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The deindustrialization of Germany

politico.eu

21–30 of 175 posts

Re: The deindustrialization of Germany

#21

Earlier quoted context omitted.

> In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since. Those who like to bully the poorer members of the Union on the grounds that they're being bankrolled by the the wealthier states would be wise to take note of this, and take a more intelligent and informed view of EU "subsidies". The idea that the wealthier member states are showering these co…

This sentiment is so common in Germany. Everyone blames the European "south" for Germany's problems as if Germany was some sort of hero doing all the work. The Greek economic crisis is a classic example. German banks mess up when they lend too much money to Greece, Germany does a bailout for "Greece", the money actually goes back to German banks. Then people have this perception as if they somehow paid for all the so…

It's important to note the other side of the medal: Today's inflation is to a large degree caused by the expansionist money policy that was necessary to prevent a Greece financial collapse (which would have undermined the Euro as a whole). Greece financial problems were, at least to a significant degree, caused by debt-financed social expenses that are unheard of in Germany. So the conclusion that German workers are financing Greek's early retirements is not completely bullocks.

It's very important to understand that Greek's government also played the "Germany is at fault" or "Germany has to pay" card very effectively, when Germany's government played the "Lazy Greeks" card to justify their own fiscal policy.

Re: The deindustrialization of Germany

#22
The article mentions 'high energy prices' and 'energy costs' and alludes to 'Kremlin cutting off natural gas supplies' but otherwise provides zero discussion of the overall energy picture in Europe. A couple of major issues they could have addressed:

1. In retrospect, was the German decision to eliminate nuclear power wise? Could they have squeezed another decade of power out of their existing plants, even if they didn't see that as a viable long-term energy source (having to import uranium fuel is not all that better from having to import natural gas, economically speaking)? Granted, nuclear only provides electricty, while BASF needs methane.

2. Russian gas exports to Germany have been replaced by US LNG gas exports, but the cost differential is pretty huge. Looking around, I see this site has discussed it before (Nov 2022):

https://www.politico.eu/article/cheap-us-gas-cost-fortune-eu...

That's an interesting article, pointing to tight markets being taken advantage of by European energy traders (though Exxon and Chevron shares are up 50% since the price boom, Permian Basin development, booming LNG exports, etc.). It also might explain why some European interests see a finacial benefit in prolonging the Ukraine war (i.e. keeping Russian gas sanctions in place).

3. Somewhat amusingly, if BASF moves a lot of production China, then their natural gas feedstocks will be coming from... Russia's massive Sakahalin 1 & 2 projects (built with extensive help from Exxon and Shell respectively, and ironically)?

https://www.reuters.com/business/energy/russias-sakhalin-inv...

Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.

Re: The deindustrialization of Germany

#23
Germany is extremely well positioned to rise again economically in the next five years or so. It's attracting migrants from all over Europe, it's located quite nicely in the middle of the continent and it's currently building a massive capacity of renewable energy.

The only real problem right now is efficiency of spending. Nearly all public sectors (defense, housing, transportation, education, healthcare) bemoan significant lack of financing and workers. Yet, Germany spends enormous amounts of money and employs record levels of workers there. It's like all the money and workers just vanish. This leads to the situation that it's currently difficult to hire in Germany.

This process leads to the attraction of skilled workers especially from eastern Europe. I don't know where this ends, but I doubt the spending and employment will get significantly more efficient. Instead, Germany might very well attract additional millions of well-educated Poles, Ukrainians, Romanians, etc.

I wouldn't be surprised if by 2030 we see a Germany with a population of 90M people absolutely dominating the European market.

Re: The deindustrialization of Germany

#24
post #13

I have tried to go against some of the arguments because some are wrong, some are okayish, and some are just plain wrong, but I gave up. The article moves all over the place pulling random facts from all kinds of places in support of the idea that Germany is declining. Maybe that's true, maybe not. This article appears not rigorous enough to come to a right conclusion.

Honestly, I've never seen a good article from Politico eu.

Re: The deindustrialization of Germany

#25
Opposite lots of commenters here deriding the article as "all over the place", I thought it was very well-written and comprehensive. Seems like there are concerns across a wide swath of companies and industries in Germany.

Reading between the lines, the proposed solution seems something like lower corporate taxes (currently making decamping to Dublin more attractive) and lower energy prices.

The risk brought up is that if things continue it will likely lead to increasing blaming of immigrants and a rise in the far-right AfD party, which has already started.

Re: The deindustrialization of Germany

#26

Earlier quoted context omitted.

This sentiment is so common in Germany. Everyone blames the European "south" for Germany's problems as if Germany was some sort of hero doing all the work. The Greek economic crisis is a classic example. German banks mess up when they lend too much money to Greece, Germany does a bailout for "Greece", the money actually goes back to German banks. Then people have this perception as if they somehow paid for all the so…

Why are you only talking about the lender's fault when it comes to bad loans.

Because assessing and assuming risk is literally their entire reason to exist.

Re: The deindustrialization of Germany

#27

Earlier quoted context omitted.

> In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since. Those who like to bully the poorer members of the Union on the grounds that they're being bankrolled by the the wealthier states would be wise to take note of this, and take a more intelligent and informed view of EU "subsidies". The idea that the wealthier member states are showering these co…

This sentiment is so common in Germany. Everyone blames the European "south" for Germany's problems as if Germany was some sort of hero doing all the work. The Greek economic crisis is a classic example. German banks mess up when they lend too much money to Greece, Germany does a bailout for "Greece", the money actually goes back to German banks. Then people have this perception as if they somehow paid for all the so…

Let's not absolve Greece of fault. They massively lied on their data to join the euro with a financial situation that was obviously not going to work in the long run. No way would Greece have gotten as much money in the 00s had they published their real data.

That said, the German opinion on Greece was(is?) pretty fucked yeah. Especially if you look at how often we ignore the situation for the average Greek in these discussions. A shitload of medically necessary operations were cancelled in the downsizing of the Greek state, even the democratic nature of the state itself was seized by the troika.

Re: The deindustrialization of Germany

#28

The article mentions 'high energy prices' and 'energy costs' and alludes to 'Kremlin cutting off natural gas supplies' but otherwise provides zero discussion of the overall energy picture in Europe. A couple of major issues they could have addressed: 1. In retrospect, was the German decision to eliminate nuclear power wise? Could they have squeezed another decade of power out of their existing plants, even if they di…

Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.

Do we know with any degree of certainty who was actually responsible for sabotaging the pipeline?

Re: The deindustrialization of Germany

#29

And obviously the reason is the lack of labour reform and not the billions in handouts currently given by the US and China which the EU refuses to match because of its brain dead insistence on undistorted markets and fiscal rigour. Ah Politico, such well researched and reasonable journalism, it warms my heart…

> because its brain dead insistence on undistorted markets and fiscal rigour

The issue lies in the fact that the EU is comprised of numerous countries within a single market. When one nation begins to subsidize a company or an entire sector, the other nations are left powerless, merely watching their own companies struggle to compete against those bolstered by government subsidies. It becomes a game of pouring government money down the drain and destroying any semblance of free market mechanisms.

Re: The deindustrialization of Germany

#30
post #13

I have tried to go against some of the arguments because some are wrong, some are okayish, and some are just plain wrong, but I gave up. The article moves all over the place pulling random facts from all kinds of places in support of the idea that Germany is declining. Maybe that's true, maybe not. This article appears not rigorous enough to come to a right conclusion.

Honestly, I've never seen a good article from Politico eu.

Politico is owned by Axel Springer, which is the German equivalent of Fox News, if that explains it.
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