@@tiglishnobody8750 well Germany is always on the wrong side of its history. IRA is aimed to create green energy for the world but at the same time, ExxonMobil's net profit hits a new record in human history. The majority of cars, commercial jets etc are using petrol.
Not one answer. De-globalization and increased protectionism. Both from China and the US, paired with a pandemic, paired with an offensive war on the doorstep paired with economic struggles in China paired with economic pressure to perform better in the US.
I'll take a comment to mention how the German Green party celebrated the closing of domestic nuclear power plants which were replaced by _gas_ burning power plants that have large carbon dioxide emissions.
It is always ironic when "Greens" promote carbon economy more than conservatives because they fear nuclear energy. I say this as physical chemist doing environmental chemistry research for the US government. Often facepalm when hearing political environmentalists undermining environmental goals due to their love of ideology over actual science.
In Europe, there's a growing sense of neglect towards the younger generation. They face lower salaries, longer work hours, and increased responsibilities while witnessing a surge in billionaires, particularly in countries like Germany. The housing market adds to their woes, as property prices soar, making it difficult to afford homes, let alone start families. To compensate, cheap labor from abroad is often favored, leading to frustration among the youth, who feel betrayed. People aren't inherently racist, but this frustration arises when governments prioritize external labor over addressing domestic issues. It's high time politicians acknowledge and tackle these pressing concerns rather than resorting to distractions. The younger generation deserves meaningful change.
That’s a global phenomenon, not just Europe. Politicians worldwide have increasingly catered to older rich citizens at the expense of the less established youth.
Older gens: worker harder but we are not going to raise wages because we are paranoid about inflation and we need to hoard as munch money as possible. Also older gens: why are younger gens are always mentally exhausting and not having the time for childrensnand housing.
It was never "Strategic Ambiguity" Germany historically aligned with Russia for hundreds of years for control of central, eastern Europe and Atlantic influence.
@@2MinuteHockeyGermany hasn't even _existed_ for hundreds of years. It fought against Russia in both world wars. When exactly was this long period where Germany consistently aligned with Russia?
LOL Prussia and Germany are the same state, they partitioned their Jewish neighbor, Poland for hundreds of years Lenin was funded by the German government to start a civil war in Russia to NOT fight the sneaky Germans WWII was literally started with a German Russian pact@@HeadsFullOfEyeballs
You didn't mention that German electricity prices are some of the highest in Europe, making them also some of the highest in the world for places that attempt to do manufacturing.
True, someone said that Andalusia is actually in a great position to become a manufacturing hub as it could source a lot of very cheap solar energy and it has relatively low wages for EU standards.
Today I tried to get to work, in the city center of Berlin. My Ubahn stop has not been working for 2 years now. I got in the Ersatzverkehr, that leaves me a couple of stations ahead, where I need to get down and take another Ersatz, because the line isnt working there either because of "cable stealing". This brings me 5 more stations forward, where I take the first leg of my Ubahn ride, but because of low maintenance, this train can only ride for 2 stations, before we need to get down and wait for another Ubahn to take us all the way to where I need to go. Germany is a clown world.
Which isn’t really an economic factor. DeutscheBahn trains being known as late is precisely because DB cargo and other freight trains have priority. A passenger train will have to wait and stand by if it’s holding up a freight train. This is also why DB made pretty nice profits last year and before, the cargo business is booming. On the backs of passengers who suffer the consequences. Roads are very well maintained, also because trucks are a major economic factor and need to run efficiently. So no, infrastructure development isn’t an economic but rather social problem, economy has priority
@@ja_u whilst I take your point, bridges collapsing and road infrastructure isn't going to help the economy. Plus infrastructure building is actually beneficial to an economy.
@@2MinuteHockeyIf by "ploy with Russia" you mean "it was much cheaper to buy slightly more Russian gas than to run a small handful of remaining nuclear power plants at a deficit", sure.
It's hard to compete on a global state, especially when the USA is giving massive social benefits to businesses to move operations from Europe to the states. Globalized socialized business benefits and the race to the bottom in the context of corporate benefits is the problem.
The EU is doing the same... its not just simple manufacturing business that is seeing competition. its also investing into new technological ideas and IP that create jobs. Germany hasn't really done that and has been reliant on cheap resources from Russia. Germany is also really bureaucratic in its government. Allot of processes still run on slow manual labor making Germany inefficient and expensive.
A few items should be considered here that have been left out in the analysis: (1) German industrial output is down but not the value-added. So mainly low margin processes were shifted abroad or shut down. It also reflects that the few energy intensive products that also have low margins - like ammonia production - was shut down. But overall Germany has a low dependence on energy prices. The loss in competitiveness mainly comes from higher wages as real wage have grown despite the inflation. (2) There is no evidence whatsoever that for advanced economies a higher share of industry as percent of GDP means more growth or more wealth. In fact it might even be the opposite. The US spent decades in de-industrialisation which is why it depends on imports from Asia and Europe for most of its manufacturing. It did not damage growth as the latter mainly came from high-value services. I also question whether the state-subsidized re-industriasiation of America actually helps them. It will mainly lead to more debt and unsustainable zombie companies that rely on US subsidies. (3) Protectionism has been growing over the last 2 decades in the US. However, the main problem is low demand from China and other emerging markets which is due to their economic crises. (4) The growth in Germnay is low, but so is unemployment. Real wage growth is positive despite the inflation problem. Therefore, the term "crisis" seems overblown.
Unemployment is low because of low birth rates. In 1964 there werre 1,400,000 births in Germany. They are now 60 years old and retired or retiring soon. Now, the birth rate is half that at 700,000. That's the real reason unemployment has fallen in Germany since it peaked in 2005. Many people are now retired, rather than unemployed. But economically there's no difference - they are not working and dependent on the State.
State subsidized reindustrialization is necessary because the world is deglobalizing, and it will eventually be a security concern and not just a financial concern. If illiterate pirates chucking rockets at ships in the Red Sea is causing this much disruption to global trade, imagine actual state sanctioned piracy and the carry on effects to the global economy. The EU needs to wake up and smell the roses, because the global trade that they have become massively dependent on is at a huge risk of either seeing significant reduction or going away entirely
Governments need to subsidize reindustrialization, otherwise corporations will keep chasing the easy money of outsourcing to a country that eventually becomes a rival or a security risk. The world is currently deglobalizing, and it will be a security risk to not have your own industry. Look at what is happening in the red sea right now, and the massive impact a small group is having on international trade. The EU has become too dependent on global trade, and needs to invest in their own yards if they want to remain competitive in an increasingly fragmented world. It's no longer just about low costs or ease of operation, and it never should have been in the first place because people will always choose the easiest and cheapest solution even if it harms them.
@@caezar55 that’s partially true. The birth rates are low now and have fallen - as in basically all developed countries - but the number of people employed kept rising and went from record to record. But there have been quite a lot of movements within. I.e. more women are working but fewer are working full time. Also the average retirement age has risen by a year over the last decade. That unemployment is low is therefore partially demographic but also reflects the positive economic developments between 2000 and 2019. in addition, Germany covers a lot of its employment needs with high levels of immigration. Per capita immigration has been higher than in all G7 economies - maybe with the exception of Canada.
@@foregone_roulette I think it depends on what you consider to be so vital and essential that it cannot be traded. I‘d say that there are some products that are strategically important and should be produced at home. But so far nobody does that: The US I still dependent on Russian uranium for its reactors even two years after the war in Ukraine began, the EU needed to act quickly to become independent of Russian gas. China, the EU and the US are all trade dependent. The EU a bit more as it relies more on importing natural ressources. But e.g. if China wants to sell us solar cells basically for free while 3/4 of the value added and most of the jobs are in Europe, I guess it‘s an acceptable risk. But I get your point. I still don’t see why the US basically subsidizes all sorts of manufacturing in areas were it likely will never have a comparative advantage. I want to maximize value added and productivity with the additional restriction of not outsourcing security risks. What Europe really needs now is more weapons and ammunition production and a more Europe-wide integrated Defence industry. That’s the starting point.
It’s very difficult dealing with deindustrialisation. Here in the UK we have struggled with it for a century. It’s what underwrote Brexit- a vote of despair
The problem is also, that with the deindustrialisation less low skilled people are needed in the country, but the government in Germany still keeps letting millions of immigrants in. There is a documentary, Zombieland, which shows what is happening in the cities, homelessness, drug use, criminal rates through the roof and so on, also home prices go up because of it. It is a mess, mainly home made by the puppets that call themselves politicians. Greetings to the UK.
@@thedailygreatness That’s another question. The point is the parts of the country which voted most heavily for it were the UK equivalent of the US Rust Belt
@@chrimbus71 In areas abandoned by industry those who can leave. Those left behind are often older, less educated and poor. The Brexit vote was largely one between the better educated and the not so well educated although it was led a small group of wealthy people who wish it was 1850. Those people include newspaper owners. They are used to influencing opinion in the UK but are powerless to do so in the EU so they hate it. They imagined that once clear of the EU they could turn Britain into a small government nineteenth state. The problem for them is almost no support for this outside their own very limited circles. Almost no one understands what the EU is or does. Couple that with almost total ignorance of economics and it is not surprising so many people were taken in by the Brexiteers, especially those who are desperate for change
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Germany's deindustrialization seems to be the talk of the town. Just yesterday, Economics Explained and Good Times Bad Times uploaded videos on the subject.
One aspect not mentioned is how for years politicians used large sums of money ro pay off debt while letting infrastructure rot and while underfinancing authoritys. Plus bureaucracy (!)
Germany isn’t in a war, Russia has switched their economy into a war economy. If you seriously compare those you have understood virtually nothing about how this shit works
Germany can shift their industry tot military equipment. That way Europe can become less dependent of America. Trump wants that every European country spends 2%of its GDP on its military. So a lot of money can be made here.
A good idea. Too bad Germany is completely unwilling to pick up that torch and regear their industry for something that can actually survive in future. So long as Chinese subsidies continue, they simply can never compete with them, and I don't think those subsidies are going to end any time soon. The provincial governments of China may be heavily indebted, but the federal government isn't, and has a boatload of foreign currency it can use to support these subsidies.
Military industry is very energy-intensive too, though. The problem for German industry right now is that we're cut off from our cheap Russian energy supply. I guess military equipment is usually so perversely overpriced that the energy cost only makes up a small fraction of the final price, but still.
@@HeadsFullOfEyeballs As you say, military equipment is usually extremely overpriced. As it stands, the EU has need for military equipment, and Germany is best positioned to provide it. If Germany had any sense, it would pivot towards military production, and let other EU members specialise towards other, non-military things. After all, what's the point of the EU, if not to allow these individual countries to specialise, but not pay too high a price for it? In reality, it's the inverse, to support dated industries, mostly, unfortunately.
In terms of manufacturing, China doing so well is really hurting European industry. I know from what my dad has told me being a design engineer here in the UK. It used to be that China made cheap stuff, but it was usually low in quality and prone to breakage. But if a company or whomever wanted something that was reliable, safe and lasted, they would go to a European country. Since China and Europe were serving slightly different needs, they weren’t competing as much. But my dad complained last year to me when he found out a company in China was making a product very similar to what he was working on, but was able to do it much cheaper (likely because of the Labour costs over there). And I expect similar things are now going on with manufacturers in Germany.
Its not the labour cost that is hurting European manufacturers the most its material refining. Nearly all bulk material refining steel, aluminium, silicon, chemicals, rare earths copper etc have been pulled into china by an aggressive ccp effort low cost of energy and low environmental standards. That means they have a massive supply of local material that can can be purchased at or even below cost. This means there manufactures have a significant advantage in finished goods cost. Labour doesnt really come into the sort of highend modern manufacturing germany specialises in. Increasingly however the bulk material and a chemical work is beinging under cut. This can have large effects on local industries as many of the byproducts of these industries are crucial components of others.
China’s share of global manufacturing has been declining for years now. And China has to export a lot more of what it produces than developed countries since China’s own domestic consumption is already low and declining even further
Highest taxes, not true, look at basically whole Scandinavia. Bureaucracy on the other hand is heavy here, but does it really play a big role? I'd like to see some data on this.
