The deindustrialization of Germany
politico.euI have tried to go against some of the arguments because some are wrong, some are okayish, and some are just plain wrong, but I gave up. The article moves all over the place pulling random facts from all kinds of places in support of the idea that Germany is declining. Maybe that's true, maybe not. This article appears not rigorous enough to come to a right conclusion.
Right, I have the same impression -- it's really all over the place.
Anyway, the absolute key issue seems to be energy costs. If they hadn't skyrocketed, this wouldn't be happening.
Not just energy but specifically access to natural gas. Even when not burned for power and heat it acts as an essential feedstock for much of the German chemicals industry. With flows from Russia being reduced or eliminated there is no choice but to relocate production.
And the reason would be that profits were frontloaded and needed reforms were delayed.
Germany had a pretty audacious but absolutely achievable renewables plan 15 years ago but Schroeder & Merkel canned it for cheap Russian Gas and now that the price for that has become apparent there wailing and screaming. It’s just normalizing - if the original plan had been pursued, profits would not have been that great but the cost of adapting would have been staggered too.
Now the bill is due.
You're missing the point. Renewable power generation is nice but it doesn't help with chemical manufacturing.
Not missing the point at all. it’s two different issues and the same root cause.
Availability of sufficient power reserves not bound to Russia would alleviate many industrial cost issues right now. Costs are up primarily because cheap power is gone.
The chemical industry requiring gas is a separate problem with a similar root cause - supply monoculture. Germany built its first LNG terminal last year, before that it was Russian gas because it was cheap and it was betting on Northstream.
Lack of supply diversity, failure to plan, ideological blinders and good old corruption.
The article is missing the point by failing root cause analysis.
LNG imports won't make chemical manufacturing viable again in Germany. Too expensive. Those industries will relocate closer to the sources where they can connect directly to pipelines.
Indeed. People miss the point that metal smelting and chemical plants are built around gas and can't switch to electric over night. Basically entire sectors of Germany's economy have made themselves dependent on that sweeet cheap Russian gas.
Your missing the parent's point, chemical plants can't switch over to 'electric' at all. It's physically impossible. They will still not 'switch over' even a thousand years in the future.
The German government is subsidising gas consumption by industry very heavily at the moment to prevent this.
A press release on the relevant legislation can be found here (in German): https://www.bundesregierung.de/breg-de/aktuelles/energieprei...
The most important section in this matter reads in English translation as follows:
"From January 2023, industrial customers will receive 70% of their natural gas consumption in 2021 from their suppliers at a guaranteed 7 cents per kilowatt hour. For heat consumption, the price will be capped at 7.5 cents per kilowatt hour, also for 70% of consumption in 2021. For the remaining consumption, industry will pay the regular market price."
Right but that level of subsidization is unsustainable. What is the end game? Cheap Russian natural gas is unlikely to return soon enough to save the German chemicals industry.
Since the beginning of the year, the wholesale gas price in Europe has already returned to the level seen before the Russian-Ukrainian war.
See: https://www.bundesnetzagentur.de/DE/Gasversorgung/aktuelle_g... (in German)
Same here. It reads like a huge list of cherry-pickings.
You'd think that quoting facts would strengthen ones argument, all these tiny and sometimes very specific facts with no context had the opposite effect.
The article was obviously about the big picture.
You get that only when you look at a bunch of "unrelated", "small" facts. If there are a lot of facts pointing in one direction, maybe there is something to it.
The other point is: That was not cheery picking. There are no other facts that would point in the opposite direction… More or less everything in Germany is in decline. That's just true. Source: I'm living here since about 40 years.
Though the article interpreted something quite wrong in the very beginning: The decline started quite exactly around 20 years ago. It was caused by the move to ultra-capitalism (the mentioned big social reforms 20 years ago), which made Germany a low wage country, which made the people poor and started an exodus of the well educated parts of society. The reforms made some of the numbers capitalists are interested in look good for some time, but at the expense of maximally "squeezing out" society. Now this short sighted tactic backfires.
By now almost 1/6 of the people here are poor (and 1/4 is at risk of becoming poor):
https://www.malteser.de/armut-in-deutschland.html
Almost nobody can afford children. ("Bio-Germans" are foreseeable dying out therefore, and it doesn't look like this is avoidable any more when you try to play the numbers game. The article showed the relevant statistic. At least we get some migrants; with children. But the "Bio-Germans" hate migrants. Also this may pay off not before one generation; we need to educate the children; but the education system is broken…)
Actually it's getting hard to even afford a living place. Liberal housing markets made space in areas of high population density so expensive "normal" people can't afford it any more. At the same time building new housing is too expensive and nobody invest in that. Which made companies in the building business die out, and even if the state would massively invest in housing right now we don't have the capacity to build that stuff. And even if we would have the firms, they would not find employees…
https://www.mieterbund.de/fileadmin/public/Studien/Studie_-_...
(Fun fact: AFAIK if Germany would build enough housing it would completely miss it's green goals, as building housing creates a lot of CO₂.)
The complete dependence on the car industry becomes a real problem at the same time. It's not only the big car manufacturers. But the largest part of "the Mittelstand" are external suppliers for the car industry… Should this implode (and it looks like that, as China is flooding the car markets, that's a fact) this will have catastrophic results for Germany. We simply don't have anything besides the car stuff. All we've got is already gone. And what's left is leaving because of he astronomical energy prices.
Big players are moving elsewhere, the smaller ones just die. Result: More people becoming poor, which just accelerates the downward spiral.
In regard to modern tech, like IT, Germany is a developing country. We're completely depended on the US and Asia in this area! People are making jokes about "Russian computers"[1] but the sad truth is we couldn't even build such a thing on our own.
In the last decades the education became completely messed up also. They tried to make everybody go to university; which destroyed the previously high class educational system. By now even the firms offering apprenticeship in handicraft trades complain that you can't find people skilled for that as the people coming from school can't properly read, write, or do basic calculus. (Source: I've talked to people offering apprenticeships, not only once, and I've had some contact to the youth.)
At the same time politics try to just close their eyes to most problems: If you listen to the local propaganda "everything is good" or, currently, "It's Putin's fault!". (That's not completely true, of course, there is some critical thinking even in mainstream here and there, but they hide it usually under a really large pile of straight propaganda; and it became quite seldom. This wasn't always like that. Even the state media was much more critical 20 years ago. By now it's obviously just coordinated propaganda. We actually pay over 10 billion Euro for our state propaganda…)
The article was actually refreshing unpolitical. You usually don't see such "pure" recitation of facts in the local (and especially state) media. (I was waiting the whole time while reading when we "get to the meat" and I get informed what we should buy to safe our souls, or who to blame for all the problems, but to my surprise this part never surfaced. The article looked almost like proper journalism from decades ago).
