April 15, 2024

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Scholz, The German Economic Crisis and Switzerland's Suffering – News

Scholz, The German Economic Crisis and Switzerland's Suffering – News

Anyone who says something important in political Berlin books the big room at the federal press conference. In front of the wood-framed blue wall, victories are announced, lofty political plans, resignations – or really bad news.

Today is a day of very bad news. The leading German economic institutions announced their growth forecast: 0.1 percent. Number like Punch. It no longer works in Germany.

Point the finger at Berlin

There are many culprits and causes. High energy prices, for example, are affecting the energy-intensive German economy, particularly the steel and chemical sectors, but also the automotive industry.

But many fingers point to Berlin and the chancellery. The traffic light coalition under the leadership of Chancellor Olaf Scholes is also confusing economic policy. The “Growth Opportunities Act” finally made it through the parliamentary systems – but it was heavily watered down and not conducive to significantly promoting investment and therefore growth.

Economists rub their eyes

Everyone is confused – German industry is completely confused by the many decisions made in Berlin. Dealing with electric cars is a good example. Practically overnight, state funding was drastically cut. After all, from a government where the Greens wanted to promote energy transition as a central agenda.

The result of the government's dovish approach: Sales of electric cars are falling, and electric car factories like Volkswagen in Saxony are struggling to keep their capacity up. Who can really rely on Berlin's political decisions? At the same time, car manufacturers from China are pushing into the German market with affordable electric cars. Mercedes, BMW and Co. A horror scene is very bad news.

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Another major cause of economic weakness is the lack of skilled workers. Now, ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​frontall now, the rail unions are gradually pushing back the 35-hour week for train drivers from 2026 to 2029. Economists aren't the only ones rolling their eyes.

Fear in Switzerland too

Germany seems to be in masochistic self-harm mode. That in itself would be bad – but Germany's weakness also affects Switzerland.

The local industry exports 25 percent of its products to Germany. Our northern neighbor is a very important export market. What Germany calls a cough, Switzerland calls it the flu. Fears in Switzerland are correspondingly high.

Can't expect good news from Germany anytime soon. Many say it's time for Scholz to implement a crisis plan that actually works. One with arms and legs was given a special presentation at the central government's press conference. Those who say something, book the hall. An important one.

Stephen Reinhardt

Chief of Foreign Correspondents

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Stefan Reinhardt is head of foreign correspondents and head of the Zurich newsroom. Previously he was SRF's Germany Correspondent.