"Gone are the days when Germans could consider bad economic news from Europe as other people’s problems. The continent’s once unchallenged industrial leader is in deep trouble — so much so that some neighbours now, only half-jokingly, talk about it as a “failed state” where the trains don’t run and 10-year-olds can’t read. Not only does Germany’s image abroad need improving, the country also needs to rethink its growth model and is best advised to do so in co-operation with fellow Europeans. This is why the first and loudest political reactions from German policymakers on Draghi’s magnum opus miss the point." [..] "Many in Germany and other northern European countries still assume that an EU industrial strategy would amount to them having to support the rest of the bloc. But that gets things the wrong way round: Europe has the opportunity to reassert itself in the digital sphere, master its green transition and innovate more. Looked at in that light, Germany or the Netherlands, say, would gain as much they give from a new industrial strategy. But this also requires both the European Commission and other member states not to treat industrial policy as a vehicle for redistribution by stealth. Instead they should be serious about building on strengths and enhancing flexibility for the benefit of the continent as a whole. Draghi’s report offers a blueprint — it’s up to everyone, including Germany, to seize the opportunity." In sintesi, la Germania riuscirà ad accantonare la miopia che ha contraddistinto la sua politica industriale negli ultimi decenni?
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Germany has been known for its efficient manufacturing and orderly society, but a lot has changed in the past two decades. A recent story in The Guardian explains several factors behind these trends. "There are structural causes, the main one being a determination to cling on to the model that has brought it such success but is now past its sell-by date," said Larry Elliott. What worked well for Germany over many years has had challenges more recently in the midst of intense technological change. Agile labor markets are critical. "The US is the prime example of a country that has moved with the times and has been able to adapt its industrial structure to changing circumstances," said Elliott when remarking about a new book by Wolfgang Munchau on the end of the German economic miracle. A major lesson for all countries is not to assume that past success is indicative or guarantees future success - there are so many technological, social, political, and economic forces at play and agile markets are integral to the adaptation process. #economics #markets #technology #germany https://lnkd.in/ePiPhJQ8
The German problem? It’s an analogue country in a digital world | Larry Elliott
theguardian.com
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Værd at læse i Politico om Europas økonomiske kollaps lige nu: Once synonymous with cutting-edge automotive technology, Europe today doesn’t have a single entry among the 15 bestselling electric vehicles. As former Italian Prime Minister and central banker Mario Draghi noted in his recent report on Europe’s flagging competitiveness, only four of the world’s top 50 tech companies are European. If Europe remains on its current trajectory, its future will also be Italian: that of a decaying, if beautiful, debt-ridden, open-air museum for American and Chinese tourists. With Europe facing stagnant growth, flagging competitiveness and tensions with Washington — to name but a few flashpoints — you might expect a robust public debate over a sweeping reform agenda. If only. Draghi’s report got about a day’s worth of coverage in the continent’s major media outlets and then was quickly forgotten. Similarly, the perpetual ringing of alarm bells by the IMF and ECB falls on deaf ears. That’s likely because Europeans aren’t really feeling any pain — not yet anyway. While the EU might account for an ever-dwindling share of the world’s GDP, it leads all the global tables when it comes to the generosity of its members’ welfare systems
Europe’s economic apocalypse is now
politico.eu
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If the release of the Draghi report will not send shock waves through Europe’s political leadership, nothing ever will. Draghi has outlined what he thinks is needed to boost Europe’s competitiveness to avoid decline. He asks member states to set priorities straight and pivot from old technologies to a digital and green future. He pushes the commission to better focus its legislation - there is too much of it and it is often contradictory. He puts a price tag on his plan and says more common funds will be needed because private money alone will not be sufficient. He wants a full capital markets union (CMU). His report asks for an urgent pivot of most European economies. Germany in particular appears to have much home work to do:
Does Germany Need an Economic Pivot?
