Now, Germany is the world’s worst-performing major developed economy, with both the International Monetary Fund and European Union expecting it to shrink this year.
It follows Russia's invasion of Ukraine and the loss of Moscow's cheap natural gas — an unprecedented shock to Germany’s energy-intensive industries, long the manufacturing powerhouse of Europe.
The sudden underperformance by Europe's largest economy has set off a wave of criticism, handwringing and debate about the way forward.
Germany risks “de-industrialisation” as high energy costs and government inaction on other chronic problems threaten to send new factories and high-paying jobs elsewhere, said Christian Kullmann, CEO of major German chemical company Evonik Industries AG.
The loss of cheap gas from Russia played a part, but decisions in the boom years are now being questioned.
www.euronews.com
Germany has suffered more than other western European countries from their embargo on Russian gas, oil and coal imports. Several of its most energy-intensive heavy industry plants have been forced to shut down.
German building firms are going to the wall amid the recession brought on by sanctions on Russia.
Construction costs have soared amid the highest inflation seen in decades, and interest rates have followed — meaning developers want higher profit margins and will pay less for a completed building.
A slump in land values — exacerbated by the industry's problems — has also made projects financially riskier. The annual number of
real estate sales is at its lowest since 2014.
Industry giant the Gerch Group, which had a portfolio of ongoing projects totalling €4 billion ($4.2 billion) in value, filed for insolvency in August 2023, along with the Project Immobilien Group.
Germany has suffered more than other western European countries from their embargo on Russian gas, oil and coal imports. Several of its most energy-intensive heavy industry plants have been forced to shut down.
sputnikglobe.com