Just naming those facts is actually considered "right wing activism" here in Germany. You will get canceled quite instantly for saying the things the article said if you state such stuff for example as comment in some of the mainstream media outlets. Yes, they cancel for reciting facts. Especially if the recited facts have potential to "irritate people", and you present some proper numbers to make your point.
(Disclaimer: I'm not supporting any political party any more. I was once "leaning to the left". But the lefties are by now the same scammers as every other political movement. All these people in politics just care about redirecting state money into their own pockets. No difference the "color" or "side" of the political movement. Kleptocracy in it's final stage. Peak capitalism. This won't end good… And if there wouldn't be the language barrier I would actually start to consider to move to China. It's getting noticeably worse here and while looking at the current state of affairs it foreseeably won't get better during my lifetime anymore.)
[1] https://www.heise.de/news/MIG-Akinak-Russlands-selbstentworf... (See also the comments!)
As a Dutch person who is often in Germany, I agree with you that Germany feels in decline, but we need stronger arguments for or against it. For example, not the whole of Germany is about manufacturing cars. Carl Zeiss, for example, is a big company doing state-of-the-art work.
Do you know by the way why Germany and software don’t go well together? What do you think?
>Carl Zeiss, for example, is a big company doing state-of-the-art work
Yeah, but how many middle class families, can these niche super-high end sectors making state of the art optics for the semiconductor industry, feed vs the automotive and industrial sector.
What will happen to Germany's famous manufacturing sector based middle class? Have you seen the job requirements for working at a company like Zeiss? It's MSc and above. All those factory workers can't go get a PhD in optics and physics and switch to designing mirrors and lenses.
It will mean a speedrun of UK's deindustrialization which itself went horribly, with dead cities, homelessness, unemployment and drug abuse. Or it will be like current day France with constant rioting and looting as all those cheap migrant workers Germany invited for their factory work, will be left without jobs.
So the way I see it, the German gov is stuck between a rock and a hard place, needing to use taxpayer money to subsidize a manufacturing industry that depends on cheap labor and cheap energy, to stay in Germany and not off-shore immediately and create mass unemployment.
> For example, not the whole of Germany is about manufacturing cars.
Sure! But it's a really substantial part. If this branch of "Germany-AG" gets into trouble this will have noticeable consequences.
> Carl Zeiss, for example, is a big company doing state-of-the-art work.
There is always some company which makes good money and is important. The point was about the big picture. And by now even the usual big players, which are "too big to fail" and are strongly supported by the state, start to get nervous. The article cited quite some of the most important players and some of the most influential economy think tanks.
> Do you know by the way why Germany and software don’t go well together? What do you think?
Complicated question. I don't know, to be honest.
It's not like we don't have any SW industry. But it seems not to catch up.
From the global viewpoint Germany has SAP, but else?
I don't think it's because we "can't do software". But it seems we can't do any relevant software.
Two points come to mind:
We don't have a culture of "pure software products". Most SW is in industrial applications. But this SW isn't very visible, and most of the time it is considered just a secondary or even tertiary part of a product. In the eyes of the management it's often still "just a byproduct" or even "pure cost". The car people for example really didn't get it until just lately that SW is now a primary sales argument. They're still trying to catch up. But actually it's quite laughable what they're doing because they still think you can "produce SW as any other car part"… Same goes for a lot of other companies. SW is just a matter of expense. They don't try to innovate here, they preferably would order somewhere some box with the "needed parts" in it and "concentrate on their business".
Likely related: People who "built mostly machines until now" don't really know how to build SW. So even if they realized that they need SW to make their products competitive they don't know how to get there.
The other thing is: Nobody here really tries to compete with the leaders on the world market. There is no motivation to do so. Even the state buys everything from US companies.
There is at the same time almost no support for local SW companies.
The only exception I know of is actually gaming. Germany invests some (imho symbolic amounts of) money in local game developers. But there are no (proper) big state financed projects that try to create something in the business and/or mass market related sectors.
There are some projects but all the money gets wasted on feeding the big industry players like Siemens or Telekom—which won't produce anything in the end, like always here when it comes to this kind of projects.
In my opinion Germany could actually do something about the software industry issue. We were able to build high-end machines (at least in the past). Software is "just" a different kind of machine… But as long it's politically not wanted to compete with the US software industry nothing will happen, imho.
Germany could inhabit a quite interesting niche, if they would take it serous: High-quality, actually secure, and privacy oriented software, in the high-price segment. This is an area currently under explored. Everything else from the competition is optimized to be cheap, just about bearable from the quality standpoint, and of course it's very insecure. We can't compete with that. But we could compete with the others doing the opposite. (Biggest problem would be to create a market with demand, as most buyers currently also only look at the price tag. One would need to change that, with really outstanding quality. We have here still some good foundational research, also when it comes to IT and software. So we could try to tackle this from that angle.)
It's directionally correct though, no? What's the case to be made that Germany is ascending? The fact that most German billionaires inherited their wealth is pretty telling I think.
It shows that inheritance tax in Germany is too low and that unfortunately there is no longer a wealth tax.
Or just hike the capital gains tax. Those billions of dollars have to be put somewhere, and the ultra-rich aren't going to hide it under the mattress. Inheritance tax is fairly easy to avoid with sophisticated tax planning.
Since 2015 I can’t remember Matthew Karnitschnig writing a neutral or even positive article on Germany. The sky is always immediately falling. Back then it was of course the refugee crisis and other assorted culture war nonsense, but now he seems to be retooling.
Honestly, I've never seen a good article from Politico eu.
Politico is owned by Axel Springer, which is the German equivalent of Fox News, if that explains it.
I keep seeing people saying this about Politico and it's total FUD. I have friends who work there and it's pretty firewalled from Axel Springer. This conspiracy theory about the Politico portion seems to have started in r/Europe and r/WorldNews a couple months ago and kept getting repeated since.
Matthias Doepfner’s mails and chats including pressure to upsell the FDP in Springer’s papers leaked in April and were widely reported. That’s not a conspiracy theory. If it were, Doepfner could sue. He didn’t.
https://www.zeit.de/2023/16/mathias-doepfner-axel-springer-i...
