by Dr. Johanna Weber //
The Chairman of the Executive Board of Deutsche Börse, Dr. Theodor Weimer, spoke publicly on 17.4. of a Economic downturn. Germany is not very popular with investors and is well on the way to becoming a developing country [1]. Germany is the "Junk store" become.
Is that the case?
A comparison is definitely worthwhile. The German economy currently lags behind India, Russia and Japan if purchasing power parity (PPP) is used as a measure [2, 3], and India, although no longer a developing country, can still be considered an emerging market [4].
(Fig. 1: Ranking of national economies, source: https://tkp.at/2024/06/07/russland-jetzt-viertgroesste-volkswirtschaft-weltweit/)
Nevertheless, the German government is constantly supporting the country with taxpayers' money, especially in the fight against climate change [5]. Even if there are no economic losses in Germany due to climate change [6], this does not apply to climate measures, which do have a negative impact on the economy: Private households, the labor market, the energy industry, the real estate sector and exports are on the way down [7, 10, 12], but not only climate measures, also a high sickness rate (due to corona measures?) [39, 40 on p. 30]) is partly responsible here [8]. A large hedge fund is already betting against the German economy [9]. The economic climate is tense, public debt is rising (currently around 60 % of GDP, by way of comparison: in Russia it is around 20 %) [11, 14, 15], evil voices are even insinuating intent [13].
In 2022, the German inflation rate was higher than that in the Democratic Republic of the Congo [16]; fortunately, things are currently somewhat better again [17], but the question is for how long. German exports have fallen compared to the previous year [18, 19], GDP in 2023 was around 4122 billion [22], meaning that Germany is only just under a quarter of the GDP of China or the USA [23]. The median monthly net income in Germany is EUR 2019 [21]. The proportion of people living below the poverty line in Germany is almost 15 % [21], and in terms of gross national income, Germany was already unable to keep up with Singapore, for example, in 2014 and did not significantly outperform some African countries [24]. According to World Bank data, income inequality in Germany was higher or similar in 2018 compared to some North African countries (see Fig. 2) [21].
Fig. 2: Comparison of income inequality worldwide, source: https://de.wikipedia.org/wiki/Gini-Koeffizient)
The definition of a developing country [25] is provided by the German Federal Ministry for Economic Cooperation and Development (BMZ):
a poor food supply for large groups of the population, resulting in malnutrition and hunger,
a low per capita income, poverty,
no or only inadequate health care, a high infant mortality rate and a low average life expectancy,
inadequate educational opportunities, a high illiteracy rate,
high unemployment, an overall low standard of living, an often extremely unequal distribution of available goods.
How does Germany fare here? Although the food supply is sufficient if you can afford it, national self-sufficiency is significantly worse [26, 27], and low per capita income and poverty are also present in Germany to a similar extent as in developing or emerging countries (see above).); although healthcare is theoretically available in Germany, waiting times for medical appointments are currently very long [28, 29]; infant mortality is higher than in Belarus, Singapore or Montenegro, for example [30]; although Germany ranks 38th in the world in terms of life expectancy, this is currently falling, even in Saarland, which has been fully vaccinated against coronavirus [31, 32, 33]. Germany at least scores well in terms of literacy [34]. The standard of living in Germany has already been discussed above using the gross national product and the poverty rate and unfortunately does not look so good (see above), income inequality in Germany is comparable to that in North Africa, i.e. below that of Algeria and comparable to that of countries such as Mali and Niger [37, 38]. Unemployment is currently at an encouraging 3.2 %, but it is important to realize that this does not include small self-employed persons, midi-jobbers and people on top-up benefits who work more than 15 hours a week [37], whereby the unemployment rate in Oman and Uganda in 2021 was below that found in Germany today [36].
So Weimer may well be right.
Sources
[1] https://media.video.taxi/embed/qVtG6zzbtGtKhtt
[2] https://tkp.at/2024/06/19/nach-biden-hoppalas-bei-g7-wird-hillary-clinton-kandidatin-der-demokraten/
[3] https://tkp.at/2024/06/07/russland-jetzt-viertgroesste-volkswirtschaft-weltweit/
[4] https://www.pi-muenchen.de/indien-vom-entwicklungsland-zum-schwellenland/
[5] https://www.bmz.de/de/laender/indien
[9] https://tkp.at/2024/01/25/hedgefonds-wettet-1-milliarde-auf-niedergang-der-deutschen-wirtschaft/
[10] https://www.zdf.de/nachrichten/wirtschaft/immobilien-wohnungen-bau-baubranche-insolvenz-100.html
[12] https://www.tichyseinblick.de/wirtschaft/experten-wirtschaftskrise-deutschland/
[14] https://www.bundesbank.de/de/presse/pressenotizen/deutsche-staatsschulden-928466
[16] https://de.wikipedia.org/wiki/Liste_der_L%C3%A4nder_nach_Inflationsrate
[18] https://de.statista.com/statistik/daten/studie/165463/umfrage/deutsche-exporte-wert-jahreszahlen/
[19] https://de.statista.com/statistik/daten/studie/151631/umfrage/deutsche-exporte-und-importe/
[21] https://data.worldbank.org/indicator/SI.POV.NAHC?locations=RU-DE&name_desc=false
[24] https://www.bpb.de/kurz-knapp/lexika/lexikon-der-wirtschaft/19220/entwicklungslaender/
[25] https://www.bmz.de/de/service/lexikon/entwicklungsland-14308
[26] https://www.bundestag.de/dokumente/textarchiv/2023/kw16-pa-ernaehrung-selbstversorgung-941568
[28] https://www.sueddeutsche.de/gesundheit/krankenkassen-arzttermin-wartezeit-patienten-1.5889719
[29] https://www.sr.de/sr/sr3/themen/panorama/saarland_warten_auf_den_arzttermin_100.html
[30] https://de.wikipedia.org/wiki/Liste_der_L%C3%A4nder_nach_Kindersterblichkeitsrate
[31] https://de.wikipedia.org/wiki/Liste_der_L%C3%A4nder_nach_durchschnittlicher_Lebenserwartung
[32] https://www.tagesschau.de/inland/deutschland-lebenserwartung-102.html
[34] https://de.wikipedia.org/wiki/Liste_der_L%C3%A4nder_nach_Alphabetisierungsquote
[35] https://de.statista.com/statistik/daten/studie/160142/umfrage/arbeitslosenquote-in-den-eu-laendern/
[36] https://de.wikipedia.org/wiki/Liste_der_L%C3%A4nder_nach_Arbeitslosenquote
[37] https://www.startpage.com/sp/search
[38] https://de.wikipedia.org/wiki/Gini-Koeffizient
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6 Responses
Facebook unfortunately deletes this text because it violates the "community standards". Unbelievable.
