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The deindustrialization of Germany

politico.eu

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Re: The deindustrialization of Germany

#81

Post by patall »

tdrz wrote: post #47

I found the article quite good but has missed a couple of points that need to be mentioned: 1. The attitude of the average German consumer It seems to me that one of the national sports in Germany is to find cheaper deals for pretty much anything (and then brag about it). Even if it's fractions of a euro! After trimming down on everything that they could, the manufacturers and service providers had to finally reduce…

> I am your boss, you are the employee, now shut up and do as I say

This would also not work in engineering and never did. In fact, it's likely one of reasons why german engineering was so good: because people would (and still do) tell their boss bluntly what is wrong.

Re: The deindustrialization of Germany

#82

Post by oezi »

CamperBob2 wrote: post #28
photochemsyn wrote: post #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 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?

It seems all evidence points to a Ukrainian op performed by a small team and minimal amounts of explosives.

Ukraine is also the only country which had clear motive and no real repercussions if found out (because already at war with Russia).

Re: The deindustrialization of Germany

#83

Post by croisillon »

tdrz wrote: post #47

I found the article quite good but has missed a couple of points that need to be mentioned: 1. The attitude of the average German consumer It seems to me that one of the national sports in Germany is to find cheaper deals for pretty much anything (and then brag about it). Even if it's fractions of a euro! After trimming down on everything that they could, the manufacturers and service providers had to finally reduce…

haha number 1! 20 years later i'm still traumatized about my boss who would spend the whole lunchtime speaking about gas prices

Re: The deindustrialization of Germany

#84

Post by brazzy »

jterrys wrote: post #69
badpun wrote: post #54

Earlier quoted context omitted.

The childred didn't earn it either.

Imagine working hard to guarantee a good future for your children and having the state step in and taking it away.

Imagine working harder that you can possibly imagine to guarantee a good future for your children, and yet not being able to because the deck is stacked against you, or you're just unlucky - and having the state step in to at least give them a fair chance.

Then imagine someone saying that's bad because it's important for other people's kids to be able to live in luxury without ever having to work a day in their lives.

Re: The deindustrialization of Germany

#85

Post by oezi »

WastingMyTime89 wrote: post #8
whinvik wrote: post #2

> Nearly 20 years ago, Germany overcame its reputation as the “sick man of Europe” with a package of ambitious labor market reforms Does anyone know what those were?

The Hartz reforms are fairly famous, yes. It’s mostly social dumping. Forced contraction of actual wages through reform of the benefits plans. It’s important to note that they are overall poor reforms and should have been nullified by the German money value shifting due to the knock off effect on the saving rate. This didn’t happen because they were put in place at the same time as the Euro and the overall imbalance…

Why should the reforms be nullified by a change in saving rates?

Hartz IV reforms pushed unemployed people back to work by reducing long term unemployment benefits to 400 EUR + rent. This certainly reduced purchasing power first (by reducing available money) but also quickly freed up social spending as employment rates soared.

Re: The deindustrialization of Germany

#86

Post by Archelaos »

nradov wrote: post #33
Michelangelo11 wrote: post #18

Earlier quoted context omitted.

Right, I have the same impression -- it's really all over the place. Anyway, the absolute key issue seems to be energy costs. If they hadn't skyrocketed, this wouldn't be happening.

Not just energy but specifically access to natural gas. Even when not burned for power and heat it acts as an essential feedstock for much of the German chemicals industry. With flows from Russia being reduced or eliminated there is no choice but to relocate production.

The German government is subsidising gas consumption by industry very heavily at the moment to prevent this.

A press release on the relevant legislation can be found here (in German): https://www.bundesregierung.de/breg-de/aktuelles/energieprei...

The most important section in this matter reads in English translation as follows:

"From January 2023, industrial customers will receive 70% of their natural gas consumption in 2021 from their suppliers at a guaranteed 7 cents per kilowatt hour. For heat consumption, the price will be capped at 7.5 cents per kilowatt hour, also for 70% of consumption in 2021. For the remaining consumption, industry will pay the regular market price."

Re: The deindustrialization of Germany

#87

Post by aeyes »

tdrz wrote: post #47

I found the article quite good but has missed a couple of points that need to be mentioned: 1. The attitude of the average German consumer It seems to me that one of the national sports in Germany is to find cheaper deals for pretty much anything (and then brag about it). Even if it's fractions of a euro! After trimming down on everything that they could, the manufacturers and service providers had to finally reduce…

1. Made in Germany for consumer products might be worth less today but the export of industrial supplies like machines, chemicals and materials are much more important to the economy as a whole. Outside of Germany it is still quite respected - to the point where foreign companies give themselves and their products German sounding names while slapping German flags on their boxes to sell more.

2. Why software Made in Germany doesn't work well has a number of reasons but I'd say that it is primarily because it is much harder to raise capital for things that only might work 1 out of 50 times. People who start businesses are much more risk-averse and most try to be profitable or self-financed from year 1. This makes them uncompetitive in innovative sectors.

Re: The deindustrialization of Germany

#88

Post by codethief »

tdrz wrote: post #47

I found the article quite good but has missed a couple of points that need to be mentioned: 1. The attitude of the average German consumer It seems to me that one of the national sports in Germany is to find cheaper deals for pretty much anything (and then brag about it). Even if it's fractions of a euro! After trimming down on everything that they could, the manufacturers and service providers had to finally reduce…

Could you provide some references that back up your claims?

Re: The deindustrialization of Germany

#89

Post by tasubotadas »

sparrc wrote: post #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 th…

Yes. The worst is yet to come.

- Germany is heavily reliant on industry (like Autos)

- Cheap energy has ended due to war in Ukraine

- The available replacements are going to be even more expensive (and they are still closing more nuclear plants)

- The production costs will increase reducing their competitiveness even further

- The competitives was bad even before this (VW vs Tesla anyone?)

- Once the huge layoffs and closures will begin, the entire economy will enter recession.

Industry-focuses businesses are now low-margin and high-competition (competition mostly coming from Asia). The same is happening here what happened during the shift of Agriculture economy into Industrial economy.

And the shift to services (tech/software specifically) was pretty much non-existent. Also, it's unlikely to become any better due to alienation of investors (who wants to invest in a country where everybody is taxed and red-taped into oblivion?).

So... who nows. Germany is probably going to pull a "Greece" on us :).

Re: The deindustrialization of Germany

#90

Post by brazzy »

nicbou wrote: post #43
choeger wrote: post #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 sign…

I help German immigrants for a living. It's currently one of the hardest countries to settle in due to the archaic and labyrinthine bureaucracy. Berlin's immigration office is completely unable to handle its workload, delaying immigration to the point people just give up and leave. I've been here long enough to apply for citizenship, but Berlin has a backlog of 26,000 applications and literally refuses new ones until…

Berlin is infamously badly governed. It should not be considered representative of Germany as a whole.
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