Not denying Axel Springer's practices in Germany.
I'm just calling it as I know it having worked closely with people who currently work at Politico or used to work at Politico,
What happens in the future I can't predict, but were there to be any kind of meddling in a HEAVILY AMERICAN newsroom would
1. Be very openly reported on by their competitors
2. See a massive amount of disgruntled ex-employees leaving for Axios (eg. the exodus at Protocol), The Hill, etc.
3. Wokld be talked about openly as a lot of us have worked closely with Politico members.
So Döpfner (who is on record ordering his "journalists" to push the FDP in the last election) just bought Politico and doesn't make sure they follow the directions he sets for all the other publications owned by Springer? Seems unlikely.
A firewall operates purely in the physical world and relies on immutable properties of the physical world to function. To use it as a metaphor in the intellectual/political world (where nothing is immutable) is exceedingly unhelpful and I would say, often deliberately misleading. There is no 'firewall' inside Axel Springer, there is no 'firewalling'. Talk like that is pure nonsense.
the name of the publication has the word "politics" in the title?
Politico is DC slang for someone who works politics adjacent (hence why their competitor "The Hill" is named that)
Politico started as a blog and newsletter on the Hill back in the late 2000s/early 2010s where we'd leak gossip, but they had amazing product-market fit and ended up opening an EU office a couple years ago (lots of Hill adjacent people also worked in Parliament and Bundestag via early career Atlanticist programs).
A couple of my own quotes have ended up in Politico
how many planets are there, mr dice?
[rolls dice - dice gives a 6]
unbelievable ... not 3, not 15, but 6 - that's remarkably close to 8!
you're some smart dice, aren't you!
I found the article quite good but has missed a couple of points that need to be mentioned:
1. The attitude of the average German consumer
It seems to me that one of the national sports in Germany is to find cheaper deals for pretty much anything (and then brag about it). Even if it's fractions of a euro! After trimming down on everything that they could, the manufacturers and service providers had to finally reduce quality. This happened to such an extent that the famous "Made in Germany" is now meaningless, if not worse.
2. The attitude of the average German manager
"I am your boss, you are the employee, now shut up and do as I say" attitude does not work well in knowledge-based industries like Software. And I believe this is one of the reasons why Germany is behind in digitalization, let alone in digital innovation.
1. Made in Germany for consumer products might be worth less today but the export of industrial supplies like machines, chemicals and materials are much more important to the economy as a whole. Outside of Germany it is still quite respected - to the point where foreign companies give themselves and their products German sounding names while slapping German flags on their boxes to sell more.
2. Why software Made in Germany doesn't work well has a number of reasons but I'd say that it is primarily because it is much harder to raise capital for things that only might work 1 out of 50 times. People who start businesses are much more risk-averse and most try to be profitable or self-financed from year 1. This makes them uncompetitive in innovative sectors.
1. You are correct that German industrial exports are highly respected. The issue is manufacturers in other countries (eg. Poland, Czechia, Hungary, Türkiye, China, Romania, Spain, Mexico) have caught up. And oftentimes those manufacturers are themselves German companies. This has in turn commodified a major portion of the German industrial base.
2. France has a similarly ossified financial culture, but has a much more robust tech industry compared to Germany (eg. Ubisoft, Datadog, Capgemeni, Dassault Systemes, Dataiku, Alcatel-Lucent, Thales, Orange, etc)
Germany has a strong base, but some reform is absolutely needed to upskill their economy.
Germany has SAP, ...
But that's just 1 champion (well, actually 2 because Siemens has a robust R&D presence) whereas there are multiple in France. In general, R&D in the software and electronics space seems stronger in France due to the robust MIC, Aviation, and Telco sector spending a lot of money on R&D
I think he meant SAP but in a satirical way
> I am your boss, you are the employee, now shut up and do as I say
This would also not work in engineering and never did. In fact, it's likely one of reasons why german engineering was so good: because people would (and still do) tell their boss bluntly what is wrong.
Can confirm this in science too. German masters/PhD students are much more willing to correct the professor on a topic, then I. England. N=1, of course.
Well, I'm just reading the Oppenheimer biography, who studied in the US, UK and Germany, and he came to the very same observations. And tried to encourage his students in Berkeley successfully to be more critical and interrupt the professors.
I don’t have an informed opinion, but with my limited interactions with Germans, the problem with software engineering is that it is not considered a high status profession. The smart German would rather go into law, medicine, accounting (!!) or teaching, than into software development. It is true that before Brexit salaries were much lower compared to the UK, and that only recently, after Covid, they skyrocketed. So this perception may have changed for the younger generations.
Mind, this is my poor man’s sociologist analysis, but it seems that they rely heavily on foreigners, which are very hard to attract because of the language and bureaucratic barrier. From what I see, even companies that pay good salaries (say ~100K total compensation for a senior) mainly employ foreigners.
>It is true that before Brexit salaries were much lower compared to the UK
And people from the UK say the opposite, that engineers are not respected and paid in the UK the way they are in Germany. I think the low/high PoV of your salary depends in which bubble you hang around. Every market is flooded with low pay offers, but yes, I feel like in Germany, unless you work for big-tech, SW engineering is pay way less compared to other positions, in contrast to the US where tech wages rule over the rest.
>only recently, after Covid, they skyrocketed
I don't think you're correct, maybe that was true at the height of the market a year or so before, but recently after the tech market fell and layoffs happened, I see most companies rarely hire and when they do they exclusively want skilled seniors for mid-level pay. I don't see those skyrocket salaries anymore after the market collapsed.
Same info I got when I talk to people who recruit/hire: a year or so ago they were struggling to hire and had to increase pay or hire juniors and train them, but now they get a tone of experienced applicants for every opening that they can dictate pay.
> And people from the UK say the opposite, that engineers are not respected and paid in the UK the way they are in Germany
I was referring to software developers. Before 2016-17, a software developer in London would make twice as much as in Berlin. Now it seems you’d make slightly more in Berlin than in London.
> I see most companies rarely hire and when they do they exclusively want skilled seniors for mid-level pay.
I know that Zalando, Delivery Hero, Hello Fresh and other similar companies pay more on the entire scale (from junior vs junior to principal vs principal) than comparable companies in London. Salaries skyrocketed in the sense that just a few years ago they would be lower than in London. I know Meta pays higher salaries in Germany than in the UK for fully remote roles (I was told by an internal recruiter last year).