Germany, and in fact Europe, totally missed the era of digitalization and IT. Better energy access won't change the fact that US/Asians have a massive tech advantage
That's true and it is an area that EU countries need to get to grips with, high-tech is the future and the EU countries have been missing the boat on that. But they are more than capable of getting back in the game, South Korea is a small economy but very high-tech, the EU economy is a lot bigger than them, it's high skilled and has a big population, it's just a matter of incentive and right government policies to make it happen, and I think it will happen as high-tech reduces other industries, like manufacturing could be replaced by robotics and A.I. in the sense that most manufacturing is done much closer to where the goods are being sold, meaning it wouldn't be good for exports, which is what Germany is, but Germany is also in a good position to be the Silicon Valley of the EU if they pushed hard on that.
@@paul1979uk2000 The EU is leading in some parts of high-tech, its just not the sexy parts. the Machines and chemicals fueling the next industrial revolution all come from Europe... Nvidia uses European machines and silicon to produce AI chips. Also Robots and industrial software are very strong industries in Europe. SAP is just alot less sexy than google.
Germany yes, other european countries not so much, yes we still aren´t on a asian level but china,india ect leapfrogged, in sweden almost no one uses money anymore, in my country when you go to some public and private services a lot of times they tell you to go online, now i can tell you why it seems otherwise and the awnser is simple old people we have too many of them and that skew statistics, also you know who own most companies you guess it old people that are relentant to invest because they already ´made it´in life and have only the fourth or sixth grade so they don´t understand the modern world.´ EMPSA - European Mobile Payment Systems Association if we reach interoperability between all the systems we can rival upi,alipay ect Most of us don´t love karaoke thats why germans didnt remember asians really love karaoke and that´s why google(usa) will take over car inforntainment systems
LNG is not cheap enough to make production in Germany as competitive as it was with Russian gas. Germany has essentially 3 options to recover it’s competitive advantage: 1. nuclear power. Takes about 20 years to fix the problem. 2. renewables. Takes about 30 years in total, but every wind turbine reduces the problem, so it would be only half as severe after half the time, as opposed to nuclear power, which would suddenly fix the problem at the end of the 20 years, but not help to reduce it before. 3. return to Russian gas. Building Nordstream 3 would take about 2 1/2 years, and would be the by far fastest way to recover German economy, but it would also require pretty radical and risky changes in Germany’s foreign policy. It boils down to the renewables being Plan A, Nordstream 3 being plan B in case the renewables don’t work well enough and fast enough and the situation becomes desperate enough to take the risks involved, and nuclear power being a mock alternative wielded by conservative politicians to pretend they have a better alternative.
The problem is that alot of german parties dont want to take on debt, even to it would make economic sense. The Idea of "schwarze Null" (zero state deficit) is in it self flawed but its a fiscally conservative talkingpoint in politics and alot of people belive in it because they dont understand it
@@hendrxYou think that Germany is so incompetent that it cannot be trusted with short-term debt as a tool to boost its economy? Even more corrupt countries can do it sufficiently to make sense in economic terms. Even China can and it does it all the time!
@@hendrxExcept you're _supposed_ to spend money you don't have, as a government, during a recession. It's called anticyclic fiscal policy. You take on debt for stimulus to quickly get out of a recession, then pay it off when the economy is running again. The problem is that democratic governments are reluctant to save while things are going well (it's much more popular with voters to spend the extra money on nice stuff), so the second part of the cycle tends to not happen.
@@HeadsFullOfEyeballs "during a recession" That is the thing - the black zero is a good concept not to be caught with the pants down, like in the financial crisis 2008. But the purpose of not being caught pants down cannot be just to maintain that black zero. It is not that the second part of the cycle isn't happen. With that philosophy it is really just the second part of that cycle happening all the time.
The thing is many people cannot survive in rich countries. the more expensive the rich countries' living costs, the lessor people including some most talented people can survive there.
@@MSDGroup-ez6zk The solution to that is heavy industrialization and automation which is the best way to lower the cost of goods and services. However, people still need to be employed.
Here's a solution. STOP depending on exports and imports. Develop policies towards a self-contained economy. You don't have to "grow" all the time. Normal people just want to live with their basic needs accounted for. Ensure a self contained economy with strong supply chains for basic necessities. Everything else will fall into place.
Issues with Germany are from every way. They basically took these upon themselves. Let me explain. 1. Skilled immigration, many Western countries are dependent on skilled immigration as their native population is getting old but instead of allowing skilled immigrants they allowed unskilled immigrants from middle East and Africa which not only caused issue at social level as they don't integrate but also bacame a tax burden. 2. Skill retention, both skilled Germans and few immigrants who works in Germany leavs as the income is low compared to industry and taxes are very high. 3. Integration issues, Germany cry a lot about they need skilled people but everywhere you go they ask for C1 German. To be honest German is not a widely spoken language outside DACH region and many people don't see learning such a hard language at that age. Add extreme paperwork at every step of your life made it not a shining place for people with options to settle in. 4. Wrong geopolitical moves, Germany depends on cheap energy but instead of staying neutral they basically cut it's ties with Russia without finding cheaper alternatives plus their issues with nuclear they basically damaged theirs own industry. If Germany again want's to lead they need to fix these issues. Only allow skilled immigrants and kick those out who doesn't contribute to the country, find cheaper solution or pressure both parties at Ukraine war to stop the war , reduce paperwork for everything and make more English speaking jobs. Otherwise the day of other competitors from South Asia, Latin America passing it isn't fair away.
You're already wrong on point 1. We don't need any migrants. What we need is native Europeans to multiply again. End of story. Thus you are also wrong about point 3. All that said, you are correct on point 2 and 4. But spare me with your migration.
As a German, I no longer want to work so much just to say that we are the economic powerhouse of Europe. Besides working, there is a life to live, and we only have this one life. Blessed be the 4-day working week that I have had for 2 years now.
Ireland did pay off 42% on your and France's central bank debt in exchange for a dreadful work-life balance, bullshit jobs and a bullshit economy, among the highest prices in the EU and a depressing renting/housing/homelessness crisis.
Germany has the lowest hours worked per person per year in the entire world lol. Saying we are currently working so much for our status of economic powerhouse is ridiculous. The work for that status was done in the 1950s to 1990s.
@@dejanbusse805it depends also on how you count work hours German work hours tend to be a lot more efficiently and accurately measured than, lets say, greek work hours
@@dejanbusse805When you were around in the world and know how most other countries „work“, you would realize that the Germans really indeed *work* in the work hours and don’t just appear working in a defined space. A classic issue of such like Japan that glorify one of the most toxic work cultures there is.
As I posted on another YT video on this very topic: "Could it be that putting extreme economic pressures on your own native-born citizens, dismantling your nuclear power industry, not requiring the machinery of the alternative-energy industry to be manufactured in your own country or your fellow European Union countries, not properly assisting your own families with children and flooding your country with illegal aliens who never should have been there in the first place paid for by your own taxpayers were all colossal mistakes?"
I am sure that rising energy costs due to the failed economic and military war on Russia would affect the competitiveness of German industry, which has been the base of its economy
EU really needs its own "Made in EU" campaign. We need protectionism as a tool to maintain our industries' competitiveness against those countries that have higher emissions and we need to be proactive in setting new tariffs even against the United States which has double per capita emissions compared to the EU. We still should not abandon globalization completely, but strong tariff policies are needed as the world is getting more polarized and many countries want to be free-riders in the global effort to preserve our planet for future generations. It's not only about CO2, there are other things to consider like other gas emissions, microplastics, biodiversity, and outsourcing of Western consumers emissions to poorer places like China and Southeast Asia. Also, Germany should get rid of its dumb "no debt" policy which has zero economic sense. Instead of starving themself, they should look at what the US is doing with its debt-driven growth model that has allowed them to stay the number one economy in the West.
The EU has had protectionist policies. That's how Germany was able to maintain a consistent trade surplus. In any type of true free market, it would be impossible to maintain a trade surplus for as long as Germany or China have been. Now the rest of the world is catching on to the idea.
Germany's divestment from nuclear power was decided under the preceding conservative government, not by the Greens. Also, France's nuclear power plants are in terrible shape and keep failing during summer, to the point that France has had to regularly buy electricity from Germany, so I don't know about "⚡⚡⚡".
@@derechtepurkus They literally supported the decision and would have done it sooner. Yes the "Conservatives" ( Merkel Era wasn't really conservative let's be honest here ) It was done but atleast they realise the mistake while the Current Coalition is still defending it and say it was a good choice.
I'm living here and I have only one dream: relocate to any other developed country with my family. I can't stress enough how much I hate this crazy place
Klar, weil die Probleme von Deutschland auch fundamental andere sind und woanders nicht auch Probleme existieren. Gerade hinsichtlich crazy, puh, glaube dir ist die politische Stabilität in Deutschland absolut nicht bewusst und wie vermessen deine Einschätzung tatsächlich ist. Guck doch mal bitte nach was denn aktuell noch so alls als vollständige Demokratie gilt, gibt dafür ja den democracy Index. Da wirst du schnell bemerken, die Auswahl der Länder ist sehr gering. Ich verstehe ja Kritik aber dieses komische narrativ des ach so schlimmen Deutschlands ist halt so insane, wenn gleich verbreitet unter Menschen die leider nicht mal wirklich die nationale Politik durchschauen, geschweige denn etwas aus anderen Ländern mitbekommen.
Germany is one the better countries in the eu, are you going to the usa or to the nordics Whats so bad in germany compared to other developed country? Or are you going to do a usa and uk style mo were they go live in poorer developed or developing countries while earning a income from their home country? they even prefer the fancy word of expat instead of the word immigrants 🤣
Germany can always realize, reconcile its books, its account balance, its approach to businesses and economic activities. Credikt appliccaccion, warranti. Calidad exceptionale, Germane.
@@DieGurke_ Indeed it was ready, but opening it wouldn't solve much though - remember that pipeline gas wasn't sanctioned, Russia simply reduced the gas flow for blackmail reasons and absurdly increased the price with that. The peak gas price occured in August 2022, while the NordStream explosion was a month and a half after. Also that claim about America is BS for now.
@@diogorodrigues747 Yes, but in ensure Germany would not back out. In fact, int ensure Germany will have to buy USA LNG,. which costs 4x times more. In fatc, let's say teh AFD gets to power, and reverse all teh sanctions etc, they will not have Nordstrem 2 available.
whatever US does, the only option it's decoupling from China. Dependency on them (hoping trade would make them more "democratic") and Russia (who the hell attacks their biggest customers' allies) were understandable but big mistakes with the benefit of the hindsight
2014 would already have been hindsight. In 2022 It was just pure idiocy. And that parade of imbeciles causing it in the first place will be very likely reelected.
No it's the opposite. The US has sunk the German economy. The US started the trade war with china and forced Germany off Russian oil. The German economy was reliant on Chinese exports and Russian oil.
There are other issues. Electricity prices in Germany are rising due to the the dumb decession to shutdown all nuclear power plants. That means Germany must import expensive power from other countries. Over Regulations and high taxes on top.
@@MaxMustermann-vu8ir Because of government subsidies. And not everywhere. There are costs called network charges, which rise with every wind or solarfarm.
Maybe Germany is failing because they spent last 30 years pumping their cooperation with Russia over heads of its eastern allies like Czech republic, Poland and Baltics. Now Russia nationalised their factories and such, materials are no longer that cheap and accessible and all of the sudden industry is in trouble. Mildly shocking, really.
Volkswagen bought up Skoda only to fail in near future. This way Czech industry got vandalised, and brand will eventually leave Europe, just because someone was too greedy. Such enormous mismanagement of resources is a tragedy to entire continent.
Germany is failing because the US humiliated Russia so much that they attacked Ukraine. When we get a right wing government in Germany we just ally up again with Russia and China and we get the energy our economy needs to run. US-American think tanks have inflitrated German geopolitics. That will be over at some point. And when Germany freed itself from American shackles we lead Europe together with France against the Anglo-American empire!
"Now Russia nationalised their factories and such, materials are no longer that cheap and accessible and all of the sudden industry is in trouble." This is not the problem. Sanctions and absolutely no access to (cheap) Russian resources are. Not just Russian gas and oil, but metals, chemicals, coal too, just to name a few.