https://americangerman.institute
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🇪🇺 Europe's economic apocalypse. The long-term prospects for the survival of the European project are becoming increasingly vague. In the near future, the European Union will be shocked by the delay in a trade war with Trump. And this is against the background of confrontation with Russia and contradictions with China. However, Trump's tariffs will only reveal all the systemic sores of Europe. In 2008, the economies of the United States and the European Union were on an equal footing. Now the Americans are ahead by a margin of 30%. US stock markets have tripled since 2005, while European stock markets have grown by only 60%. Americans leave Europeans far behind in terms of both labor productivity and R&D spending. Moreover, the lion's share of scientific and technological expenses in Europe falls on the German automotive industry alone. And it is in crisis due to her inability to compete with the Chinese and draconian climate regulations. Even tariffs do not help, besides, the Europeans are quickly losing the Chinese market. Almost 40% of German industrial enterprises are considering the possibility of closing factories and relocating. VW, Ford and ThyssenKrupp are already cutting staff in full force. The situation will be aggravated by a demographic pit with a collapse in the birth rate, which cannot even be replaced by a wave of migration. Against this background, the maintenance of the welfare state model becomes impossible. France is a vivid example of this - with a state budget deficit of 6% of GDP and the need to spend a third of the entire budget on pension payments alone. And any reduction in the social sphere will lead to popular uprisings and destabilization of European institutions that have lost out in global competition to other players.
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Wolfgang Münchau – in his latest book KAPUT The End of the German Miracle – is trying to summaries reasons for a systemic crisis of German economy. Wolfgang Münchau - co-founder and director of Eurointelligence. He writes a weekly column on European affairs, syndicated to El Pais, Corriere della Sera and Handelsblatt. He was a Financial Times columnist from 2003 until 2020 and co-founder and editor-in-chief of Financial Times Deutschland. Münchau is trying to diagnose a crisis in German economy. He indicates many reasons for a systemic crisis but I think he misses a few important ones. 1) Germany gained a lot on being a EU member: a. Moving some manufacturing and services to CEE (mainly Poland) gained its competitive advantage and margin. At present average salary level raised as well as electricity prices. Poland has highest electricity prices within EU mainly due to carbon tax transfers. b. EURO zone – was a way to transfer funds to Germany and to keep competitiveness of German economy due to relatively low exchange rate EURO against other currencies. Germany (mainly) and the Netherlands were the only beneficiaries of European economies. 2) Green Deal was imposed all other EU member states in order to centralize power under German-French helm in order to transfer funds from peripheries into the central economies. Exerpts from Münchau’s book: (…) Modern Germany has never known anything other than corporatist industrial society. There is a degree of managed friendly conflict between trade unions and employers, but both ultimately operate within the same system. On the big questions, they agree. Successive governments have regarded it as a priority of German foreign policy to help German companies secure orders and to support the interests of domestic industry at home, in Brussels and abroad. Scholz and his government did not see this crisis coming. Even the Greens were fully paid-up subscribers to the corporatist industrial model. For all their political differences, they all agreed on this. Industry was good. The right wanted industrial profits. The left wanted industrial jobs. The Greens dreamt of a green industry. Nobody questioned the over-reliance on industry itself. Instead of diversifying away from traditional industry towards other sectors, Germany doubled down. It was the only system they ever knew.
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Is Germany approaching a tipping point in which only an economic Zeitenwende, a more radical, epochal change, will be able to address some of the current economic weaknesses, or does the country merely need to undertake some added adjustments to its model to regain the lost momentum? alexander privitera addresses the geopolitical uncertainties that German business and politics must confront if they want to recharge the country's economic engine. Read more: https://lnkd.in/e8FKmV8Y
Does Germany Need an Economic Pivot?
https://americangerman.institute
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Navigating Europe's Crossroads: Protecting 'Made in Europe' and Fostering Growth. In light of recent discussions on the re-industrialization of Europe, it is crucial to address the need to protect the "Made in Europe" brand, preserve jobs, and foster a competitive European Union. The latest report by Mario Draghi, former President of the European Central Bank, underscores the urgency of these priorities. Draghi emphasizes the importance of enhancing manufacturing capabilities, supporting small and medium-sized enterprises, and fostering a climate of innovation. Additionally, the Budapest Declaration highlights the need for economic cohesion and the preservation of local employment. The European Commission, under the leadership of Ursula von der Leyen, has laid out an ambitious agenda to bolster the EU's competitiveness and industrialization. Von der Leyen's mission is to stop Europe's "slow agony" of decline and boost the EU's ability to compete with global giants like the U.S. and China. The report by Mario Draghi further stresses the need for Europe to become more competitive to avoid economic decline. The Budapest Declaration also calls for urgent action to close the innovation and productivity gap within the EU and with global competitors. By fostering a business-friendly environment, Europe can attract and retain investment, ensuring that European industries remain competitive on the global stage. It is crucial to streamline regulations to enhance competitiveness and protect local industries from unfair global practices. The combined efforts of policymakers, industry leaders, and stakeholders will be essential in driving sustainable economic growth and securing Europe's position as a leader in the global economy.