It’s possible, though, that if one is in the lower part of the distribution their salary may be higher in London, but I haven’t investigated.
> Now it seems you’d make slightly more in Berlin than in London.
Out of curiosity, got any sources to back this up?
> Zalando, Delivery Hero, Hello Fresh [...] pay more on the entire scale [...] than comparable companies in London.
The thing is London has a lot more tech jobs than just overrated web-shops and shitty food delivery apps that depend on underpaid bicycle delivery workers from abroad to be profitable (basically modern salve labor).
In London you have big-oil, big-real-estate, all the FAANGs, finance, HFT, AI, med-tech and many opportunities to be a contractor for 600 pounds/day in the City, opportunities far above what working for some web-shop and food-delivery app pay in Berlin, as those are mostly body-shop visa factories anyway that burn people out (from what I've heard).
I'm not advocating for one or the other, I don't have a dog in this fight, but the upper end salaries in London vastly overtake the upper end spectrum in Berlin. And anecdotally, the last salaries offers I got in Berlin were all laughable. I got better offers in the semiconductor industry in Dusseldorf working less hours.
I’m not arguing the morality of food delivery platforms (and I’ve only mentioned one because some friends work there), I’m saying that they pay better than in London.
In Delivery Hero and Hello Fresh, I know seniors making 100K, staff engineers making 150K, so I suppose principals would make 200K. This is more than similar roles make in London. Also, talking to people that work there, I wouldn’t call these places body shops, rather they seem to work less than I do (maybe you could argue they are visa factories, because they don’t employ many Germans, even though EU citizens don’t need visas).
I think I am in the upper end of the spectrum in London (>200K), and I am exploring the possibility of leaving the UK. The only offers that come close to my current compensation are from Germany or the Netherlands. Taxes are also lower than in the UK, which was surprising to discover. Hedge funds aside, in London I get worse offers, around half of my current income, like in Spain.
Finally Berlin is relatively poor, I wouldn't be surprised if salaries were higher in Bavaria, Hamburg or North-Rhine Westfalia.
>In Delivery Hero and Hello Fresh, I know seniors making 100K, staff engineers making 150K, so I suppose principals would make 200K.
Question, are these salaries documented anywhere or is it your insider knowledge? Also, I don't doubt people with such wages exist in Berlin at these companies, but how many seniors and principals are those food companies hiring now in this economy? I sense it's not easy now to get one of those six figure jobs.
I helped two friends in their negotiations, so I know exactly how much they make (between 140 and 160K total compensation). They were hired early this year. I also interviewed for similar companies in Berlin and Munich (I refused two offers and I was discarded by one company).
On levels.fyi, salaries seem to be slightly lower, but still in 6 figure territory: https://www.levels.fyi/companies/delivery-hero/salaries/soft...
https://www.levels.fyi/companies/hellofresh/salaries/softwar...
https://www.levels.fyi/companies/zalando/salaries/software-e...
According to their websites, Delivery Hero and HelloFresh are still hiring senior, staff, principal and senior principal engineers.
Anyway, I know many “average” engineers making 80-100K as seniors in Germany (I mean people that don’t do leet code, that don’t negotiate much, that don’t care too much about their career), in hyper unionised companies with massive benefits and ironclad job security.
>I know many “average” engineers making 80-100K as seniors in Germany[...]in hyper unionised companies with massive benefits and ironclad job security
Do you have any examples or info on which are such companies please. AS an average engineer looking for senior pay, you got my interest.
Mind, I’m not using the word “average” derogatorily, I’m referring to good senior developers that simply don’t follow trends, don’t do leetcode and don’t spent too much time chasing pay rises (I unfortunately had to, because of my family’s economic issues and because I live in the UK, where you either own property or you can’t live like a civilized man).
I know people working for BMW, VW, Bosch, NXP, Infineon (some in Germany and some in Austria) earning that much. Some do security, others embedded, others CRUD stuff in Go or C#.
I don’t know if these jobs require Germans to follow the German corsus honorum (Gymnasium, BSc, MSc) and so are not accessible to those that attended a Realschule (foreigners seem to be exempted).
> "I am your boss, you are the employee, now shut up and do as I say"
I don’t mean to be disrespectful in any way, but (there’s always a but after that opening) if that’s you’re experience working in Germany, I’m afraid you’re either ignorant of culture in other countries, or not working in a job with a lot of impact, or responsibility. The German work culture is distinctly the opposite, namely people being blunt in what they say and brutally honest with their superiors.
>This happened to such an extent that the famous "Made in Germany" is now meaningless, if not worse.
This was originally an anglo pejorative meant to denigrate the quality of German goods. Mild irony.
>2. The attitude of the average German manager
>"I am your boss, you are the employee, now shut up and do as I say" attitude does not work well in knowledge-based industries like Software. And I believe this is one of the reasons why Germany is behind in digitalization, let alone in digital innovation.
My experience has been the complete opposite.
Could you provide some references that back up your claims?
haha number 1! 20 years later i'm still traumatized about my boss who would spend the whole lunchtime speaking about gas prices
We're definitely huge fans of paperwork here and it hurts a lot.
Want to sell something? Company registration takes months, just getting a business tax ID was 6 weeks for me. To sell electronics, register with Stiftung EAR, then find an intermediary to get you a WEEE-Nummer and report monthly (!) sales figures of all your device types. Just that registration costs 1k and 8 weeks. And don't forget your battery and packaging license!
By comparison, similar WEEE fees in UK are 30 pounds and in Estonia are 12 euros, no wait.
But the real fun starts if you hire someone :) The paperwork there is a magnitude more.
I don't think we're doomed though. The schools are packed with kids, education is free and good, health services are not a concern (looking at you, US), society is healthy. I think we'll manage :) Hopefully no more self-inflicted energy crises in the works.
> We're definitely huge fans of paperwork here and it hurts a lot.
> society is healthy
no pain, no gain :)
there's probably a terry prachett quote attributing bureaucracy to the stability of a large-scale civilization
It has a nice, horrifically frustrating, but nice way of slowing things right down. Its inefficiency is one of it's perks in my opinion. It buys people time to think before a piece of legislation is enacted, and when it finally is, people are already over it.
"But the real fun starts if you hire someone :) The paperwork there is a magnitude more."
I've been very happy with Sage, an online SaaS to manage employees and their payments, taxes, and related paperwork.
