Habeck’s economic forecast is bleak. The international press attributes instability and paralysis to the traffic light and fears that Germany will be de-industrialized.
Berlin – The German economy is in the worst slump in recent decades: On Wednesday (October 9th), Economics Minister Robert Habeck (Greens) had to revise the economic forecast for the current year and correct it significantly downwards. The traffic light coalition now expects a decline of 0.2 percent.
This means the German economy will shrink for the second year in a row. The country is a long way from a new, green economic miracle, which Chancellor Olaf Scholz (SPD) had promised in spring 2023. The ongoing German economic downturn is also being followed with concern abroad and has been accompanied by international media, sometimes with alarming words.
International reactions to economic forecast – Habeck “bears responsibility”
The New Zurich newspaper (NZZ) from Switzerland points out that Habeck rightly points to mistakes made by the Merkel government when it comes to the “dilapidated infrastructure” in Germany and the lack of preparation for demographic change – “but he also bears responsibility”. The Swiss paper states that Habeck’s Ministry of Economic Affairs and the entire traffic light have “an erratic, interventionist policy” that is causing “crippling uncertainty”, slowing down investments and paralyzing private consumption.
The fact that Habeck sees a turnaround coming in 2025 – thanks to the traffic light growth initiative – is confirmed by the NZZ seen as a story from the realm of fairy tales: “According to the government forecast, Germany will miraculously find its way out of this valley of tears in the election year of 2025,” writes business correspondent René Höltschi. However, the growth initiative is “not a big success”, a lot of things have not yet been implemented – and a number of things are already being argued about at the traffic lights.
Disputes at traffic lights lead to international reactions – economy “from bad to worse”
The eternal dispute in the traffic light coalition: This sticking point in German government policy is obviously reaching abroad. Berlin’s response to the economic recession is being hampered “by coalition disputes,” writes the US newspaper Politico and primarily refers to the different opinions of the SPD/Greens and FDP on the debt brake.
Politico headlines its reporting on the ongoing recession in Germany as a whole with the words: “Germany’s economy is going from bad to worse.”
Traffic light “notorious for internal power struggles” – International reactions to Habeck’s forecast
The ongoing dispute in the traffic lights is also from the renowned US newspaper Washington Post did not go unnoticed. The government of Scholz, Habeck and others is “notorious for its constant internal power struggles, for example over next year’s budget,” the newspaper writes. And the British one too Financial Times certifies that Germany has “political instability” caused by “constant disputes between the Social Democrats, Liberals and Greens in Chancellor Olaf Scholz’s shaky coalition.”
Fears of “de-industrialization in Europe’s largest economy” due to Habeck’s appearance
In addition, according to them Financial Times, that Germany, once dependent on cheap Russian gas, was hit harder than neighboring European countries by the energy crisis after the start of the Ukraine war. Companies suffered from high labor and energy costs and an excessive tax burden. The fact that large companies are considering relocating their production to other countries raises “fears of deindustrialization in Europe’s largest economy.”
The US news portal also reacted with alarm Bloomberg based in New York on the poor economic data from Germany. “The weakness of the largest member is putting pressure on the entire euro area,” it says.
Habeck corrects economic forecast and complains about a lack of investment in Germany
Robert Habeck explained during his appearance on Wednesday when he presented the economic forecast: “The challenges are greater than we may have admitted to ourselves in recent years, because they are of a structural nature.” Germany has invested too little in infrastructure. “We see this in delayed trains and collapsing bridges, in the lack of digitalization in the administration,” the Green politician said. “We have not done enough to mobilize labor and skilled labor potential.”
In addition, German economic growth has always been based on strong exports. This pillar has become brittle. China is pursuing an aggressive export strategy, and the USA is also increasingly acting in a protectionist manner. According to the economic forecast, Bavaria’s Prime Minister Markus Söder called for the resignation of Vice Chancellor Habeck and Foreign Minister Annalena Baerbock (both Greens). The head of the large German company Kärcher also sees Habeck as no longer suitable for his position as economics minister. (smu/dpa)
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