Yes, germany should have cooperated with the 5million large baltic tigers, czechs and poles to get some nail painting services, more toilet cleaners, street sweepers and sex workers. are you serious? These countries already have germany as the largest trade partners already. germanys aggressive economic policy where it, for example, completely bought out, bankrupted and outcompeted the latvian industry that doesnt exist anymore after its accession to the eu (im from there) and picked up the workers to work in its german factories and toilets. industry needs cheap raw materials to be sustainable - which the germans denied themselves. im sure, however, that if germany had cooperated with estonia, instead of russia, it could have gotten those cheap raw materials. lmao. i sincerely hope germany becomes a banana republic, its got half of africa there now so with the industry moving to america its a just a question of time.
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one aspect which has an impact is the decline of German automotive design quality. VW and BMW have been releasing notoriously uglier models for years, and show no signs of reversing the trend.
They also bet against electric cars, because the government encouraged them. Then again, it probably does not matter, as Chine will have cheaper models anyway due to their access to the resources, just like when they took over the solar industry.
@@Schmidtelpunkt _"They also bet against electric cars, because the government encouraged them."_ This is kind of backwards, actually. German car manufacturers were afraid to transition to electric vehicles, because all their expertise was in traditional engines. So they lobbied the government to support internal combustion cars.
@@HeadsFullOfEyeballsTrue. The encouragement was giving in to the lobbying. It is not like that government back then took any active action. They just created the appearance as if it could go on like it was forever. So ironically a Green government would probably have saved the German car industry.
@@HeadsFullOfEyeballsWhich trades short term teem vs long term. The paradigm shift from ICE to VE is here and accelerating. Either German car industry catches up and manages to transform more quickly - or it will relinquish more market share for cars to Tesla and China. Tesla was always focused on EVs so has no legacy manufacturing to worry about (and could improve it's car building consistency during a time when it has hardly any competition for effective EVs). And China sees this as an opportunity. It's car manufacturers would have always had a hard time to compete with European competence in building the best ICE motors and cars on that basis. But the changeover to EVs with its new focus on batteries and electrical motors vs 100+ years of optimizing ICE motors is a rare chance to compete on a much more level playing field (and China still has a relative advantage on labor costs).
The analysis is incomplete and even ignorant, disregarding available and publicized data: Germany's real crisis is the retirement of its most hardworking generation, set to occur in the next 10 or 20 years, without effective replacement. Efforts to attract skilled workers have been made, but skilled workers often do not remain in the country (as addressed in several available analyses), and the country needs them in the millions, a feat unlikely to be achieved. There is no way to avoid a demographic crisis, and this will not only impact the already strained pension system (research its current problems online) but also any plans for the future that one may aspire to have. No children equals no future (and no possibility of economic plans of any sort). Even if we were to return to pre-pandemic conditions, with cheap energy and willing buyers from major countries, the demographic crisis would still loom. However, we don't have those conditions, and on top of that, we face new challenges. It was only a matter of time before Chinese products evolved to have acceptable quality in certain markets, and America would also seek to regain control over its own production to be less vulnerable to the dictates of other countries. The demographic crisis is not just a German problem; it affects all developed countries. However, for cultural reasons, it is still being ignored, as facing it would require admitting the failure of incredibly ignorant ideologies and philosophies that are still upheld that led to decisions that now cannot be rectified without understanding basic biological and sociological realities, which have become politically taboo. Hence, the consequences.
Interesting and well written comment. I find that I agree with many of your points. But I do have a question. "as facing it would require admitting the failure of incredibly ignorant ideologies and philosophies that are still upheld "....What are these ideologies and philosophies you are referring to? And I don't ask in a condescending tone. I am genuinely curious and would like to learn more.
@@tobiasbremner9623 It would be a little ample to respond, but I suspect you will get the idea: the ideologies and philosophies that propagated the massive incorporation of women into the workforce as a part of a "solution" for the so-feared "demographic explosion" of old times (you can even watch old movies like Soylent Green with the theme) and the push to make women's goals equal to that of men. By the way, it was not a baseless problem; the problem existed. The pill and the ability to control natality made it way more possible. What they didn't know is that "the solution" would be so efficient that one day it would end up on the other side of the spectrum, with a negative birth rate. Other changes complicated the issue: massive migration towards the cities (urban people have less children because their needs are bigger and they are costlier than in rural areas) and the abandonment of traditional values, each element (and there are many) were on step down the family shrinkage. In the specific case of Germany, work ethics came first and foremost, what put the country on the top list of those who would face such problems. In the moment, it felt great because you multiplied the workforce, shrank the need for children's care, and so on and so forth, but it was a ticking bomb. Now, many women (and men) even idealize never having a family or children (whatever the reason, and they have plenty). The state coming to the rescue on questions that in the old times were family assurances (like what happens in poor countries where families are still huge, that is, the children are those who will take care of their parents when old) weakened the idea that there was some value in having and raising (and loving and whatnot) children. Western people are crazy for pets and animals though, so the instinct is not lost, it's diverted... as they say "my babies" to their cats and dogs...
@@tobiasbremner9623one such "ideology" is the current stance of the german government on migration since 2015 as they invited anyone who wants to come without properly integrating them into the workforce and culture, but at least as of late thats being reconsiderd. Additionally, the reduction in amenities that support building a family and/or having children in the first place like kindergartens, nannies, teachers for schools and medical facilities that have been severly reduced by the current minister of health. There are many issues thats germany is facing currently and the current government is not properly adressing even one of them, wasting funds on a war that is none and environmental accomodation that leads nowhere. You could write books about the shortcomings, honestly.
@@magnvss There's nothing inherently wrong with moving women into the work place, and having equal rights to men. HOWEVER, to do so without also providing the social support for families to make up for the fact that both parents are working means that such a policy will lead to fewer families being created (and therefore a much smaller next generation). This is the case in the UK, where there is some of the lowest levels of support for childcare in Europe. As a result the native British population (by which I mean all races, religions and ethnicities that make up native-born Britons. Not just White British.) is falling steeply, with only high levels of immigration keeping the books balanced. Naturally, this leads to a great deal of resentment, as successive governments and economists have hailed immigration as the only solution to the demographic crisis, rather than trying to address the true cost of child-rearing, which has been placed squarely on the shoulders of the parents. In this case, you can see that removing women from work would actually have an adverse effect, as parents would have half the income to support their children (so even fewer women would have kids). In the past, families relied upon their wider members (grandparents, siblings and friends) to help raise children when the parents aren't around. However, (in the UK at least), entry level work is often centralised to the capital, London, leading to much of the younger generation having to leave home and live in London, where there is no support network. The cost of living is much higher in London as well. All in all, the current UK business model is set up to inadvertently punish large, young families. As a result, many of the millennial generation are putting off having children until they are much older (which will lead to fertility problems and a much smaller replacement generation).
@@solsunman383 You are attributing statements to me that I never made, so it would be quite complex to engage in any meaningful exchange if you are attributing words to me that I never wrote. Yes, moving women into the workforce has consequences, especially if they are young and before they have started families, as this delays the time and opportunity they could dedicate to forming families, as demonstrated by numerous studies. Biology still exists, regardless of rights. Equal rights have nothing to do with the consequences of exercising those rights on a society: hypothetically, everyone in the West could stop having children, but that doesn't mean that such action would result in positive outcomes. Of course, once you integrate women into the workforce, you are ensnared: initially, it may feel like having two full incomes, allowing many people to afford their first home, etc. However, over time, the relative purchasing power of such wages diminishes, causing this initial advantage to disappear. Thus, we are left with the worst of both worlds: few children (which are necessary for economic growth, supporting pensions, sustaining the system, etc.) and individuals forced to struggle, as a single wage is insufficient. Nevertheless, studies show that economics alone do not explain low birth rates: in all countries with negative birth rates (less than 2.1 per woman), wealthy people within those same countries exhibit similar birth rates. If economics were the sole reason for low birth rates, economically well-off individuals would have more children, given their access to various resources. In different countries where various options have been tried, from the wealthiest (Switzerland, Sweden, Luxembourg, etc.) to the most modest, no incentives provided to potential parents have resulted in a substantial increase in birth rates. There may be a slight improvement for a while, but then rates fall back to previous or even worse levels. Nowadays, not having children is idealized by many, irrespective of economic factors and other considerations. Are there exceptions? Yes, there are (some smaller groups that challenge the norm, even among developed countries), but discussing them would require a deeper understanding of certain cultural dynamics, which you may find challenging to assess
If only Germany moved forward with German geothermal electricity more aggressively, the way China moved forward with solar. In 2023, China installed as more solar than the USA has done in its entire history. Germany is well-suited to advanced deep geothermal electricity generation (and unrelated ground source thermal heating, too). There is no reason for Germany to rely on external energy of any sort other than the economic efficiency of trading on demand geothermal electricity for intermittent but slightly cheaper wind and solar.
It doesn't make sense for Germany to maintain its manufacturing industry, given that its population is aging and has higher labor costs but without stable cheap energy. Germany should learn from Luxembourg or the UK in transitioning itself into a financial-driven economy.
And how it's going in the UK. The country has been in the decline, overpriced, too reliant on financial services companies based in one city and dirty money coming from the third world oligarchs and cronies.
German exports are almost at an all time high, car production has also significantly increased and energy prices are lower than before the invasion of Ukraine (and I can give sources for all of this). So where exactly is this supposed deindustrialisation?
Numbers don't lie. A lot of companies left for all sorts of reasons (energy, labour costs, taxes and bureaucracy). Also, energy for large companies copy spot prices and they are still much higher (over 50%) than pre-invasion. This industry also does not make decisions based on "now", Germany is expected to have severe energy cost disadvantage compared to USA/China/India and it will get worse as emission allowances for industries in EU are decreased every year. Things are getting worse quickly, but that does not mean "over night". It will take a couple of years until German households will see the full effects of this change.
@@MathewLewit thats literally my point though, numbers dont lie. So where are the numbers which prove that Germany is deindustrialising? I already gave 3 numbers which disprove the deindustrialisation narrative. Even crude steel production, which "everyone" said would collapse, is stable (and technically speaking even more profitable than before according to the German steel guild, 2022 was even a new record WRT sales revenue).
This post is presenting Germany as some sort of economic basket case but it is the third largest economy in the wotld with a gdp of $4.5 trillion.Its debt to gdp ratio is 64 %with exports in 2023 vslued at $1.64 trillion with a trade surplus of $210 billion. Their manufacturing industries produce some of the most respected brands in the world.Given the choice of buying a prestige car brand most customers would opt for Munich over Detroit .Germany is a member of the EU, its Customs Union ,Single Market of 449 million.Germany has faced challenges in its recent history such as reunification. Other G7 countries slso face similar challenges but have less leeway to overcome them.
Chinas strategy was propably always build on the idea, to reduce imports from nations such as Germany in the future. They brought all of this stuff for decades, made companies invest in China and share their knowledge with Chinese competitors and then wanted to make all of this stuff themselves in the future, by copying it. It was just a matter of time, when China would start to ramp this up. Now it happened. It will be hard to turn this around, as it was propably not part of Chinas long-term plans.
Yeah, well... Germany has made quite a few very poor decisions in recent years. Ukraine, for example. And the EU... what a dumpster fire that is... Whining about China isn't helpful.
The Nr 1 reason for the economic decline is ridiculously high costs because of high taxes and self-made inflation; followed closely by Nr. 2 extreme bureaucracy.
How to ruin your manufacturing base ( A German guide ) 1. Rely completely on russia for its energy 2. Have to cut of russian energy because of the war in ukraine 3. Turn of all nuclear power plants 4. Turn coal plants back on to keep the lights on 5. Profit?
@@Daniel-ts1yn Actually they just added more runtime. The shut down had been decided way earlier and the companies let their certifications run out and already organized the process of switching them off. Driving on sight, you know...
Germany does not have the workforce to maintain its industrial output levels. And the EU markets are shrinking as other EU nations are aging out as well. The loss of cheap Russian gas is accelerating the inevitable decline. Denying demographic trends is childish and unconvincing.