And obviously the reason is the lack of labour reform and not the billions in handouts currently given by the US and China which the EU refuses to match because of its brain dead insistence on undistorted markets and fiscal rigour. Ah Politico, such well researched and reasonable journalism, it warms my heart…
Is this the same Germany that last I know allowed bribes and kickbacks on international sales to be tax deductible? We lost so many contracts because the things the Germans did were illegal for a USA company.
https://www.bloomberg.com/news/articles/1995-08-06/germany-w...
I have the typical American of German descent hate for Germany because they threw my family away but now are open for everyone else to come live there (making it a huge 'fuck you and your family specifically love Germany'), but also how truly horrible they behave when it comes to business.
> I have the typical American of German descent hate for Germany because they threw my family away
I've never seen this sentiment expressed before (but I'm neither of German descent nor US American). Care to expand further ?
> because its brain dead insistence on undistorted markets and fiscal rigour
The issue lies in the fact that the EU is comprised of numerous countries within a single market. When one nation begins to subsidize a company or an entire sector, the other nations are left powerless, merely watching their own companies struggle to compete against those bolstered by government subsidies. It becomes a game of pouring government money down the drain and destroying any semblance of free market mechanisms.
The US is attracting so many companies currently because they are giving out the largest government subsidies. It's nice that you're advocating for more free markets but governments are moving in another direction. And either a country can match those subsidies or they will see their industry relocate to another one.
You should check out how EU state aid laws work. This is exactly the issue they are addressing and it is not true that we have seen a significant "subsidy race" between different EU countries in the recent past.
Why aren't other EU countries facing the same problems? Also, from the article:
> BASF opened a plant near Dresden that makes cathode materials for electric-car batteries just two weeks ago and has pledged to keep investing in its home market. To secure such commitments, however, local and federal governments have been forced to offer generous incentives. BASF will receive €175 million in government support for its new battery operation, for example.
> Similarly, in June, the U.S. chipmaker Intel secured an eye-watering €10 billion subsidy for a massive new factory in the eastern city of Magdeburg. That translates into €3.3 million for each of the 3,000 jobs the company has pledged to create.
Nothing about European markets is undistorted. The most distorted of all is the view that Europe is declining out of some moral stance. The classic example is how California and the US had to go clean up Volkswagen because local regulatory authorities weren't up to snuff.
what are you referring to with "billions of handouts"?
The Inflation Reduction Act in the USA and the equivalent measures which have been taken in China but don’t have a catchy name. Both countries are currently giving subsidies to companies at an unprecedented rate.
There used to be a lot of opposition to these kinds of subsidies in the US until China started absolutely kicking America's ass because they subsidize their industries.
Private enterprise really can't compete with governments, and even less so against governments with their own sovereign currencies and the ability to subsidize forever.
Opposite lots of commenters here deriding the article as "all over the place", I thought it was very well-written and comprehensive. Seems like there are concerns across a wide swath of companies and industries in Germany.
Reading between the lines, the proposed solution seems something like lower corporate taxes (currently making decamping to Dublin more attractive) and lower energy prices.
The risk brought up is that if things continue it will likely lead to increasing blaming of immigrants and a rise in the far-right AfD party, which has already started.
Yes. The worst is yet to come.
- Germany is heavily reliant on industry (like Autos)
- Cheap energy has ended due to war in Ukraine
- The available replacements are going to be even more expensive (and they are still closing more nuclear plants)
- The production costs will increase reducing their competitiveness even further
- The competitives was bad even before this (VW vs Tesla anyone?)
- Once the huge layoffs and closures will begin, the entire economy will enter recession.
Industry-focuses businesses are now low-margin and high-competition (competition mostly coming from Asia). The same is happening here what happened during the shift of Agriculture economy into Industrial economy.
And the shift to services (tech/software specifically) was pretty much non-existent. Also, it's unlikely to become any better due to alienation of investors (who wants to invest in a country where everybody is taxed and red-taped into oblivion?).
So... who nows. Germany is probably going to pull a "Greece" on us :).
> - Cheap energy has ended due to war in Ukraine
While there is some truth to that, energy prices are lower than at the start of the war.
> - The available replacements are going to be even more expensive (and they are still closing more nuclear plants)
There are no nuclear plants left. And Germany just got 12.6 billion from auctioning of building rights for 4 new wind parks (with capped price limits of 6.3ct/kW/h.
> - The competitives was bad even before this (VW vs Tesla anyone?)
How is that? VW has a quite broad electric car range by now. Tesla is hip (which VW also tries to be) but that's about it
> - Once the huge layoffs and closures will begin, the entire economy will enter recession
The german labour market is quite strong (except maybe construction, but there's not many germans working there anyways). Problem is rather that too many people are retiring (and that the average age is so high)
> So... who nows. Germany is probably going to pull a "Greece" on us :).
The budget of the german state is almost balanced. How does it look in the US?
> The budget of the german state is almost balanced. How does it look in the US?
While I agree with the sentiment - you tell me when the USD is going to lose its global status, and I'll tell you when we need to be concerned about the budget deficits.
Also gutting labor rights, but I suppose that's always suggested by liberals no matter what
What about employer rights? Right to fire poorly performing schmucks?
Once you're the schmuck, or your company starts laying off, you'll start appreciating it. (As has recently happened in my family)
In addition to this general malaise, the EU Cyber Resilience Act (CRA) is going to have a big, negative impact on all of the EU, especially Germany, and especially the software industry. The CRA itself is insane, requiring, for example, that conforming software phone-home. Which is, of course, the opposite of what we should be pushing for. Note that something similar is probably coming to the US in the next few years.
I learned about this today from Eclipse Foundation executive director Mike Milinkovich's excellent video/tutorial/warning on the subject: https://www.youtube.com/watch?v=AmsM5_5QO5A
When you look at open source AI, for example, EU laws are a huge problem: Not only the act you mentioned, but also GDPR, where it is not clear so far how the "right to be informed" or the "right to deletion" can/must conceivably be implemented. (From my interpretation I also don't see how OpenAI can conform to the "right to be informed" without publishing its training data).
And of course the AI act, which might make it possible for the publishers of open models to be sued if a third party misuses it: https://techcrunch.com/2022/09/06/the-eus-ai-act-could-have-...
There is a similar recent article in German from the "Berliner Zeitung"
https://www.berliner-zeitung.de/wirtschaft-verantwortung/dei...