Von der Leyen’s mission: Stop Europe’s ‘slow agony’ of decline
politico.eu
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Germany faces currently many challenges, probably more than most other large European economies. Why has come one of the strongest economy in the world so much under pressure? This article offers in my opinion a very good insight!
The German problem? It’s an analogue country in a digital world | Larry Elliott
theguardian.com
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Germany's economic outlook is growing dimmer, with predictions of contraction through 2024. As the only G7 nation expected to shrink this year, weak domestic demand and global uncertainties are stunting recovery efforts. This isn’t just a crisis for Germany; it's a warning siren for the global economy. The automotive sector, pivotal to Germany's identity and economy, could trigger disturbances in global supply chains—impacting everything from electric vehicles to luxury retail. As businesses hold back on investments and consumers remain cautious, we’re left feeling the weight of uncertainty. Policymakers must act decisively to address these structural weaknesses. In a world where interconnectedness defines our economic landscape, Germany's struggle could have far-reaching effects. Are we prepared for what comes next? The urgency to innovate and adapt has never been more pressing.
Germany Faces Another Year of Economic Contraction: Bundesbank Warns of Growing Global Impact
ctol.digital
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Sending out some confidence 💪 and positivity 👍 from our CEO, Burkhard Eling especially to the #chemicalindustry 👩🔬👨🔬 during these challenging times. I agree with him and would like to summarize once again why #Germany can overcome the current challenges: 1. Small and medium-sized companies with a strong entrepreneurial spirit 2. Strong global network of #people and #supplychains 3. #Workforce and #education system 4. #openness and #respect 5. strong #democratie Let us all be optimistic 😃, focus on our strength 💪 and encourage #collaboration 🤝 across all industries!
Can Germany as a business location look to the future with confidence? I firmly believe so. Although, there’s no doubt about it: Germany’s #economy is currently facing some major challenges. The leading German economic research institutes expect growth of only 0.1 percent for the current year. News outlets such as The Economist were already asking, “Is Germany once again the sick man of Europe?” The latest issue of the German Capital Magazin took a different and much more optimistic approach, asking for an opinion on why #Germany will be able to tackle its current challenges and emerge even stronger. This optimistic view of things is a lot closer to my heart and mindset than the usual pessimism. Yes, I believe that we can overcome the economy’s current weakness, as long as we make a joint effort. Here are five reasons why I’m confident and optimistic about Germany’s economic future: 1. Our small and medium-sized enterprises, and family businesses in particular, are an important backbone of the German economy. They tackle challenges such as digitalization and climate change pragmatically and with long-term concepts. 2. We excel at building global networks for connecting people, transporting goods, and sharing the associated data. In terms of efficiency and quality in groupage logistics, Germany is a top logistics location. 3. The greatest strength of the German economy is its people. Our workforce is exceptionally well educated and trained. Our dual education system has become a benchmark for many countries, as has our dual work-study scheme. And we have a long tradition of applied research: at DACHSER, we partner with Fraunhofer IML in order to jointly develop innovations for logistics. 4. German companies have a great openness and ability to integrate new people. It makes me proud to see how well employees from over 120 nations work together at DACHSER in Germany. 5. The recent protests against political extremism show that we don’t take democratic institutions for granted – and that we will do what is necessary to defend them. Germany’s political stability, the trust in our institutions and processes is highly attractive for foreign investors. Nevertheless, what German companies need is an appropriate and balanced level of bureaucracy to stay competitive and maintain the high level of trust in political institutions. As valuable and well-intentioned as they are, there are regulations such as the #SupplyChainAct, the EU Taxonomy or the #ESG reporting obligation which will further increase the bureaucratic burden. Mastering this additional bureaucracy will be a tough challenge, especially for small and medium-sized companies. All in all, however, growth can only come from optimism. So let’s focus on our strengths as a global business partner. I think we’d all benefit from putting any German angst aside, rolling up our sleeves, and getting to work. It’s a joint mission – for business, politics, and society as a whole.
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#Woman #Thinking & #AI un’alleanza al servizio della Consulenza Finanziaria | Wealth Manager & Private Asset Advisor | Talent Recruiter | EFPA ESG Advisor | Azimut Capital Management SGR S.p.A.
3moInteressante l’interrogativo finale, così come sono condivisibili le riflessioni che lo precedono