Since Germany is no longer getting the inexpensive piped gas from russia and taking in mostly expensive liquified gas delivered by ships, this has a HUGE impact on comeptitivesness (pricewise) of German export products. Gas or other fuels have an amplified effect on economy of any country as they are drivers of many other expenses. Additional pressures may come to German car industry since China is subsidizing its electric car productions and it is VERY busy buying and contracting the mined material needed for electric car batteries since China wants to sell expensive batteries to other countries and it wants to establish a near monopoly on mined material that are and will be used in all kinds of car batteries. So, even if VW switches to production of more electric cars, VW will have to buy the batteries or materials required to manufacture batteris from China. Time for WTC t step in and contain Chinese subsidies and monopoly actions.
I was a bit baffled by his comment that Germany’s energy prices are low. If they are deindustralializing, a major contributor to that would be the higher energy prices from importing LNG.
Basically. German economic policy was wildly stupid, and demanded easiness over an actual hard-earned economy, by relying on such unreliable figures. This is a hole they dug themselves, with their reliance on dictatorships, their utter lack of innovative spirit, and the general indolence of their society.
I'd like to critizise this video as it once again uses "economic growth" as the goal, never questioning that ever needing increase of consumption and production. Germany has been trying to reduce its carbon footprint and becoming more environmentally friendly. Environmental Protection doesnt work with unchecked growth and capitalistic exploitation. At some point, one might have to ask if economic downturn is really bad (for the planet, and society as a whole) or if it is a necessery step in re-learning to live more *with* the planet, rather than abusing it.
The german E- car industry is heavily evolving, some former non E-car brands even want to completely swap to the electronic version in the near future, while leading the autonomic driving level with mercedes benz and BMW
It's a shame for Germany, I love my vw but with the prices going up significantly, I'll have to look to cheaper manufacturers if I want to keep electric.
Meanwhile Estimates are that the German Economy has become the Third Largest in the World this Year overtaking Japan.... And Germany is not on the "Brink" of a Recession. It is already in Recession. But the Recession is Minimal and not able to Outweigh the Growth inbetween Covid and Ukraine. And its already Expected to go back to growing. While this Growth is likely smaller than Originally Expected. The Real Growth is still massive because of how Strong Germany already is.
Current economic model is completely unsustainable, to put it simply, the best way to have a strong economy is having a strong internal market and not be dependent on imports and exports but, the way the market is set up you need an impoverished working class to be able to be competitive and poor workers do not spend the necessary money to sustain an internal market.
As a German, I would add two more reasons for the current crisis: 1. The pathetic german government. It's a coalition of 3 parties that basically hate each other, making it the weakest and least stable government post-WW2. Putin started his war just a few months after the german government was formed. A coincidence? 2. The majority of the population is stuck in a comfort zone. Germany was highly successful for decades and everybody got used to it. Problem #1 could be solved by the end of next year. As for problem #2, I'm not so sure.
*Here's an "Explain Like I'm Five" version of the abstract*, focusing on why Germany's strong economy is having problems: *Germany's Trouble* * *Germany is like the best toymaker in the neighborhood.* They sell lots of cool stuff all over the world. * *But things are getting harder.* Some countries are making their own toys now, so they don't buy as much from Germany. * *Also, Germany's toy factories need special power to run.* They used to get this power from a neighbor, but that neighbor isn't sharing anymore. * *Now, Germany's toymakers are worried.* They don't know if they can keep making as many toys, and that makes people sad. *Can They Get Better?* * *Maybe!* If the special power gets cheaper, Germany's factories might work better again. * *The toymakers might need to find new friends to play with.* That way, they can sell toys even if some old friends don't want to buy them. * *The big bosses in Germany are trying to help.* They want to build new kinds of toy factories that are extra awesome. *Important!* The world is a big place, and sometimes things get messy. Germany is facing some tough challenges, but they're working on figuring it out. *Abstract* This video examines the recent decline of Germany's industrial economy and explores potential remedies. Once a manufacturing powerhouse, Germany faces setbacks due to factors including: * *Protectionism:* Increased protectionism in both the US (e.g., the Inflation Reduction Act) and China (e.g., Made in China policy) has hindered German exports and investment. * *Declining Chinese Demand:* China's economic slowdown has reduced demand for German goods, impacting Germany's export-driven economy. * *Energy Crisis:* Germany's reliance on Russian gas, now disrupted, has harmed its industrial competitiveness and investment climate. *Can Germany Recover?* Germany's economic recovery hinges on: * *Stable Energy Prices:* Current low European energy prices, if sustained, could bolster German industry competitiveness. * *US-China Relations:* A de-escalation of the trade war between the US and China would benefit German exports. *Government Action* Germany's government could drive recovery through: * *Targeted Industrial Support:* Investments like those securing Intel and TSMC plants in Germany help develop strategic industries. * *Clear China Policy:* Germany must balance the risks of decoupling from China with the benefits of maintaining market access, a complex dilemma. *Let's be clear:* the global economic landscape is uncertain. This video highlights Germany's struggles as a case study in how international trade frictions and energy dependence can undermine even the most robust industrial economies. i used gemini
I'm missing the mention of the forced green transition. They decided to shut down all of their nuclear power plants, despite Europe being energy poor was a known fact. Lack of natural gas wouldn't be as big issue as it is if the pointless shut downs didn't happen.
It's missing because it's simply not a factor. it's overall impact was is not as much as people think. Nuclear energy, at it's peak was never more than 16% of the total energy supply in Germany. Fossil fuel has always been the backbone. Even in a Germany that DIDN'T exit nuclear power, exiting Russian gas would have been no less devastating. Green transition already has fully replaced what little nuclear production there was and then some. In fact it ended up being a GDP growth driver (until the conservative and Neo-Liberals stopped government investments there and killed a million jobs and gave the entire Solar industry to China). Additionally, guess where Germany got the Uranium for it's nuclear reactors from? It was Russia. So even in a "Germany remains nuclear" scenario Germany would STILL be energy dependent on Putin. Also gas is used for production as a resource chemical and for direct heating, neither of which nuclear will help you. (Germany only has very low amounts of electrical heating installed)
Germany has been transitioning away from nuclear power for decades, though. It peaked at ~30% of the total electricity produced in the early 2000s and has been declining ever since.
@@HeadsFullOfEyeballs Germany is transitioning away since the Fukushima event, it was the turning point where the greens won this battle over Merkel (who previously supported nuclear power). The results: coal insdustry barely shrinked, gas dependency (from Russia) and ironically nuclear dependency (from France) grew, while the new green energy basically covered the surplus energy consumption over the decade.
@@lydon5595This isn't true, Germany had been using less and less nuclear power for about a decade before the Fukushima disaster. Fukushima just made nuclear power (even more) unpopular with the general public, so Merkel decided to throw them a bone and get rid of that basically irrelevant part of the German power grid. And France's nuclear power plants are so unreliable that they have to regularly import electricity from Germany.
Protectionism doesn’t apply only to USA and China. The effects of the sanctions on Russia are virtually indistinguishable from the effects of protectionism, with basically only difference being that it’s not Russia itself who has the power to change that externally induced protectionist policies. All the other effects on Russian economy are basically the same as with protectionism, and likely to lead to the same long term developments. Although, strictly speaking, Russia doesn’t have the power to stop the externally induced protectionism, but they have the power to prolong it, by being more aggressive in the war in case the western countries consider to end the sanctions.
Hearing “The IRA’s impact on European industry” is wild without proper context 😂
Yep, it means a completely different thing to me
How did IRA that based in Ireland manage impact Europe? I mean I kind impressed of their capabilities /S
How to fix the German economy? Learn its history. Germany is always on the wrong side of its history.
I can’t believe the Irish did it again
@@tiglishnobody8750 well Germany is always on the wrong side of its history.
IRA is aimed to create green energy for the world but at the same time, ExxonMobil's net profit hits a new record in human history. The majority of cars, commercial jets etc are using petrol.
5 reasons
Energy, energy, energy, energy, energy.
You know something is wrong when you have a simple answer. And obv. that's not the only problem or even the biggest.
Not one answer. De-globalization and increased protectionism. Both from China and the US, paired with a pandemic, paired with an offensive war on the doorstep paired with economic struggles in China paired with economic pressure to perform better in the US.
china,china
Mushroom! Mushroom!
Don't forget Tax rate and bureaucracy
I'll take a comment to mention how the German Green party celebrated the closing of domestic nuclear power plants which were replaced by _gas_ burning power plants that have large carbon dioxide emissions.
Yup, nothing more to add.
Yep, greens are destruction of Germany. How people still favour them is beyond me
When you are so paranoid of nuclear technology, that you trust Russia and its gas exports more than your own nuclear engineers to run a power plant.
What type of backwards ass thinking is that?!
It is always ironic when "Greens" promote carbon economy more than conservatives because they fear nuclear energy. I say this as physical chemist doing environmental chemistry research for the US government. Often facepalm when hearing political environmentalists undermining environmental goals due to their love of ideology over actual science.
In Europe, there's a growing sense of neglect towards the younger generation. They face lower salaries, longer work hours, and increased responsibilities while witnessing a surge in billionaires, particularly in countries like Germany.
The housing market adds to their woes, as property prices soar, making it difficult to afford homes, let alone start families. To compensate, cheap labor from abroad is often favored, leading to frustration among the youth, who feel betrayed.
People aren't inherently racist, but this frustration arises when governments prioritize external labor over addressing domestic issues. It's high time politicians acknowledge and tackle these pressing concerns rather than resorting to distractions. The younger generation deserves meaningful change.
This is why the far right and socialist parties are more popular with the youth.
That’s a global phenomenon, not just Europe. Politicians worldwide have increasingly catered to older rich citizens at the expense of the less established youth.
it has to also do with demographics, since elderly people want high pensions and often have way more capital than younger people.
until the Baby Boomers depart and take their huge cohort of votes with them there is little hope for the 'younger generations'
Older gens: worker harder but we are not going to raise wages because we are paranoid about inflation and we need to hoard as munch money as possible.
Also older gens: why are younger gens are always mentally exhausting and not having the time for childrensnand housing.
As a German I must say My soul died as he said Deutsche Qualität
Same and I'm not a German
A simple Google translate pronounce click would make it way different
Germans always with the superficial details
@@cesruhf2605 Americans / British always horribly butcher even the most simple foreign words, they don't even try it seems.
Qualität kommt von Qual. Have you been tortured enough today?
bots dont have hearts fuck off "user-uk...."
It seems "Strategic Ambiguity" isn't an economic policy.
Well no. It's a strategic policy.
It was never "Strategic Ambiguity"
Germany historically aligned with Russia for hundreds of years for control of central, eastern Europe and Atlantic influence.
@@2MinuteHockeyGermany hasn't even _existed_ for hundreds of years. It fought against Russia in both world wars. When exactly was this long period where Germany consistently aligned with Russia?
LOL Prussia and Germany are the same state, they partitioned their Jewish neighbor, Poland for hundreds of years
Lenin was funded by the German government to start a civil war in Russia to NOT fight the sneaky Germans
WWII was literally started with a German Russian pact@@HeadsFullOfEyeballs
@@HeadsFullOfEyeballsGermany as a region is much older than Germany as a nation state. Don't make a fool out of yourself
Slogans and ideology over pragmatism.
You didn't mention that German electricity prices are some of the highest in Europe, making them also some of the highest in the world for places that attempt to do manufacturing.
not really anymore a lot of EU countries have high prices comparable to germany
@@sascha5724 I just watched a Good Times - Bad Times video that disagreed with that. If you have a source I'd like to review it.
How to fix the German economy? Learn its history. Germany is always on the wrong side of its history.
@@richdobbs6595 Ok, I'm confused, I've tried to write a comment twice now with links but they are deleted, probably because of the links
True, someone said that Andalusia is actually in a great position to become a manufacturing hub as it could source a lot of very cheap solar energy and it has relatively low wages for EU standards.
You could also add a lack of infrastructure development. With bridges, road and trains becoming worse and worse.
Today I tried to get to work, in the city center of Berlin.
My Ubahn stop has not been working for 2 years now. I got in the Ersatzverkehr, that leaves me a couple of stations ahead, where I need to get down and take another Ersatz, because the line isnt working there either because of "cable stealing". This brings me 5 more stations forward, where I take the first leg of my Ubahn ride, but because of low maintenance, this train can only ride for 2 stations, before we need to get down and wait for another Ubahn to take us all the way to where I need to go.
Germany is a clown world.