The linked article is mentioning additional factors:
- tax incentives and favorable legislation offered in the US and China.
- drawn out planning and approval procedures in Germany
- no more cheap natural gas from Russia (i guess that was a big hit for the chemical industry)
- cheaper energy (also cheaper green energy) in the US and China.
... and Intel is building one big fab in Magdeburg - that one is costing 17 billion euro: https://www.intel.com/content/www/us/en/corporate-responsibi...
So maybe not all of industry is leaving.
I'm terribly suspicious when an article quotes a CEO saying "profits aren't where they should be".
God only knows what he thinks his corporate profits "should be", but I'd bet it's a lot higher that you or I would guess.
Germany is extremely well positioned to rise again economically in the next five years or so. It's attracting migrants from all over Europe, it's located quite nicely in the middle of the continent and it's currently building a massive capacity of renewable energy.
The only real problem right now is efficiency of spending. Nearly all public sectors (defense, housing, transportation, education, healthcare) bemoan significant lack of financing and workers. Yet, Germany spends enormous amounts of money and employs record levels of workers there. It's like all the money and workers just vanish. This leads to the situation that it's currently difficult to hire in Germany.
This process leads to the attraction of skilled workers especially from eastern Europe. I don't know where this ends, but I doubt the spending and employment will get significantly more efficient. Instead, Germany might very well attract additional millions of well-educated Poles, Ukrainians, Romanians, etc.
I wouldn't be surprised if by 2030 we see a Germany with a population of 90M people absolutely dominating the European market.
I help German immigrants for a living. It's currently one of the hardest countries to settle in due to the archaic and labyrinthine bureaucracy. Berlin's immigration office is completely unable to handle its workload, delaying immigration to the point people just give up and leave.
I've been here long enough to apply for citizenship, but Berlin has a backlog of 26,000 applications and literally refuses new ones until they centralise the processing. The new central office is expected to handle 20,000 applications per year.
This is the city where you need an in-person appointment weeks in the future to register your address, a key process that many other things depend on.
All of this can only be done in German, of course.
If Germany wants to attract talent, it has to meet it in the 21st century.
Maybe Berlin has just reached maximum occupancy? I mean, we'd all like to live in our favorite dream city, but how long is that sustainable long term, if we all move to one city?
Germany seems like it wants to have its cake and eat it too. It wants more migration to put downward pressure on wages and upward pressure on housing prices, but that's it, it does nothing to actually make life pleasant and attractive for the people moving there to live and work, in terms of taxes, bureaucracy and housing, so you just feel like cattle, exploited for your ability to pay taxes to the state and to pay someone else's mortgage.
I don’t think the city is full, just poorly run. The rest of your comment I agree with though.
>I don’t think the city is full
Yeah but then why is finding housing nearly impossible? It's not like tones of apartments are sitting empty without occupancy because "the city is inefficient but not full".
I mean Berlin is just catching up to other European capitals in that regard. The weird thing about Berlin was always how cheap it was, which was basically an accident of history.
Berlin is not full. The bureaucracy is inefficient and understaffed. Almost all of it is still paper-based and rely on in-person appointments. Like I said, it needs to enter the 21st century but it's just not happening.
This was a problem a decade ago and nothing really changed.
>Berlin is not full.
Is it tough? There would be tones of empty rental apartments on the cheap if it weren't full, but the obscene state of the housing/rental market right now vastly contradicts you, and it's not because of bureaucracy, it's because there's too little places to live relative to the insane demand of people wanting to live and move there. Maybe you live in a bubble and haven't looked at the rental market in a while?
Berlin is infamously badly governed. It should not be considered representative of Germany as a whole.
Other Ausländerbehörde are just as bad, although other services are indeed far worse in Berlin.
i would not be so hopeful. A big problem is that germany does not operate in the global lingua franca - English. This really shows when countries like Australia and Canada - combined, both have a population less than germany’s - are able to attract the best and brightest from around the world.
Another problem is one that plagues all old world countries - societies are based around ethnicity.
These combine to mean that Germany and the EU in general are not attracting the best from abroad. The region is often the second or third choice of the educated migrant. Don’t believe me - look at the EU’s own internal migration numbers and the stats for immigrants from outside the EU. Internal EU migration is pretty low relative to countries like US (states vs countries, sure) and the immigrations from outside are largely poorly educated.
This shows in Germany’s immigration policy - they have been reducing barriers to entry for over a decade now and are yet struggling to hire foreign talent. This begs the question - why?
Eastern European people are very much german orientated. Most speak better German than English. So no you are not right. Germany is immensively popular by tech migrants from Russia. Poland, Hungary, Czech etc.
> Most speak better German than English.
That's not true, at least not in Poland.
Also, current German take-home salaries for coders are lower than Polish (gross amounts are similar, but in Poland a lot of coders are self-employed, with very lox taxes), with vastly higher costs of living. If anything, Germans programmers should emigrate to Poland - they're not getting a great deal in their country.
I agree, actually think Poland is one of the best countries in Europe for future digital sector, it's more open to dealing in English language and more open to change when it comes to business. As levels of living rise, I'm fairly confident it will be attracting more and better talents than other old EU countries. Other East Europeans are treated much better in Poland than Germany (West Germans don't even treat East Germans that well).
I’m intrigued — can you provide some numbers, e.g. some typical hourly rates and/or monthly wages for some typical programming jobs? Or maybe you have some sources (I’ll be able to help myself with Google Translate if they are Polish).
Bog-standard seniors in Poland typically make 18k-25k PLN per month, which translates to 216k-300k PLN per year. If you're self-employed in software, you will pay roughly 2k of flat fees per month (health insurance, social security etc.), plus a flat 13% tax. So, your net take home pay will be 163k-237 PLN, or 13.5k-19.75k PLN per month. That's 3k-4.43k EUR take home pay per month. My understanding is that it's not that much lower than what you can get in Germany, while real estate and other costs of living in Poland is much cheaper than in Germany (real estate in Germany is probably easily twice the price in Poland).
The main advantage of Western Europe is the lucrative contract market, where you can make much more money than in usual full time employment. A lot of these contracts are non-remote, so you have to live in a big city in Germany, UK, Sweden etc. to get them. However, some are remote friendly and still pay 500-600 eur per day. I personally work these contracts from Poland, pay my 13% flat tax rate, and am the wealthiest person I know in my age group thanks to it. The disadvantage of this strategy is that, if the economy is in recession (like right now), the contracts dry up first.
