For Martin Brudermüller, Oliver Zipse, Joe Kaeser and Co. the wind is blowing from the front. Energy price shock, shortage of skilled workers and redefinition of our security policy interests: This is the infernal trio that is noticeably narrowing the radius of action of the entire German economy.
The “Germany model” that Chancellor Helmut Schmidt spoke of in his election campaign has served the country well. These days it will be stamped invalid.
In this historical situation, the federal cabinet should do what any board would do: invite people to a weekend retreat, which of course must not be called a crisis meeting, out of consideration for the feelings of the workforce.
It would probably be called the “Future Summit” or – even more harmlessly – the “Performance Check”. Botho Strauss: “All fraud begins with metaphor fraud.”
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The Germany model was based on three factors, all of which have become obsolete. The swindle is that no politician (and certainly not the Minister for Economic Affairs) dares to call this new reality by its name.
Instead, it speaks of the crisis, implying that the condition will pass like a winter flu. But he doesn’t. The new reality is here to stay:
We are the western country with the highest industrial share of the gross national product – yet. An important reason for “Made in Germany” was a cheap energy base, which initially consisted of domestic coal and then cheap Russian pipeline gas.
It was only on this basis that – despite high wages – domestic automobile construction, the steel industry in the Ruhr area, mechanical and plant engineering in Baden-Württemberg and German chemical production could develop.
This energetic basis was destroyed with the Ukraine war and the end of the German-Russian energy partnership. With Nord Stream 1 and 2, we are looking into the tube today, which is empty.
The future energy price level is likely to be significantly higher than that of the past. As a result, many previously profitable productions are permanently pushed into the red.
The German export model is hardly imaginable without the opening of the Chinese market and its initially almost limitless capacity to absorb.
In particular, the traditional industrial companies, from ThyssenKrupp and Siemens to VW and BASF, have had their balance sheets gilded here. The prosperity of the permanent workforce in Wolfsburg, Ludwigshafen and elsewhere rests on the shoulders of cheap and consumer-hungry Asian workers.
But the China of Xi Jinping is no longer the China of Deng Xiaoping, Jiang Zemin and Hu Jintao. An alienation has set in. Under the pressure of events, this export-import relationship is being politicized, to which the Chinese and also the Americans are making their contribution – possibly not entirely altruistically.
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But none of this changes the fact that the industrial China campaign has de facto been canceled for the German economy. The orderly withdrawal has begun in many industries. What we yesterday called a “market of the future” now bears the unattractive name of “dead end”. The German economy will not have to completely relocate its supply chains, but will have to relocate large parts.
The expensive but first-class trained domestic workforce was the prerequisite for the further development of German engineering after 1945. The skilled workers in production and the academics in the laboratory were two sides of the same coin: the German model was never cheap, but always innovative.
The now stubborn lack of skilled workers and the emigration of highly qualified academics to the USA have changed this situation.
The demographic trap and an ailing education system are having a toxic effect. European war refugees and poverty migrants from Africa cannot – at least in the short term – undo this qualitative change in the German labor market.
Conclusion: In the productive, fiery core of our economy, where labor and capital are supposed to react violently to one another, things are gradually cooling down. The old business model is getting worse and worse.
The new business model has not yet been found. Possibly also because nobody was looking for it.
Politicians don’t plan the future, only the next relief package. Our most dangerous opponent at the moment is the nostalgic solicitude of a political elite, which would rather increase the supply of credit than the willingness to reform.
Franz Kafka experienced the effect of this loving yesteryear on his own body – and then aptly described it as follows: “There’s nothing parents want more than to pull you down to the old times, from which you want to rise with a sigh of relief. They want it out of love Of course. That’s the horrifying thing.”
Gabor Steingart is one of the best-known journalists in the country. He publishes the newsletter The Pioneer Briefing. The podcast of the same name is Germany’s leading daily podcast for politics and business. Since May 2020, Steingart has been working with his editorial staff on the ship “The Pioneer One”. Before founding Media Pioneer, Steingart was, among other things, Chairman of the Management Board of the Handelsblatt Media Group. You can subscribe to his free newsletter here.
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