@maximonamitzhian9064 lol my work stop I HH is still becoming wheelchair friendly and has been since 2020? Ish
Which isn’t really an economic factor. DeutscheBahn trains being known as late is precisely because DB cargo and other freight trains have priority. A passenger train will have to wait and stand by if it’s holding up a freight train. This is also why DB made pretty nice profits last year and before, the cargo business is booming. On the backs of passengers who suffer the consequences. Roads are very well maintained, also because trucks are a major economic factor and need to run efficiently.
So no, infrastructure development isn’t an economic but rather social problem, economy has priority
@@ja_u whilst I take your point, bridges collapsing and road infrastructure isn't going to help the economy. Plus infrastructure building is actually beneficial to an economy.
Dont forget digitalisation
shutting down nuclear plants was also a "brilliant" decision when it comes to tackling energy crisis
"cheaper energy?, no thanks 🟩🟩🟩"
that after cutting ties with russia before even setting up the alternative
it was a ploy with Russia
@@2MinuteHockeyIf by "ploy with Russia" you mean "it was much cheaper to buy slightly more Russian gas than to run a small handful of remaining nuclear power plants at a deficit", sure.
Germany hs no energy crisis. I did not experience a single blackout in 50 years and there is not a single fuel station in Gemany without gas.
With Germany having low debt level it has longer time than most countries in figuring it out.
Assuming they get their heads out of the sand and start using it.
You can just ignore it
@@krainex They tried that xD
@@domninin that's a great way to prevent wreckless spending by the government
because they never paid war reparations to Poland
It's hard to compete on a global state, especially when the USA is giving massive social benefits to businesses to move operations from Europe to the states. Globalized socialized business benefits and the race to the bottom in the context of corporate benefits is the problem.
The EU is doing the same... its not just simple manufacturing business that is seeing competition. its also investing into new technological ideas and IP that create jobs. Germany hasn't really done that and has been reliant on cheap resources from Russia. Germany is also really bureaucratic in its government. Allot of processes still run on slow manual labor making Germany inefficient and expensive.
Accelerating climate collapse, ecocide, debt and rampant poverty and inequity too
@@Klote3241inefficient and expensive bureaucracy?
Ireland: Hold me pint
That's what the EU did to Britain in the 70's, so I don't know what you're whining about.
You don't think "giving massive social benefits" is the opposite of "race to the bottom"??
A few items should be considered here that have been left out in the analysis:
(1) German industrial output is down but not the value-added. So mainly low margin processes were shifted abroad or shut down. It also reflects that the few energy intensive products that also have low margins - like ammonia production - was shut down. But overall Germany has a low dependence on energy prices. The loss in competitiveness mainly comes from higher wages as real wage have grown despite the inflation.
(2) There is no evidence whatsoever that for advanced economies a higher share of industry as percent of GDP means more growth or more wealth. In fact it might even be the opposite. The US spent decades in de-industrialisation which is why it depends on imports from Asia and Europe for most of its manufacturing. It did not damage growth as the latter mainly came from high-value services. I also question whether the state-subsidized re-industriasiation of America actually helps them. It will mainly lead to more debt and unsustainable zombie companies that rely on US subsidies.
(3) Protectionism has been growing over the last 2 decades in the US. However, the main problem is low demand from China and other emerging markets which is due to their economic crises.
(4) The growth in Germnay is low, but so is unemployment. Real wage growth is positive despite the inflation problem. Therefore, the term "crisis" seems overblown.
Unemployment is low because of low birth rates. In 1964 there werre 1,400,000 births in Germany. They are now 60 years old and retired or retiring soon. Now, the birth rate is half that at 700,000. That's the real reason unemployment has fallen in Germany since it peaked in 2005. Many people are now retired, rather than unemployed. But economically there's no difference - they are not working and dependent on the State.
State subsidized reindustrialization is necessary because the world is deglobalizing, and it will eventually be a security concern and not just a financial concern. If illiterate pirates chucking rockets at ships in the Red Sea is causing this much disruption to global trade, imagine actual state sanctioned piracy and the carry on effects to the global economy. The EU needs to wake up and smell the roses, because the global trade that they have become massively dependent on is at a huge risk of either seeing significant reduction or going away entirely
Governments need to subsidize reindustrialization, otherwise corporations will keep chasing the easy money of outsourcing to a country that eventually becomes a rival or a security risk. The world is currently deglobalizing, and it will be a security risk to not have your own industry. Look at what is happening in the red sea right now, and the massive impact a small group is having on international trade. The EU has become too dependent on global trade, and needs to invest in their own yards if they want to remain competitive in an increasingly fragmented world. It's no longer just about low costs or ease of operation, and it never should have been in the first place because people will always choose the easiest and cheapest solution even if it harms them.
@@caezar55 that’s partially true. The birth rates are low now and have fallen - as in basically all developed countries - but the number of people employed kept rising and went from record to record. But there have been quite a lot of movements within. I.e. more women are working but fewer are working full time. Also the average retirement age has risen by a year over the last decade. That unemployment is low is therefore partially demographic but also reflects the positive economic developments between 2000 and 2019.
in addition, Germany covers a lot of its employment needs with high levels of immigration. Per capita immigration has been higher than in all G7 economies - maybe with the exception of Canada.
@@foregone_roulette I think it depends on what you consider to be so vital and essential that it cannot be traded. I‘d say that there are some products that are strategically important and should be produced at home. But so far nobody does that: The US I still dependent on Russian uranium for its reactors even two years after the war in Ukraine began, the EU needed to act quickly to become independent of Russian gas. China, the EU and the US are all trade dependent. The EU a bit more as it relies more on importing natural ressources.
But e.g. if China wants to sell us solar cells basically for free while 3/4 of the value added and most of the jobs are in Europe, I guess it‘s an acceptable risk. But I get your point.
I still don’t see why the US basically subsidizes all sorts of manufacturing in areas were it likely will never have a comparative advantage. I want to maximize value added and productivity with the additional restriction of not outsourcing security risks.
What Europe really needs now is more weapons and ammunition production and a more Europe-wide integrated Defence industry. That’s the starting point.
I wonder how much is decoupling vs. Intellectual property theft of manufacturing equipment.
Intellectual property is a western construct
We need to fix the 🇩🇪 government. The economy will recover on its own then. Too much and bad political influence brings us down
Germany should get rid of US
How? You got 34K US troops stationed in your backyard. PROTECTING you,😅 I assumed they are very persuasive people.
May be Mr.Trump can do something about it, we'll see.🤣
It’s very difficult dealing with deindustrialisation. Here in the UK we have struggled with it for a century. It’s what underwrote Brexit- a vote of despair
The problem is also, that with the deindustrialisation less low skilled people are needed in the country, but the government in Germany still keeps letting millions of immigrants in. There is a documentary, Zombieland, which shows what is happening in the cities, homelessness, drug use, criminal rates through the roof and so on, also home prices go up because of it. It is a mess, mainly home made by the puppets that call themselves politicians. Greetings to the UK.
Why would yall Brexit without having a deal with US on deck? Doesn't seem like things were thought through.
@@thedailygreatness That’s another question. The point is the parts of the country which voted most heavily for it were the UK equivalent of the US Rust Belt
@@jontalbot1 Do you mean "the deplorables" Hilary?
@@chrimbus71 In areas abandoned by industry those who can leave. Those left behind are often older, less educated and poor. The Brexit vote was largely one between the better educated and the not so well educated although it was led a small group of wealthy people who wish it was 1850. Those people include newspaper owners. They are used to influencing opinion in the UK but are powerless to do so in the EU so they hate it. They imagined that once clear of the EU they could turn Britain into a small government nineteenth state. The problem for them is almost no support for this outside their own very limited circles. Almost no one understands what the EU is or does. Couple that with almost total ignorance of economics and it is not surprising so many people were taken in by the Brexiteers, especially those who are desperate for change
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I have a made in Germany flower pot and saucer, it's ancient and a beast...you can literally feel the craftsmanship in it.
Like bmw , least reliable car
Figuratively
Germany's deindustrialization seems to be the talk of the town. Just yesterday, Economics Explained and Good Times Bad Times uploaded videos on the subject.
These channels copy (aka steal) ideas from each other all the time.
One aspect not mentioned is how for years politicians used large sums of money ro pay off debt while letting infrastructure rot and while underfinancing authoritys. Plus bureaucracy (!)
They can't even keep up with Russia in artillery shell production. This is embarrassing.
Germany isn’t in a war, Russia has switched their economy into a war economy. If you seriously compare those you have understood virtually nothing about how this shit works
Can the USA keep up with North Korea in artillery shell production?
@@MaxMustermann-vu8ir yes, but the MAGA republicans are blocking it. They want dictators to win.
@@MaxMustermann-vu8iryes
@@MaxMustermann-vu8iryes.
Germany can shift their industry tot military equipment. That way Europe can become less dependent of America. Trump wants that every European country spends 2%of its GDP on its military. So a lot of money can be made here.
A good idea. Too bad Germany is completely unwilling to pick up that torch and regear their industry for something that can actually survive in future. So long as Chinese subsidies continue, they simply can never compete with them, and I don't think those subsidies are going to end any time soon. The provincial governments of China may be heavily indebted, but the federal government isn't, and has a boatload of foreign currency it can use to support these subsidies.
Military industry is very energy-intensive too, though. The problem for German industry right now is that we're cut off from our cheap Russian energy supply. I guess military equipment is usually so perversely overpriced that the energy cost only makes up a small fraction of the final price, but still.
@@HeadsFullOfEyeballs As you say, military equipment is usually extremely overpriced. As it stands, the EU has need for military equipment, and Germany is best positioned to provide it. If Germany had any sense, it would pivot towards military production, and let other EU members specialise towards other, non-military things. After all, what's the point of the EU, if not to allow these individual countries to specialise, but not pay too high a price for it?
In reality, it's the inverse, to support dated industries, mostly, unfortunately.
This is why Trump wants this in the first place. He needed EU to buy more American weapons.
In terms of manufacturing, China doing so well is really hurting European industry. I know from what my dad has told me being a design engineer here in the UK. It used to be that China made cheap stuff, but it was usually low in quality and prone to breakage. But if a company or whomever wanted something that was reliable, safe and lasted, they would go to a European country. Since China and Europe were serving slightly different needs, they weren’t competing as much. But my dad complained last year to me when he found out a company in China was making a product very similar to what he was working on, but was able to do it much cheaper (likely because of the Labour costs over there). And I expect similar things are now going on with manufacturers in Germany.
What has changed in China is they can produce all kind of quality.
@@ferhatdikmen3762 True
lol, no they can’t. China is struggling to master the manufacturing of non-lethal baby food.
Its not the labour cost that is hurting European manufacturers the most its material refining. Nearly all bulk material refining steel, aluminium, silicon, chemicals, rare earths copper etc have been pulled into china by an aggressive ccp effort low cost of energy and low environmental standards.
That means they have a massive supply of local material that can can be purchased at or even below cost. This means there manufactures have a significant advantage in finished goods cost. Labour doesnt really come into the sort of highend modern manufacturing germany specialises in. Increasingly however the bulk material and a chemical work is beinging under cut. This can have large effects on local industries as many of the byproducts of these industries are crucial components of others.
China’s share of global manufacturing has been declining for years now. And China has to export a lot more of what it produces than developed countries since China’s own domestic consumption is already low and declining even further
Hard times caused by external factors, not the fault of Germany. It has enough money to weather the storm and adapt and bounce back.
Some of the highest taxes and the overboard bureaucracy have nothing to do with external factors though
Highest taxes, not true, look at basically whole Scandinavia. Bureaucracy on the other hand is heavy here, but does it really play a big role? I'd like to see some data on this.
Here in germany we all know the reason. Its Just because of the green party here!!!
Germany, and in fact Europe, totally missed the era of digitalization and IT.
Better energy access won't change the fact that US/Asians have a massive tech advantage
That's true and it is an area that EU countries need to get to grips with, high-tech is the future and the EU countries have been missing the boat on that.
But they are more than capable of getting back in the game, South Korea is a small economy but very high-tech, the EU economy is a lot bigger than them, it's high skilled and has a big population, it's just a matter of incentive and right government policies to make it happen, and I think it will happen as high-tech reduces other industries, like manufacturing could be replaced by robotics and A.I. in the sense that most manufacturing is done much closer to where the goods are being sold, meaning it wouldn't be good for exports, which is what Germany is, but Germany is also in a good position to be the Silicon Valley of the EU if they pushed hard on that.
