Is Germany about to become ‘The Sick Man of Europe’?
Running out of gas, industry facing closures, inflation soaring, currency dropping, trade deficit... And its new government reversing on everything…
Montage © Facts4EU.Org 2022
Can Germany keep the lights on this winter?
Older readers will recall the United Kingdom being referred to as ‘The Sick Man of Europe’ back in the 1970s. That epithet is – extraordinarily – now being applied to the EU’s largest economy instead. Even by German media commentators.
Facts4EU.Org looks at the problems facing Germany from the point of view of its economy, its energy shortages, its foreign policy failures, and its broken-down military.
Providing readers with an international context for the BBC’s negativism about the UK
All major economies are going through tough times. In our summary report that follows, Facts4EU.Org (in association with CIBUK.Org) provides some key facts to put the United Kingdom’s situation into perspective.
Germany and the UK are the two largest economies in Europe. Germany is by far the largest economy left in the European Union.
This is not a ‘blitzkrieg’ on Germany but rather a point of comparison which readers will not see elsewhere. All data has been researched from Germany’s official statistics agency (Destatis) and from the UK’s Office for National Statistics (ONS).
Brexit Facts4EU.Org Summary
The state of the German State (and some comparisons with the UK)
[Sources: Germany's official statistics agency Destatis and ONS official data, accessed 11 Jul 2022.]
Economic output :
Unlike the UK, Germany’s GDP is still below its pre-pandemic level.
“The continuing Covid pandemic and the delivery and material bottlenecks involved have had a stronger impact on the German economy than on the economic development of most of the other Member States of the European Union (EU).”
- Destatis, 17 Mar 2022
Inflation :
- Germany : 10.7% on food and non-alcoholic drink
- UK: 8.7%
Energy :
Energy prices are rising rapidly everywhere but it’s even worse in Germany.
“The inflation rate thus reached an all-time high for the third month in a row since German reunification. The main reason for the high inflation still is price rises for energy products. But we also see price increases for many other goods, especially food.”
- Dr. Georg Thiel, President of the Federal Statistical Office (Destatis), 14 June 2022
- Energy product prices in May 2022 were by 38.3% higher than in the same month a year earlier
- following a +35.3% increase in April 2022
- The prices of heating oil almost doubled (+94.8%) in May 2022
- Natural gas prices (+55.2%) and motor fuel prices (+41.0%) increased considerably
Currency :
- The Euro – the currency principally backed by Germany - fell 13.1% in the last 12 months
Trade :
- Latest trade figures for May show a deficit for the first time in 30 years
Green agenda :
The new German Chancellor Olaf Scholz is having to perform U-turn after U-turn. Despite having the German Green Party in his coalition government, it has now been agreed that 151 coal-fired power stations will now be needed again.
Germany already burns 27 times as much coal as the UK. Now it’s set to increase dramatically as mothballed coal-fired power stations are fired up.
Military :
For years the Bundeswehr (German armed forces) have been criticised by German media for their ineptitude.
The current EU Commission President Ursula von der Leyen was Defence Minister and was widely seen as the worst minister in Angela Merkel’s government, before being removed and parachuted into her present role in Brussels.
The list of inadequacies is endless, from troops not having rifles, to tanks, fighter jets, and other serious harware not being operational. Here is part of German Defence Minister Christine Lambrecht’s speech at the Bundestag (German parliament) at the end of April:
"On paper, we have 350 Puma infantry fighting vehicles, of which 150 are actually operational."
In some areas of the German military the situation is even worse. A minority of Germany’s fighter jets are serviceable and out of 51 Tiger helicopters only nine can take off. For the infantry there is also a lack of protective vests, night vision equipment and many other essentials.
Foreign policy :
Germany’s stance on its relationships with Russia and with China have damaged the country’s reputation considerably. Its policy of ‘Change Through Trade’ has clearly failed.
Chancellor Olaf Scholz and his colleagues are now playing catch-up in relation to its response to Putin’s invasion of Ukraine. Germany has been roundly and repeatedly criticised by Ukraine’s President Zelenskyy. This contrasts with his praise for the United Kingdom as the European country that has led the charge and done most to help.
Observations
Our snapshot above provides basic information about the state of the German State from official sources.
This Facts4EU.Org report provides some context to the relentlessly negative stories on broadcast media about the state of the United Kingdom. Challenges there are – in abundance. However the picture could be even bleaker in the EU’s largest economy.
This winter can Germany keep its industries running and can people heat their homes?
There are now serious concerns in Germany about its ability to power people’s homes and to keep industry running this winter. Already the government is urging people to use less energy, to preserve supplies for the winter.
With its major pipeline from Russia (Nordstream I) having been closed by the Russians for ‘maintenance’, and with the Nordstream II pipeline blocked, serious questions are now being asked in Germany.
The government there has already said that essential services and the needs of the general population will be prioritised over industry, should energy supplies run short, but that immediately raises a question.
How will the German economy fare if its industry has to start shutting down? And what will happen to the Euro and to the EU itself?
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[ Sources: Detsatis | ONS | German media ] Politicians and journalists can contact us for details, as ever.
Brexit Facts4EU.Org, Mon 11 July 2022
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