German Economy Faces Uncertainty as Coalition Crisis Deepens

Bosch, a major automotive supplier, has revised down its 2024 outlook and may cut more jobs beyond the 7,000 already announced.

CEO Stefan Hartung told Tagesspiegel that concrete measures must be implemented before early elections to strengthen the economy both in the short and long term.

Henning Vöpel, CEO of the Centre for European Policy (cep), told DW that the Berlin coalition “failed to put the German economy back on a growth path.”

Meanwhile, Vice Chancellor and Economy Minister Robert Habeck warned that “this is the worst moment for government failure.”

ING chief economist Carsten Brzeski offered a pessimistic assessment, telling Reuters that Germany is now more vulnerable than before Donald Trump’s first term in 2016.

“After four years of stagnation and structural weaknesses, Germany is not only the ‘sick man of Europe’ but also more vulnerable than eight years ago,” he said.

Experts suggest several immediate measures are needed, including stabilising energy transition, reducing bureaucracy, advancing digitalisation, and providing tax incentives for investment.

Martin Gornig, research director at the German Institute for Economic Research (DIW), called for systematic changes at both national and European levels, advocating for a “calm policy approach” rather than hasty measures.

Source: Deutsche Welle