@@paul1979uk2000 The EU is leading in some parts of high-tech, its just not the sexy parts. the Machines and chemicals fueling the next industrial revolution all come from Europe... Nvidia uses European machines and silicon to produce AI chips.
Also Robots and industrial software are very strong industries in Europe. SAP is just alot less sexy than google.
So?
Germany yes, other european countries not so much, yes we still aren´t on a asian level but china,india ect leapfrogged, in sweden almost no one uses money anymore, in my country when you go to some public and private services a lot of times they tell you to go online, now i can tell you why it seems otherwise and the awnser is simple old people we have too many of them and that skew statistics, also you know who own most companies you guess it old people that are relentant to invest because they already ´made it´in life and have only the fourth or sixth grade so they don´t understand the modern world.´
EMPSA - European Mobile Payment Systems Association if we reach interoperability between all the systems we can rival upi,alipay ect
Most of us don´t love karaoke thats why germans didnt remember asians really love karaoke and that´s why google(usa) will take over car inforntainment systems
@@weird-guy Apps instead of cash is just stupid and complicates everything...
Technology doesnt make everything better...
LNG is not cheap enough to make production in Germany as competitive as it was with Russian gas. Germany has essentially 3 options to recover it’s competitive advantage:
1. nuclear power. Takes about 20 years to fix the problem.
2. renewables. Takes about 30 years in total, but every wind turbine reduces the problem, so it would be only half as severe after half the time, as opposed to nuclear power, which would suddenly fix the problem at the end of the 20 years, but not help to reduce it before.
3. return to Russian gas. Building Nordstream 3 would take about 2 1/2 years, and would be the by far fastest way to recover German economy, but it would also require pretty radical and risky changes in Germany’s foreign policy.
It boils down to the renewables being Plan A, Nordstream 3 being plan B in case the renewables don’t work well enough and fast enough and the situation becomes desperate enough to take the risks involved, and nuclear power being a mock alternative wielded by conservative politicians to pretend they have a better alternative.
“VW thought they’d selling loads of their IP goos in a place where private IP is state owned” 🙄🙄
There is a potential buffer overflow in the code shown at 8:00.
The problem is that alot of german parties dont want to take on debt, even to it would make economic sense. The Idea of "schwarze Null" (zero state deficit) is in it self flawed but its a fiscally conservative talkingpoint in politics and alot of people belive in it because they dont understand it
it will prevent the government from throwing tax money out the window, which overall is a great thing
UK never had such bullshit idea as "zero state deficit" - so they should be much better in development than Germany, right ???
@@hendrxYou think that Germany is so incompetent that it cannot be trusted with short-term debt as a tool to boost its economy? Even more corrupt countries can do it sufficiently to make sense in economic terms. Even China can and it does it all the time!
@@hendrxExcept you're _supposed_ to spend money you don't have, as a government, during a recession. It's called anticyclic fiscal policy. You take on debt for stimulus to quickly get out of a recession, then pay it off when the economy is running again.
The problem is that democratic governments are reluctant to save while things are going well (it's much more popular with voters to spend the extra money on nice stuff), so the second part of the cycle tends to not happen.
@@HeadsFullOfEyeballs "during a recession"
That is the thing - the black zero is a good concept not to be caught with the pants down, like in the financial crisis 2008. But the purpose of not being caught pants down cannot be just to maintain that black zero. It is not that the second part of the cycle isn't happen. With that philosophy it is really just the second part of that cycle happening all the time.
WITHOUT ENERGY GERMANY IS IMPOSSIBLE TO MANUFACTURER ANYTHINGS
Closing factories is moronic. The future is in heavy industrialization and automation
The thing is many people cannot survive in rich countries. the more expensive the rich countries' living costs, the lessor people including some most talented people can survive there.
@@MSDGroup-ez6zk The solution to that is heavy industrialization and automation which is the best way to lower the cost of goods and services. However, people still need to be employed.
@@eyeofthetiger7 actually automation creates more troubles
Here's a solution. STOP depending on exports and imports. Develop policies towards a self-contained economy. You don't have to "grow" all the time. Normal people just want to live with their basic needs accounted for. Ensure a self contained economy with strong supply chains for basic necessities. Everything else will fall into place.
Issues with Germany are from every way. They basically took these upon themselves. Let me explain.
1. Skilled immigration, many Western countries are dependent on skilled immigration as their native population is getting old but instead of allowing skilled immigrants they allowed unskilled immigrants from middle East and Africa which not only caused issue at social level as they don't integrate but also bacame a tax burden.
2. Skill retention, both skilled Germans and few immigrants who works in Germany leavs as the income is low compared to industry and taxes are very high.
3. Integration issues, Germany cry a lot about they need skilled people but everywhere you go they ask for C1 German. To be honest German is not a widely spoken language outside DACH region and many people don't see learning such a hard language at that age. Add extreme paperwork at every step of your life made it not a shining place for people with options to settle in.
4. Wrong geopolitical moves, Germany depends on cheap energy but instead of staying neutral they basically cut it's ties with Russia without finding cheaper alternatives plus their issues with nuclear they basically damaged theirs own industry.
If Germany again want's to lead they need to fix these issues. Only allow skilled immigrants and kick those out who doesn't contribute to the country, find cheaper solution or pressure both parties at Ukraine war to stop the war , reduce paperwork for everything and make more English speaking jobs. Otherwise the day of other competitors from South Asia, Latin America passing it isn't fair away.
You're already wrong on point 1. We don't need any migrants. What we need is native Europeans to multiply again. End of story. Thus you are also wrong about point 3.
All that said, you are correct on point 2 and 4. But spare me with your migration.
As a German, I no longer want to work so much just to say that we are the economic powerhouse of Europe. Besides working, there is a life to live, and we only have this one life. Blessed be the 4-day working week that I have had for 2 years now.
Ireland did pay off 42% on your and France's central bank debt in exchange for a dreadful work-life balance, bullshit jobs and a bullshit economy, among the highest prices in the EU and a depressing renting/housing/homelessness crisis.
Germany has the lowest hours worked per person per year in the entire world lol. Saying we are currently working so much for our status of economic powerhouse is ridiculous. The work for that status was done in the 1950s to 1990s.
@@dejanbusse805it depends also on how you count work hours
German work hours tend to be a lot more efficiently and accurately measured than, lets say, greek work hours
@@dejanbusse805When you were around in the world and know how most other countries „work“, you would realize that the Germans really indeed *work* in the work hours and don’t just appear working in a defined space.
A classic issue of such like Japan that glorify one of the most toxic work cultures there is.
@@dejanbusse805Yeah. The German state and society used to have some pretty admirable aspects, but nowadays, it's just kinda pathetic.
Oh Lordie, I remember last time Germany had a recession.... Please not again
Time to get your beret, soldier. I already hear Hans screaming from the back...
As I posted on another YT video on this very topic:
"Could it be that putting extreme economic pressures on your own native-born citizens, dismantling your nuclear power industry, not requiring the machinery of the alternative-energy industry to be manufactured in your own country or your fellow European Union countries, not properly assisting your own families with children and flooding your country with illegal aliens who never should have been there in the first place paid for by your own taxpayers were all colossal mistakes?"
So in other words, Germany sanctioned itself?😂😂
I am sure that rising energy costs due to the failed economic and military war on Russia would affect the competitiveness of German industry, which has been the base of its economy
Come on, German people, pull yourself together!!! I completely believe in Germany 🇩🇪😘🇫🇷.
If you take into account that Germany had to suddenly decouple from russian gas in just one summer then the numbers aren't so bad.
1:52 "Deutsche Qwalitäat"
EU really needs its own "Made in EU" campaign. We need protectionism as a tool to maintain our industries' competitiveness against those countries that have higher emissions and we need to be proactive in setting new tariffs even against the United States which has double per capita emissions compared to the EU. We still should not abandon globalization completely, but strong tariff policies are needed as the world is getting more polarized and many countries want to be free-riders in the global effort to preserve our planet for future generations. It's not only about CO2, there are other things to consider like other gas emissions, microplastics, biodiversity, and outsourcing of Western consumers emissions to poorer places like China and Southeast Asia.
Also, Germany should get rid of its dumb "no debt" policy which has zero economic sense. Instead of starving themself, they should look at what the US is doing with its debt-driven growth model that has allowed them to stay the number one economy in the West.
😅 If protectionism worked, Argentina and Brazil would be the richest countries in the world.....
German just needs to make goods and services other people in the EU want to consume. No special campaigns needed.
@@007GoldenLion Protectionism worked quite well for the USA
@@007GoldenLion Argentina and Brazil are not nearly as self sufficient as a Euro-Atlantic Trading Unit.
The EU has had protectionist policies. That's how Germany was able to maintain a consistent trade surplus. In any type of true free market, it would be impossible to maintain a trade surplus for as long as Germany or China have been. Now the rest of the world is catching on to the idea.
Greens: "we did it! We saved the world from the nuclear"
France: "⚡⚡⚡"
Except it wasnt the greens mate
Germany's divestment from nuclear power was decided under the preceding conservative government, not by the Greens.
Also, France's nuclear power plants are in terrible shape and keep failing during summer, to the point that France has had to regularly buy electricity from Germany, so I don't know about "⚡⚡⚡".
@@derechtepurkus"energy? No thanks"
- greens in the coalition government be like 🤓
@@derechtepurkus They literally supported the decision and would have done it sooner. Yes the "Conservatives" ( Merkel Era wasn't really conservative let's be honest here ) It was done but atleast they realise the mistake while the Current Coalition is still defending it and say it was a good choice.
Regulations are a huge factor in this. They have been stacked on top of eachother during the last decades. This goes for business and private people.
I'm living here and I have only one dream: relocate to any other developed country with my family. I can't stress enough how much I hate this crazy place
Klar, weil die Probleme von Deutschland auch fundamental andere sind und woanders nicht auch Probleme existieren.
Gerade hinsichtlich crazy, puh, glaube dir ist die politische Stabilität in Deutschland absolut nicht bewusst und wie vermessen deine Einschätzung tatsächlich ist.
Guck doch mal bitte nach was denn aktuell noch so alls als vollständige Demokratie gilt, gibt dafür ja den democracy Index. Da wirst du schnell bemerken, die Auswahl der Länder ist sehr gering.
Ich verstehe ja Kritik aber dieses komische narrativ des ach so schlimmen Deutschlands ist halt so insane, wenn gleich verbreitet unter Menschen die leider nicht mal wirklich die nationale Politik durchschauen, geschweige denn etwas aus anderen Ländern mitbekommen.
Germany is one the better countries in the eu, are you going to the usa or to the nordics
Whats so bad in germany compared to other developed country?
Or are you going to do a usa and uk style mo were they go live in poorer developed or developing countries while earning a income from their home country? they even prefer the fancy word of expat instead of the word immigrants 🤣
Germany can always realize, reconcile its books, its account balance, its approach to businesses and economic activities. Credikt appliccaccion, warranti. Calidad exceptionale, Germane.
5:30 You must mean the end of North Stream 1. NS 2 was never operational
It was read till america blew it up
@@DieGurke_ Indeed it was ready, but opening it wouldn't solve much though - remember that pipeline gas wasn't sanctioned, Russia simply reduced the gas flow for blackmail reasons and absurdly increased the price with that. The peak gas price occured in August 2022, while the NordStream explosion was a month and a half after.
Also that claim about America is BS for now.
@@diogorodrigues747 because america lied to ukraine and pushed them to war
@@diogorodrigues747 Yes, but in ensure Germany would not back out. In fact, int ensure Germany will have to buy USA LNG,. which costs 4x times more. In fatc, let's say teh AFD gets to power, and reverse all teh sanctions etc, they will not have Nordstrem 2 available.
How to fix the German economy? Learn its history. Germany is always on the wrong side of its history.
whatever US does, the only option it's decoupling from China. Dependency on them (hoping trade would make them more "democratic") and Russia (who the hell attacks their biggest customers' allies) were understandable but big mistakes with the benefit of the hindsight
2014 would already have been hindsight. In 2022 It was just pure idiocy. And that parade of imbeciles causing it in the first place will be very likely reelected.