Facebook has passed its zenith. However, Facebook has become more popular with older people in particular. Among the over-60s, the proportion of users has actually risen sharply in the last three years.
Dr. Weber,
as much as i agree with your analysis that the german economy is in decline, i do not agree with your reference to india. the comparison of absolute gdp figures is inappropriate even when adjusted for purchasing power. our economic output per capita is still more than six times higher than in india. in addition, almost 45% of indians have to make do with less than 3.65$/d (kkb), while in germany only 0.3% have to make do with so little.
if hedge funds are speculating against the german economy, perhaps it is not because the government debt ratio is so high, but rather because it is far too low (thanks to the debt brake)? if it were otherwise, these hedge funds would also have to bet against the us (122%), the uk (103%) or italy (145%). not to mention Japan. the price surge of the last two years resulted from external price shocks (supply chain problem due to corona; energy prices), but can never lead to inflation, which is defined as a multi-year wage-price spiral with a corresponding effect on the general price level, given the underutilization of the economy.
just as an aside: according to the source you linked, the price increase was never higher in our country than in the Democratic Republic of the Congo.
it is true that the development of incomes has been completely unsatisfactory for decades, which is why domestic consumption remains weak and dependence on exports (which, by the way, is synonymous with rising foreign debt!) is increasing. this in turn has led to unsustainable foreign trade surpluses for years, which urgently need to be reduced. however, this should not be achieved by reducing exports, but by increasing imports, which in turn requires stronger domestic demand through rising wages.
the food situation in germany is unsatisfactory, but still a far cry from the situation in developing countries. fortunately, the welfare state is effective here, albeit inadequate. here too, a higher minimum wage, a more equal distribution of wealth and a means-tested citizen's income would be the first sensible measures.
compared to developing and emerging countries, we are fortunately far, far ahead in terms of both average income and the poverty rate. you must not make the mistake of confusing absolute and relative figures here. although we have an unpleasantly high level of relative poverty, we have virtually no absolute poverty.
According to the Federal Statistical Office, the unemployment rate in Germany was 5.8 percent in May. as this rate is statistically embellished, it must be assumed that more than five million people are out of work or are currently working less than they would like to. that is why talk of a shortage of labor is just that: talk.
in summary, it can be said that the development in germany is negative, but to compare it with developing countries is hopelessly exaggerated. and the remedies are certainly not the ones Dr. Weimer is relying on: we certainly don't need more investors who first extort subsidies in order to create jobs that are obviously underpaid and then generate the profits abroad for tax purposes. what we need is state investment in infrastructure, education, health and care, an abolition of the unspeakable, undemocratic debt brake, higher minimum wages and significantly more redistribution through wealth and inheritance tax. then the emerging economies will not catch up with us in the foreseeable future and we can continue to help reduce the gap and lift more people out of absolute poverty.
hello,
first of all, i'm a pensioner aged 40 and i'm actually doing well.
but that doesn't change the fact that there are "white" pensioners and even pre-retirees who only manage to keep their heads above water by doing odd jobs or collecting bottles.
i basically agree with the statements in the article, but i would like to point out that our standard is only maintained in comparison with "poorer" countries in part by extreme debt.
but the most important thing about all these articles, most of which are written by people who are probably much smarter than me.
WRITES AGAIN AND AGAIN FOR PEACE; WRITES AGAIN AND AGAIN; POLITICIANS NEGOTIATE AND DO NOT SEND WEAPONS.
Sincerely
-DR
The ARD mini-series "Where we are is up" is recommended on this topic
My father was an underdog who founded his company in the late 1940s. He never avoided unnecessary disputes and always put his finger in the open wounds of the then young Federal Republic of Germany, for example, he had already experienced election fraud very early on in the 1950s as an election official and loudly announced that he would no longer be available as such. He always spoke of an office dictatorship, of desk criminals... . At the time, I thought that was too exaggerated, but now, especially since 2020, I wonder whether there is something to such thoughts. My father probably also used the term dictatorship to refer to his powerlessness in the face of a state exercise of power that he felt was not in accordance with the rule of law. He was drafted into the Wehrmacht at the age of 18 and was supposed to be shot during his basic training because he insisted that he was not there voluntarily, on the grounds of draft evasion. I think things like that made him extremely sensitive to state attacks.
In today's situation, we should remember the misery of the world war on all sides. We should also be aware of how important a functioning constitutional state is for a democracy. We should no longer accept the corruption that is ubiquitous in Germany, i.e. perceptible everywhere. If we want to remain a democracy, we have to work on making it dangerous to break the law again.