>astern European people are very much german orientated.
Not true in Romania at all. We're latin and way more US/angloshpere oriented than German.
Where did you get your information? You're probably thinking only of the parts of the former Austrian empire which used to speak German, but the youth there is also more Anglo focused than German, and it's only a samll part of eastern Europe
It is true in Romania, too. Since the ethnic Hungarian population isn’t Latin, interest in the German language has always been higher among them, and Germany has been a magnet for Hungarian emigration from Romania. But even leaving language aside, I know a number of ethnic Romanians from Cluj and Timisoara who moved to Germany, especially Berlin a decade ago when it was viewed as the hipster capital of Europe and still regarded as a cheap place to live.
Sure, but the German speaking population in Romania is also due to it being part of the former Austrian empire, not because Romanians have a natureal affinity towards German.
In former Yugoslavia I feel like the parts that weren't part of Austria-Hungary are even more German-centric than the parts that were - Many Austrian companies (UNIQA, RBI, Strabag, Buwog, etc.) dominate the playing field while other, much bigger European counterparts like BNP (French) don't really put up a competition. (i.e. in Kosovo, part of Ottoman rule)
In summer time all you see are German, Austrian and Swiss license plates, the DACH area has always been a No. 1 destination for expats / refugees from the region and German language proficiency is quite high.
>e In former Yugoslavia I feel like the parts that weren't part of Austria-Hungary are even more German-centric than the parts that were
Yeah, but how much that has to do with the German language influence itself, and how much to do with mass emigration there due with the proximity of former-Yugoslav countries to DACH countries following the wars? For most people, being 4h drive away from home, is better than flying to Netherlands/UK, nothing to do with their preference for German language.
Plus, former Yugoslavia isn't really all for Eastern Europe. Poland, Romania, Bulgaria, Ukraine, the Baltics have little affinity to the German language and they're huge population centers.
> Many Austrian companies (UNIQA, RBI, Strabag, Buwog, etc.) dominate the playing field
Because these large and ultra corrupt Austrian companies know how to play the corruption game in the Balkans. Funny how Austrian companies are so big there but not in other countries. Why is that I wonder.
It’s not necessarily a matter of being part of the Austro-Hungarian Empire but the role of German as a major European language of culture and learning, one that for Romania’s ethnic Hungarian population was never quite replaced by French. German has been popular in Bulgaria, too, and Germany a major destination for Bulgarian emigration, in spite of that country always being well outside any German-speaking empires.
>German as a major European language of culture and learning
Maybe, but that was not my experience growing up in Romania, unless maybe you refer to some niches of highly educated and cultured people in some posh circles of academia, but I'm talking more about the average joe. English was by far the most dominant foreign language learned by the youth due to the influence of Anglo entertainment industry, followed by French as a distant second, and then German.
The fact that more people emigrated to Germany than to France or the UK (maybe, I don't have statistics) has nothing to do with people's affinity for that country's language or culture, but to the economic opportunities available to them there. Most people didn't study German before emigrating to Germany, but learned it there out of necessity. This might just be my circles, but nobody I knew growing up had any affinity or interest for the German language or German culture as it was seen as an ugly and difficult to learn language of boring hard-working people who are only famous for building great cars and for that other thing (no offence, but that was the stereotype amongst clueless young people), people only wanted to learn German to emigrate there later in life for economic reasons.
>German has been popular in Bulgaria, too
Do you have a source on that? Like I said before, a country being a popular destination for labor immigration doesn't mean that foreign language is also popular in that country.
German was and remains a common foreign language in Yugoslavian, Bulgarian, and Polish schools. Even if people might pursue English especially in their own time, they still often get German at school, which in turn equipped people to emigrate to Germany. The impact of German on the society of Yugoslavia and Bulgaria has been so strong, it’s not uncommon for a traveler to be greeted in German first even by young people, and only then will that person switch (or try to switch) to English. You make bold assertions, but other people here can see you don’t have any actual familiarity with the wider region (or even how ethnic-Hungarian schools in your own country operate).
Since when is it a problem for a country to operate in its own language? Especially one which is spoken by 100 million people? Have you considered that people who migrate to a new country for work might even try to learn the language? Who says English must remain lingua franca in Europe?
But beside all that, everyone with a basic education in Germany does speak good English if needed.
I speak German, but only after being here 7 years. Are you seriously taking the side that a new immigrant in the country should be able to navigate a complicated immigration and registration process, documents and interviews in German? It’s not an easy language to learn and the expectation should not be that you’ve somehow mastered it before moving to the country. Your second point is also irrelevant since officials in most government offices are not technically allowed to offer services in English.
If you want people to learn then offer a migration path in English and offer a state funded language course similar to Sweden’s SFI. Some Germans still really delude themselves into thinking they’re language is relevant outside of German speaking countries.
7 years is too long in my opinion, but better late that never I guess. I don't know whether Germans delude themselves about the relevance of German abroad, but I understand that some people delude themselves about the relevance of other languages (English) inside Germany.
What I say is valid for all countries, i.e. if you move to France/Italy/Netherlands/Denmark you should learn French/Italian/Dutch/Danish.
>7 years is too long in my opinion
Then you haven't met most expats in Germany, who, especially in the tech sectors in the big cities, can only manage to order a beer in German after 7 years. Which is understandable, even if you take courses, when your expat friend group is all in English and your workplaces is also all in English, there's not many opportunities for you to perfect.
Also, the necessity of learning a new foreign language and navigate a completely different bureaucratic labyrinth every time you move for work to a different EU country is what's holding the EU development back versus the US.
Imagine if someone from Ohio had to learn a new language when moving to California for a a job. As an European, I think EU countries should give up some slack on the national pride, and be more open to standardizing bureaucracy in English to gain a competitive edge on labor and capital mobility against the US, even though I know nationalistic countries like France and Austria would rather die on that hill than adopt a foreign language as an alternative to their own.
> 7 years is too long in my opinion, but better late that never I guess.
I said I speak German, not I started learning German. I don’t think C1 after 7 years while also working a full-time job and eventually starting a business is all that bad. This is the expected path for a skilled migrant to keep their visa status, there isn’t exactly the opportunity to do an immersion course. How many languages do you speak?
I didn’t anywhere allude to the importance of English in Germany outside of offering a path for immigrants since it’s somewhat of a modern lingua franca.
> What I say is valid for all countries, i.e. if you move to France/Italy/Netherlands/Denmark you should learn French/Italian/Dutch/Danish.