No it's the opposite. The US has sunk the German economy. The US started the trade war with china and forced Germany off Russian oil. The German economy was reliant on Chinese exports and Russian oil.
There are other issues. Electricity prices in Germany are rising due to the the dumb decession to shutdown all nuclear power plants. That means Germany must import expensive power from other countries. Over Regulations and high taxes on top.
Energy prices in Germany actually have been decreasing over the last 18 months quite sharply.
@@MaxMustermann-vu8ir Because of government subsidies. And not everywhere. There are costs called network charges, which rise with every wind or solarfarm.
Can it recover? NO
Maybe Germany is failing because they spent last 30 years pumping their cooperation with Russia over heads of its eastern allies like Czech republic, Poland and Baltics.
Now Russia nationalised their factories and such, materials are no longer that cheap and accessible and all of the sudden industry is in trouble. Mildly shocking, really.
Volkswagen bought up Skoda only to fail in near future. This way Czech industry got vandalised, and brand will eventually leave Europe, just because someone was too greedy. Such enormous mismanagement of resources is a tragedy to entire continent.
Germany is failing because the US humiliated Russia so much that they attacked Ukraine. When we get a right wing government in Germany we just ally up again with Russia and China and we get the energy our economy needs to run. US-American think tanks have inflitrated German geopolitics. That will be over at some point. And when Germany freed itself from American shackles we lead Europe together with France against the Anglo-American empire!
It was Germany who attacked Russia first, you dummy.
"Now Russia nationalised their factories and such, materials are no longer that cheap and accessible and all of the sudden industry is in trouble."
This is not the problem. Sanctions and absolutely no access to (cheap) Russian resources are. Not just Russian gas and oil, but metals, chemicals, coal too, just to name a few.
Yes, germany should have cooperated with the 5million large baltic tigers, czechs and poles to get some nail painting services, more toilet cleaners, street sweepers and sex workers. are you serious? These countries already have germany as the largest trade partners already. germanys aggressive economic policy where it, for example, completely bought out, bankrupted and outcompeted the latvian industry that doesnt exist anymore after its accession to the eu (im from there) and picked up the workers to work in its german factories and toilets. industry needs cheap raw materials to be sustainable - which the germans denied themselves. im sure, however, that if germany had cooperated with estonia, instead of russia, it could have gotten those cheap raw materials. lmao. i sincerely hope germany becomes a banana republic, its got half of africa there now so with the industry moving to america its a just a question of time.
LNG is more expensive than Russian nat gas. Germany screwed up.
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one aspect which has an impact is the decline of German automotive design quality. VW and BMW have been releasing notoriously uglier models for years, and show no signs of reversing the trend.
It’s not just design quality, it’s the terrible reliability quality.
They also bet against electric cars, because the government encouraged them. Then again, it probably does not matter, as Chine will have cheaper models anyway due to their access to the resources, just like when they took over the solar industry.
@@Schmidtelpunkt _"They also bet against electric cars, because the government encouraged them."_
This is kind of backwards, actually. German car manufacturers were afraid to transition to electric vehicles, because all their expertise was in traditional engines. So they lobbied the government to support internal combustion cars.
@@HeadsFullOfEyeballsTrue. The encouragement was giving in to the lobbying. It is not like that government back then took any active action. They just created the appearance as if it could go on like it was forever. So ironically a Green government would probably have saved the German car industry.
@@HeadsFullOfEyeballsWhich trades short term teem vs long term.
The paradigm shift from ICE to VE is here and accelerating. Either German car industry catches up and manages to transform more quickly - or it will relinquish more market share for cars to Tesla and China.
Tesla was always focused on EVs so has no legacy manufacturing to worry about (and could improve it's car building consistency during a time when it has hardly any competition for effective EVs).
And China sees this as an opportunity. It's car manufacturers would have always had a hard time to compete with European competence in building the best ICE motors and cars on that basis.
But the changeover to EVs with its new focus on batteries and electrical motors vs 100+ years of optimizing ICE motors is a rare chance to compete on a much more level playing field (and China still has a relative advantage on labor costs).
The analysis is incomplete and even ignorant, disregarding available and publicized data: Germany's real crisis is the retirement of its most hardworking generation, set to occur in the next 10 or 20 years, without effective replacement. Efforts to attract skilled workers have been made, but skilled workers often do not remain in the country (as addressed in several available analyses), and the country needs them in the millions, a feat unlikely to be achieved.
There is no way to avoid a demographic crisis, and this will not only impact the already strained pension system (research its current problems online) but also any plans for the future that one may aspire to have. No children equals no future (and no possibility of economic plans of any sort).
Even if we were to return to pre-pandemic conditions, with cheap energy and willing buyers from major countries, the demographic crisis would still loom. However, we don't have those conditions, and on top of that, we face new challenges. It was only a matter of time before Chinese products evolved to have acceptable quality in certain markets, and America would also seek to regain control over its own production to be less vulnerable to the dictates of other countries.
The demographic crisis is not just a German problem; it affects all developed countries. However, for cultural reasons, it is still being ignored, as facing it would require admitting the failure of incredibly ignorant ideologies and philosophies that are still upheld that led to decisions that now cannot be rectified without understanding basic biological and sociological realities, which have become politically taboo.
Hence, the consequences.
Interesting and well written comment. I find that I agree with many of your points. But I do have a question.
"as facing it would require admitting the failure of incredibly ignorant ideologies and philosophies that are still upheld "....What are these ideologies and philosophies you are referring to? And I don't ask in a condescending tone. I am genuinely curious and would like to learn more.
@@tobiasbremner9623 It would be a little ample to respond, but I suspect you will get the idea: the ideologies and philosophies that propagated the massive incorporation of women into the workforce as a part of a "solution" for the so-feared "demographic explosion" of old times (you can even watch old movies like Soylent Green with the theme) and the push to make women's goals equal to that of men. By the way, it was not a baseless problem; the problem existed. The pill and the ability to control natality made it way more possible. What they didn't know is that "the solution" would be so efficient that one day it would end up on the other side of the spectrum, with a negative birth rate.
Other changes complicated the issue: massive migration towards the cities (urban people have less children because their needs are bigger and they are costlier than in rural areas) and the abandonment of traditional values, each element (and there are many) were on step down the family shrinkage.
In the specific case of Germany, work ethics came first and foremost, what put the country on the top list of those who would face such problems.
In the moment, it felt great because you multiplied the workforce, shrank the need for children's care, and so on and so forth, but it was a ticking bomb. Now, many women (and men) even idealize never having a family or children (whatever the reason, and they have plenty).
The state coming to the rescue on questions that in the old times were family assurances (like what happens in poor countries where families are still huge, that is, the children are those who will take care of their parents when old) weakened the idea that there was some value in having and raising (and loving and whatnot) children. Western people are crazy for pets and animals though, so the instinct is not lost, it's diverted... as they say "my babies" to their cats and dogs...
@@tobiasbremner9623one such "ideology" is the current stance of the german government on migration since 2015 as they invited anyone who wants to come without properly integrating them into the workforce and culture, but at least as of late thats being reconsiderd.
Additionally, the reduction in amenities that support building a family and/or having children in the first place like kindergartens, nannies, teachers for schools and medical facilities that have been severly reduced by the current minister of health.
There are many issues thats germany is facing currently and the current government is not properly adressing even one of them, wasting funds on a war that is none and environmental accomodation that leads nowhere.
You could write books about the shortcomings, honestly.
@@magnvss There's nothing inherently wrong with moving women into the work place, and having equal rights to men. HOWEVER, to do so without also providing the social support for families to make up for the fact that both parents are working means that such a policy will lead to fewer families being created (and therefore a much smaller next generation). This is the case in the UK, where there is some of the lowest levels of support for childcare in Europe. As a result the native British population (by which I mean all races, religions and ethnicities that make up native-born Britons. Not just White British.) is falling steeply, with only high levels of immigration keeping the books balanced. Naturally, this leads to a great deal of resentment, as successive governments and economists have hailed immigration as the only solution to the demographic crisis, rather than trying to address the true cost of child-rearing, which has been placed squarely on the shoulders of the parents.
In this case, you can see that removing women from work would actually have an adverse effect, as parents would have half the income to support their children (so even fewer women would have kids). In the past, families relied upon their wider members (grandparents, siblings and friends) to help raise children when the parents aren't around. However, (in the UK at least), entry level work is often centralised to the capital, London, leading to much of the younger generation having to leave home and live in London, where there is no support network. The cost of living is much higher in London as well. All in all, the current UK business model is set up to inadvertently punish large, young families. As a result, many of the millennial generation are putting off having children until they are much older (which will lead to fertility problems and a much smaller replacement generation).
@@solsunman383 You are attributing statements to me that I never made, so it would be quite complex to engage in any meaningful exchange if you are attributing words to me that I never wrote. Yes, moving women into the workforce has consequences, especially if they are young and before they have started families, as this delays the time and opportunity they could dedicate to forming families, as demonstrated by numerous studies. Biology still exists, regardless of rights.
Equal rights have nothing to do with the consequences of exercising those rights on a society: hypothetically, everyone in the West could stop having children, but that doesn't mean that such action would result in positive outcomes.
Of course, once you integrate women into the workforce, you are ensnared: initially, it may feel like having two full incomes, allowing many people to afford their first home, etc. However, over time, the relative purchasing power of such wages diminishes, causing this initial advantage to disappear. Thus, we are left with the worst of both worlds: few children (which are necessary for economic growth, supporting pensions, sustaining the system, etc.) and individuals forced to struggle, as a single wage is insufficient.
Nevertheless, studies show that economics alone do not explain low birth rates: in all countries with negative birth rates (less than 2.1 per woman), wealthy people within those same countries exhibit similar birth rates. If economics were the sole reason for low birth rates, economically well-off individuals would have more children, given their access to various resources.
In different countries where various options have been tried, from the wealthiest (Switzerland, Sweden, Luxembourg, etc.) to the most modest, no incentives provided to potential parents have resulted in a substantial increase in birth rates. There may be a slight improvement for a while, but then rates fall back to previous or even worse levels.
Nowadays, not having children is idealized by many, irrespective of economic factors and other considerations.
Are there exceptions? Yes, there are (some smaller groups that challenge the norm, even among developed countries), but discussing them would require a deeper understanding of certain cultural dynamics, which you may find challenging to assess
If only Germany moved forward with German geothermal electricity more aggressively, the way China moved forward with solar. In 2023, China installed as more solar than the USA has done in its entire history. Germany is well-suited to advanced deep geothermal electricity generation (and unrelated ground source thermal heating, too). There is no reason for Germany to rely on external energy of any sort other than the economic efficiency of trading on demand geothermal electricity for intermittent but slightly cheaper wind and solar.
It doesn't make sense for Germany to maintain its manufacturing industry, given that its population is aging and has higher labor costs but without stable cheap energy. Germany should learn from Luxembourg or the UK in transitioning itself into a financial-driven economy.
And how it's going in the UK. The country has been in the decline, overpriced, too reliant on financial services companies based in one city and dirty money coming from the third world oligarchs and cronies.
Go back to agriculture instead
@@user-nh1yb9mk7ydont forget ireland either..
Yes, Germany definitely looking at UK experience, that's why they trying to keep industry as long as possible
@@ivani3237 industrialism is a false god
"The end of Nord Stream 2" = the blowing up of Nord Stream 2
Yea and?
German exports are almost at an all time high, car production has also significantly increased and energy prices are lower than before the invasion of Ukraine (and I can give sources for all of this). So where exactly is this supposed deindustrialisation?
Numbers don't lie. A lot of companies left for all sorts of reasons (energy, labour costs, taxes and bureaucracy). Also, energy for large companies copy spot prices and they are still much higher (over 50%) than pre-invasion. This industry also does not make decisions based on "now", Germany is expected to have severe energy cost disadvantage compared to USA/China/India and it will get worse as emission allowances for industries in EU are decreased every year. Things are getting worse quickly, but that does not mean "over night". It will take a couple of years until German households will see the full effects of this change.
