Politico: The German economy is on the edge of a disaster!
Politico reported that Germans no longer ignore the economic deterioration in their country, and have begun to consider it a prominent political issue alongside immigration.
According to the report, Germans are gradually coming to terms with the looming reality of four major economic crises: the exodus of major companies, rapid demographic decline, deteriorating infrastructure, and a lack of innovation.
Politico’s report added that the Germans had long ignored the slow deterioration of their economy, but the real shock came with the news about the possibility of closing Volkswagen factories, in addition to Intel’s announcement of postponing expansion plans in Germany.
The German economy has become the second-biggest issue for voters after immigration, according to an opinion poll, however, the German federal government finds itself in a difficult position to fix the situation due to constitutional restrictions on increasing public debt.
Politico also explained that this situation represents bad news for German Chancellor Olaf Scholz and his three-party coalition, as his popularity was already at its lowest levels even before this crisis, and it is likely that the recent economic conditions won’t help improve his popularity or his chances of survival.
Germany’s economic growth rate during Scholz’s term was only 0.57%, the lowest rate since the founding of the European Union.
For his part, the CEO of Volkswagen, Oliver Blume, expressed his concern about the challenges facing the company due to the decline in Germany’s competitiveness and the desire of competitors to settle in Europe.
The company didn’t rule out closing factories and laying off workers in Germany by July 2025.
Intel also announced the suspension of plans to build a new factory in Magdeburg, in addition to postponing projects in Poland for two years.
On the other hand, the Financial Times reported that Germany is facing a labor shortage crisis in vital sectors, as the unemployment rate rose to 6% this year.
