Podcast “important today”
Bringing up the rear in Europe: Why the recession is hitting Germany particularly hard
In the event of a recession, a well-stocked shopping trolley will no longer be affordable for everyone.
© Fabian Sommer / DPA
Germany was once the powerhouse of Europe and pulled its neighbors along with it. However, the Federal Republic is currently lagging behind in terms of economic upswing. The economic expert Dr. Guido Baldi knows why.
Germany lacks workers – so many that 86 billion euros in economic output are lost each year due to vacancies. At the same time, the Federal Republic slides into a recession, purchasing power falls and inflation rises. In the podcast “important today”, the Swiss macro-economist Dr. Guido Baldi in episode #380 why the German economy is currently suffering particularly: “Germany has a great, solid economy and great medium-sized companies, innovative products. But it also has a vice and for a long time that was cheap natural gas, cheap energy Russia. We broke away from that, to put it bluntly, we were addicted to cheap natural gas. That helped German industry.” And where cheap gas is now missing, German companies are less competitive. Especially those that use a lot of energy in production.
Expensive consequences of the Ukraine war
In an interview with “Today Important” host Michel Abdollahi, Dr. Baldi, what costs are coming to Germany. In August, the economic expert calculated that the Russian war in Ukraine and its consequences could cost Germany around five percent of its economic management: “That’s almost 200 billion euros.” However, the economic expert believes that the high debts that the government is now taking on for the relief packages are correct: “High debts and a long economic crisis at the same time, that is the toxic mixture. But if we incur debts and the money in a crisis like we are now use it to future-proof our economy and get the ecological transformation right – then I’m confident we won’t be in debt.”
Recession is still ongoing, but an end is in sight
For the time being, the forecasts are rather negative. But Dr. Guido Baldi, who works at the German Institute for Economic Research in Berlin, is certain that Germany will emerge from this recession in the foreseeable future: “I do believe that this and the coming winter will be difficult, but after that I’m rather optimistic that the economic upswing will be stronger and times will get better again.”
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