@@MathewLewit thats literally my point though, numbers dont lie. So where are the numbers which prove that Germany is deindustrialising? I already gave 3 numbers which disprove the deindustrialisation narrative. Even crude steel production, which "everyone" said would collapse, is stable (and technically speaking even more profitable than before according to the German steel guild, 2022 was even a new record WRT sales revenue).
Yes, please give the sources for all your information
@@donparkvideos are you asking me or the other guy?
@@asdasdasddgdgdfgdgYou. Thanks.
VERY IMPORTANT FACTOR MISSING: Stupid politics significantly hurt the economy in Germany as well!
Ridiculous policies were introduced......
They also did something to their nuclear fleet, not mentioned regarding energy issues
3:23
“But unfortunately for Germany this strategy didn’t really work out”
A common theme of Merkel’s government it would seem La
This post is presenting Germany as some sort of economic basket case but it is the third largest economy in the wotld with a gdp of $4.5 trillion.Its debt to gdp ratio is 64 %with exports in 2023 vslued at $1.64 trillion with a trade surplus of $210 billion. Their manufacturing industries produce some of the most respected brands in the world.Given the choice of buying a prestige car brand most customers would opt for Munich over Detroit .Germany is a member of the EU, its Customs Union ,Single Market of 449 million.Germany has faced challenges in its recent history such as reunification. Other G7 countries slso face similar challenges but have less leeway to overcome them.
Chinas strategy was propably always build on the idea, to reduce imports from nations such as Germany in the future. They brought all of this stuff for decades, made companies invest in China and share their knowledge with Chinese competitors and then wanted to make all of this stuff themselves in the future, by copying it. It was just a matter of time, when China would start to ramp this up. Now it happened.
It will be hard to turn this around, as it was propably not part of Chinas long-term plans.
Yeah, well... Germany has made quite a few very poor decisions in recent years. Ukraine, for example. And the EU... what a dumpster fire that is... Whining about China isn't helpful.
The Nr 1 reason for the economic decline is ridiculously high costs because of high taxes and self-made inflation; followed closely by Nr. 2 extreme bureaucracy.
How to ruin your manufacturing base ( A German guide )
1. Rely completely on russia for its energy
2. Have to cut of russian energy because of the war in ukraine
3. Turn of all nuclear power plants
4. Turn coal plants back on to keep the lights on
5. Profit?
3 came before 1, because 1 would have allowed 3 to happen while transitioning to regenerative energy sources.
@@Schmidtelpunkt yes indeed however the continued the shutdown of nuclear even after the loss of ruzzian gaa
@@Daniel-ts1yn Actually they just added more runtime. The shut down had been decided way earlier and the companies let their certifications run out and already organized the process of switching them off. Driving on sight, you know...
This is what happens when you declare war against a low carbon energy source like nuclear power, to pursue the dystopia of 100% renewables.
I think Germany needs to reduce bureaucracy and taxes. and then take out loans and subsidize the economy
Germany does not have the workforce to maintain its industrial output levels. And the EU markets are shrinking as other EU nations are aging out as well. The loss of cheap Russian gas is accelerating the inevitable decline.
Denying demographic trends is childish and unconvincing.
Since Germany is no longer getting the inexpensive piped gas from russia and taking in mostly expensive liquified gas delivered by ships, this has a HUGE impact on comeptitivesness (pricewise) of German export products. Gas or other fuels have an amplified effect on economy of any country as they are drivers of many other expenses. Additional pressures may come to German car industry since China is subsidizing its electric car productions and it is VERY busy buying and contracting the mined material needed for electric car batteries since China wants to sell expensive batteries to other countries and it wants to establish a near monopoly on mined material that are and will be used in all kinds of car batteries. So, even if VW switches to production of more electric cars, VW will have to buy the batteries or materials required to manufacture batteris from China. Time for WTC t step in and contain Chinese subsidies and monopoly actions.
I was a bit baffled by his comment that Germany’s energy prices are low. If they are deindustralializing, a major contributor to that would be the higher energy prices from importing LNG.
A much clearer explanation of Germany's state of affairs.
The cheap oil from Russia. Did helps the economy to float on top as well.losing it, that's a big blow to the economy. but say will get back on top.
Was already a lose lose in terms of emissions
@@toyotaprius79 and now they are running the economy on coal, cause they shut down nuclear as well
how?
Well, when u mostly rely on imports of cheap energy from a villain and exports to a dictatorship u shouldnt be surprised about the years of reckoning.
Basically. German economic policy was wildly stupid, and demanded easiness over an actual hard-earned economy, by relying on such unreliable figures. This is a hole they dug themselves, with their reliance on dictatorships, their utter lack of innovative spirit, and the general indolence of their society.
And the whole EU imports from said dictatorship, even worse than what the Germans are doing, atleast they have a trade surplus.
Germany usually goes through these phases but we all know, as always, Germany comes through these phases stronger!
I'd like to critizise this video as it once again uses "economic growth" as the goal, never questioning that ever needing increase of consumption and production.
Germany has been trying to reduce its carbon footprint and becoming more environmentally friendly. Environmental Protection doesnt work with unchecked growth and capitalistic exploitation. At some point, one might have to ask if economic downturn is really bad (for the planet, and society as a whole) or if it is a necessery step in re-learning to live more *with* the planet, rather than abusing it.
we are still waiting for the "correct" and sincere video on the Italian economy that you promised to make 🙄😒
Reputation for quality in cars vaporised with dieselgate around 2018 - been driving VW until 2019 when switched to Tesla
The german E- car industry is heavily evolving, some former non E-car brands even want to completely swap to the electronic version in the near future, while leading the autonomic driving level with mercedes benz and BMW
It’s all about energy. They lose the energy advantage so they have to look for more added value sectors. There’s too many to compete with.
It's a shame for Germany, I love my vw but with the prices going up significantly, I'll have to look to cheaper manufacturers if I want to keep electric.
In your main Concurns you forgot insecurety in the industry about marketdesitions by the government and about the poitical situation voerall
Ah shit. Here we go again...
Meanwhile Estimates are that the German Economy has become the Third Largest in the World this Year overtaking Japan....
And Germany is not on the "Brink" of a Recession. It is already in Recession.
But the Recession is Minimal and not able to Outweigh the Growth inbetween Covid and Ukraine. And its already Expected to go back to growing.
While this Growth is likely smaller than Originally Expected. The Real Growth is still massive because of how Strong Germany already is.
I suspect you forgot demographics. Germany is going to run out of workers.
Current economic model is completely unsustainable, to put it simply, the best way to have a strong economy is having a strong internal market and not be dependent on imports and exports but, the way the market is set up you need an impoverished working class to be able to be competitive and poor workers do not spend the necessary money to sustain an internal market.
The ringing of calls at the end of videos is really annoying. I get the message but the sound is very unpleasant none the less
2:59 this image...
Brits trying to explain how another country can fix it's economy. Oh the irony.
As a German, I would add two more reasons for the current crisis:
1. The pathetic german government. It's a coalition of 3 parties that basically hate each other, making it the weakest and least stable government post-WW2. Putin started his war just a few months after the german government was formed. A coincidence?
2. The majority of the population is stuck in a comfort zone. Germany was highly successful for decades and everybody got used to it.
Problem #1 could be solved by the end of next year. As for problem #2, I'm not so sure.
*Here's an "Explain Like I'm Five" version of the abstract*, focusing
on why Germany's strong economy is having problems:
*Germany's Trouble*
* *Germany is like the best toymaker in the neighborhood.* They sell
lots of cool stuff all over the world.
* *But things are getting harder.* Some countries are making their own
toys now, so they don't buy as much from Germany.
* *Also, Germany's toy factories need special power to run.* They used
to get this power from a neighbor, but that neighbor isn't sharing
anymore.
* *Now, Germany's toymakers are worried.* They don't know if they can
keep making as many toys, and that makes people sad.
*Can They Get Better?*
* *Maybe!* If the special power gets cheaper, Germany's factories
might work better again.
* *The toymakers might need to find new friends to play with.* That
way, they can sell toys even if some old friends don't want to buy
them.
* *The big bosses in Germany are trying to help.* They want to build
new kinds of toy factories that are extra awesome.
*Important!* The world is a big place, and sometimes things get
messy. Germany is facing some tough challenges, but they're working on
figuring it out.
*Abstract*
This video examines the recent decline of Germany's industrial economy
and explores potential remedies. Once a manufacturing powerhouse,
Germany faces setbacks due to factors including:
* *Protectionism:* Increased protectionism in both the US (e.g., the
Inflation Reduction Act) and China (e.g., Made in China policy) has
hindered German exports and investment.
* *Declining Chinese Demand:* China's economic slowdown has reduced
demand for German goods, impacting Germany's export-driven economy.
* *Energy Crisis:* Germany's reliance on Russian gas, now disrupted,
has harmed its industrial competitiveness and investment climate.
*Can Germany Recover?*
Germany's economic recovery hinges on:
* *Stable Energy Prices:* Current low European energy prices, if
sustained, could bolster German industry competitiveness.
* *US-China Relations:* A de-escalation of the trade war between the
US and China would benefit German exports.
*Government Action*
Germany's government could drive recovery through:
* *Targeted Industrial Support:* Investments like those securing Intel
and TSMC plants in Germany help develop strategic industries.
* *Clear China Policy:* Germany must balance the risks of decoupling
from China with the benefits of maintaining market access, a complex
dilemma.
*Let's be clear:* the global economic landscape is uncertain. This
video highlights Germany's struggles as a case study in how
international trade frictions and energy dependence can undermine even
the most robust industrial economies.
i used gemini
Well Donald Trump told them in his UNGA speech...they are not laughing now.
Not mentioned: Germany closed all of its nuclear power stations (in the past five years).
Just get a guy with a funny mustache to do it. That worked last time
It did not work the last time
They've also pushed harder for the unsustainable net zero which is completely unprofitable
Es ist alles so ermüdend.
🏭📉 Understanding Germany's deindustrialization - a critical topic with far-reaching implications. Let's delve deeper into this important issue! 💼🔍
I'm missing the mention of the forced green transition. They decided to shut down all of their nuclear power plants, despite Europe being energy poor was a known fact. Lack of natural gas wouldn't be as big issue as it is if the pointless shut downs didn't happen.
It's missing because it's simply not a factor.
it's overall impact was is not as much as people think. Nuclear energy, at it's peak was never more than 16% of the total energy supply in Germany. Fossil fuel has always been the backbone. Even in a Germany that DIDN'T exit nuclear power, exiting Russian gas would have been no less devastating. Green transition already has fully replaced what little nuclear production there was and then some. In fact it ended up being a GDP growth driver (until the conservative and Neo-Liberals stopped government investments there and killed a million jobs and gave the entire Solar industry to China).
Additionally, guess where Germany got the Uranium for it's nuclear reactors from? It was Russia. So even in a "Germany remains nuclear" scenario Germany would STILL be energy dependent on Putin.
Also gas is used for production as a resource chemical and for direct heating, neither of which nuclear will help you. (Germany only has very low amounts of electrical heating installed)
Germany has been transitioning away from nuclear power for decades, though. It peaked at ~30% of the total electricity produced in the early 2000s and has been declining ever since.
@@HeadsFullOfEyeballs Germany is transitioning away since the Fukushima event, it was the turning point where the greens won this battle over Merkel (who previously supported nuclear power). The results: coal insdustry barely shrinked, gas dependency (from Russia) and ironically nuclear dependency (from France) grew, while the new green energy basically covered the surplus energy consumption over the decade.
@@lydon5595This isn't true, Germany had been using less and less nuclear power for about a decade before the Fukushima disaster. Fukushima just made nuclear power (even more) unpopular with the general public, so Merkel decided to throw them a bone and get rid of that basically irrelevant part of the German power grid.
And France's nuclear power plants are so unreliable that they have to regularly import electricity from Germany.
Protectionism doesn’t apply only to USA and China. The effects of the sanctions on Russia are virtually indistinguishable from the effects of protectionism, with basically only difference being that it’s not Russia itself who has the power to change that externally induced protectionist policies. All the other effects on Russian economy are basically the same as with protectionism, and likely to lead to the same long term developments.
Although, strictly speaking, Russia doesn’t have the power to stop the externally induced protectionism, but they have the power to prolong it, by being more aggressive in the war in case the western countries consider to end the sanctions.