades. And most of Germany’s mid-size companies, the backbone of the economy, are not fit for the digital revolution.
Even the DIHK executive manager Martin Wansleben just warned of too much optimism, despite the positive figures. „There is no euphoria. This is an artificially boosted upswing,“ he said on Thursday.
But the downfall oft he German economy has been predicted so repetitively – German citizens might not believe the warnings any more, no matter how true they are.