Germany's Unexpected Economic Crisis

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As a German there is nothing "Unexpected" about this.

"I shot myself in the kneecaps, the fact I can no longer walk is completely unexpected."

As a German I’d say that most of our problems (demographics, lack of digitalization, military, bureaucracy, immigration) are known for years. Unfortunately our politicians are only interested in themselves and the next year election instead of proactively tackling major problems that pay off mid and long term…

I am an Senior R&D Project manager for a German multinational. I can tell first hand that bureaucratic red tape is forcing us to relocate most of our business. Most of the regulations on chemical business are so strict that it is no longer possible to do innovation, let alone set up production, in several key areas. If saving the environment is the goal it is self defeating: you make regulations so strict that companies are relocated just across the boarder, with externalities coming right back. Or even worse, relocate in countries with no regulations at all, making it worse for the environment as a whole. When, in think-tanks you try to explain this, you are met by a bunch of jurists that lack the basic technical understanding in the fields they are regulating upon. This is just the start. Complying with bureaucratic requirements starts to cost more than the rest of the development process combined, without any real tangible benefit for the consumer, safety and the environment. Having this coming from parties that then caused Germany to increase reliance on coal because of an irrational fear of nuclear is, to put it mildly, infuriating. There is nothing more efficient at killing the German industry than German regulations.

this is not unexpected for any German tbh. falling birthrates, ballooning social security costs nonexistent investments, etc are all issues most have seen coming years ago and tbh this is only the beginning.

Unexpected? What do people think is going to happen when there is virtually no investment into infrastructure the last 20 years and we are now still working with the same size infrastructure that was build for a 2bn economy and 75 million people. Everything is to full, breaking apart or has processes that can’t handle the load.

This can spell disaster for the German people. This happened in the US a few decades ago, and it made corporations much wealthier yet left the common man with no good paying factory jobs.

Unexpected? Maybe. Self inflicted? Absolutely.

Cashing in on German brand reputation by manufacturing overseas will eventually erode the value of those brands.

Imo the German industry crisis is so frustrating partially because it's, in large part, self inflicted. The government opted to shut down its entire nuclear generation sector in the midst of the crisis at the time when they could least afford doing so. I have difficulty seeing that decision as anything other than deliberate sabotage of their own economy.

The days of making things last 50 years ended in the early 70's Everything became ''Fashion'', throw away, so quality was flicked. Nothing made today will even last 20 years

My labour economic professor had a very thoughtful comment about so called "labour shortage": there is no such thing as labour shortage, only poor wages.

Germany has been offshoring its manufacturing for a long time. My mom lived in Hungary over 20 years ago, even back then huge numbers of Hungarians were making "German" products and I doubt that has gone down since then. Germany has the entire EU as a labor pool and makes use of all of it.

Great video as always, but as someone who has lived in Germany for decades, the only unexpected thing about this crisis is that it took so long for it to happen. Some more details: 5:15 Germany is definitely NOT a country with the highest wages, at least not for real high-quality employees. Doctors, Engineers and computer scientists can earn several times what they earn in Germany if they go abroad. Sometimes just moving to Switzerland can easily double the salary (that is even if one considers the taxes and the cost of living) And this is also the reason for 8:20 No one wants to come to Germany, at least no one whom Germany would benefit from coming. And 8:50 is factually incorrect, and a hotly debated topic inside Germany: The official "open position" stats are multiplied by 7x by the office of labour, with the reasoning that "not all open positions are advertised". This is in fact false. Not only that, but many advertised open positions are not actually open but merely advertised as such for different purposes, like pumping the stock price or hoping for a unicorn candidate. So it is not at all 750000 open positions, but AT BEST 75000. Although the "Fachkräftemangel", literally "Specific Forces Lack" (i.e. lack of qualified employees) has been touted for decades in German media, the historic development of average salaries disproves this: There has been no net increase of salaries in decades (net meaning when taking into account inflation). If everyone kept their salaries constant but one single company would increase them, we should see a net increase, yet there is none. And related to cost of manufacturing: I have seen some companies in Germany successfully compete on cost with Chinese companies, even for simple things like mild steel punch-parts: Punch-presses can make up to 4000 parts per minute (not a typo, the output looks like the cartridge stream of a gatling).

It's an economic suicide, not an economic crisis.

From a level high macro perspective. About the finer details I could write books. I'm a business owner myself in Germany. The focus is way too much on our industry that were created a century ago. Germany is unable to support start ups or smaller companies. We are unable to create new big tech here because of all the bureaucracy, taxes and social costs. It is easier to move the company to the US or China to grow. And many companies do that or die. In the big tech sector Germany is unable to compete with the USA. And now keep in mind that Germany produces the mirrors needed by ASML to create the machines for TSMC so that NVIDIA can create chips. It all starts here but we don't do something from it. Yes, old tech that is hard to craft and takes longer to build we are the leader with the highest quality (power plants, cars, etc.). We are also masters in high precision stuff but when it comes to innovation in the new tech and especially SW we are just way too slow. The politicians, the social laws and workers will not adapt until we can't afford beer anymore. That's the problem when you are too succesful for too long. New hungry groups overtake you (just ask Yahoo). In that regard the US way is better. They breed technology (and thus companies) faster than we do. We just need more crazy in Germany, people who dare, people who may fail without judgement and a government who actually wants a great country. And that better before Made in Germany means what it was originally meant to say.

As someone from a formerly industrial region of the US (NE Ohio), I can tell you that all of this is just sugar-coating. Milking a brand name only goes so far - just ask Disney. Even if outsourcing brings value to shareholders in greater NYC or California, training your replacement is just as ominous as it sounds.

"Garbage goods" are in the highest demand, because avg people cant afford quality

The main issue that I, as a young german with a university degree, see in the current social and economic climate, is the fact that those in charge (be it politics or those running big companies) have not realised who we are, and what we can do. They operate under the assumption that we, the young people of this country, can be shouldered with the issues created by laziness or incompetence, by corruption and arrogance, of the previous generations. They think they can just move business overseas to save a few bucks here and there, they think they can rule over us and charge us unlimited taxes to pay for all their frivolous spending and their gifts towards the pensionairs, and we'll just have to take it. But that's not who we are. We are smart, capable and resilient - we are not lazy, weak and stupid, like they think we are. We are also well connected, we know many languages, we know and understand other cultures and we thrive in foreign environments. So we leave. One after the other, we pack our stuff and move to places that value us for who we are, for what we can do and for what we bring with us. And that will bleed this country dry. No one I know from my engineering class is planning to stay in the country. Most of them want to move to switzerland, some go to china, another popular choice is norway - The middle east is especially attractive for my friends who have family roots in this area, so a few of them also plan on going to dubai or the UAE. Those places have understood that we are not the boogyman for decades of bad policy. I won't pay my parents retirement through the corrupt and inefficient pension system. I'll send them money from switzerland every month when they retire. It's not only going to be cheaper then the current german system, but it will also assure it actually goes to them, not someone who has never worked a day in their live and recieved their pension as an election gift. What will come afterwards? We'll see. But I'll be watching from afar, like many others.