At least two of the countries you list offer immigration services in English. Again, no one is saying you shouldn’t learn the language.
> Since when is it a problem for a country to operate in its own language?
Since it wants foreign workers because they can't afford their own kids.
Germany is not the only country on the brain drain market, and does not enjoy a domineering position either – thus, it should make some efforts if it wants to maintain its market share.
>These combine to mean that Germany and the EU in general are not attracting the best from abroad.
How many skilled Eastern Europeans have you met who still want to move to Germany? This was the dream ~10 years ago but most white collar EE engineers I know take one look at the wages and housing situation there and make a 180 back home.
> Nearly 20 years ago, Germany overcame its reputation as the “sick man of Europe” with a package of ambitious labor market reforms
Does anyone know what those were?
The Hartz reforms are fairly famous, yes. It’s mostly social dumping. Forced contraction of actual wages through reform of the benefits plans.
It’s important to note that they are overall poor reforms and should have been nullified by the German money value shifting due to the knock off effect on the saving rate. This didn’t happen because they were put in place at the same time as the Euro and the overall imbalance in the union allowed Germany to keep an undervalued currency. In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since.
> In effect, Germany robbed all the poorer members of the union to prop up its own economy something it has kept doing since.
Those who like to bully the poorer members of the Union on the grounds that they're being bankrolled by the the wealthier states would be wise to take note of this, and take a more intelligent and informed view of EU "subsidies". The idea that the wealthier member states are showering these countries with funds out of the disinterested goodness of their hearts is not only ignorant of how these cash flows actually work in the grander scheme of the movement of money, but also preposterously naive.
The power balance is shifting in Europe against this crypto-germanocentrism, however.
This sentiment is so common in Germany. Everyone blames the European "south" for Germany's problems as if Germany was some sort of hero doing all the work.
The Greek economic crisis is a classic example. German banks mess up when they lend too much money to Greece, Germany does a bailout for "Greece", the money actually goes back to German banks. Then people have this perception as if they somehow paid for all the social services bought with the borrowed money. No, Greece is still in debt. You might complain about forgone interest but that is on the lender, who is not doing his job properly.
Let's not absolve Greece of fault. They massively lied on their data to join the euro with a financial situation that was obviously not going to work in the long run. No way would Greece have gotten as much money in the 00s had they published their real data.
That said, the German opinion on Greece was(is?) pretty fucked yeah. Especially if you look at how often we ignore the situation for the average Greek in these discussions. A shitload of medically necessary operations were cancelled in the downsizing of the Greek state, even the democratic nature of the state itself was seized by the troika.
And Greece never really got a bail out, all they were ever offered were just bigger and bigger loans. (with austerity measures attached that pushed down demand, when lowered revenues, that made it harder to pay the loans)
It's important to note the other side of the medal: Today's inflation is to a large degree caused by the expansionist money policy that was necessary to prevent a Greece financial collapse (which would have undermined the Euro as a whole). Greece financial problems were, at least to a significant degree, caused by debt-financed social expenses that are unheard of in Germany. So the conclusion that German workers are financing Greek's early retirements is not completely bullocks.
It's very important to understand that Greek's government also played the "Germany is at fault" or "Germany has to pay" card very effectively, when Germany's government played the "Lazy Greeks" card to justify their own fiscal policy.
Why are you only talking about the lender's fault when it comes to bad loans.
Because assessing and assuming risk is literally their entire reason to exist.
Why doesn't the borrower assume responsibility for taking risky loans?
Loan me 100k and find out
Because that's literally the job of the lenders.
Why should the reforms be nullified by a change in saving rates?
Hartz IV reforms pushed unemployed people back to work by reducing long term unemployment benefits to 400 EUR + rent. This certainly reduced purchasing power first (by reducing available money) but also quickly freed up social spending as employment rates soared.
That’s a classical and expected corollary to social dumping reforms intended to boost competitiveness. There is less money invested inside your own economy (that’s what the saving rate is) as you have intentionally made people poorer which leads to an influx of foreign capital propping up your currency and nullifying the advantage you were expecting on the international market.
As mentioned before Germany whose economy is extremely unbalanced and wouldn’t be viable if it used its own currency was shielded at the cost of killing the competitiveness of the poorest union members.
That's a reference to the so-called "Agenda 2010": https://en.wikipedia.org/wiki/Agenda_2010
The strategy Germany is following is to cut unit labor costs below Greece aka Germany is competing on price with Eastern European countries. This may get you the "Exportweltmeister" trophy but is is just that, a trophy. It doesn't actually benefit you that much.
https://www.imf.org/external/pubs/ft/wp/2015/wp15162.pdf
"In 2003–05, Germany undertook extensive labor market reforms which were followed by a large and persistent decline in unemployment. Key elements of the reforms were a drastic cut in benefits for the long-term unemployed and tighter job search and acceptance obligations."
Also working poor.
quote: Germany ranks only eighth in the Global Innovation Index
Is it so bad? For 83 millions people economy.
Considering that Switzerland is No. 1, Sweden, Netherlands or Singapore are all above Germany, I'd guess population is not a big factor in computing this index.
> Switzerland is No. 1
Time to rename the region CHAD I guess.
According to law only mailed or faxed responses are allowed
It took them over 100 years but finally the treaty of versailles will be implemented, for all the wrong reasons.
It's all so tiresome.
Keep in mind that politico is a subsidiary of Axel Springer, which is largely controlled by a man that has recently been exposed to have actively ordered chief editors write in support of the party of economic liberalism (FDP) before the last election in Germany. I.e. it is entirely possible that this article is also politically motivated.
I keep seeing people saying this about Politico and it's total FUD. I have friends who work there and it's pretty firewalled from Axel Springer. This conspiracy theory for the Politico portion seems to have started in r/Europe and r/WorldNews a couple months ago and kept getting repeated since.
And you are plastering this exact message all over these threads here. Makes it seem like you have an agenda? Do you have an affiliation with Politico/Axel Springer?
The political corruption and and election meddling done by Axel Springer is a known fact. [0]
Excerpt from [0] translated with DeepL:
[0] https://archive.is/g8RMu"Our last hope is the FDP. Only if it becomes very strong - and that may be - the green-red disaster will be avoided. Can we do any more for them. The only ones who are consistently positioned against the Corona Measures madness. It's a patriotic duty."
If you are reading any news site about it - it’s political to someone.
The article mentions 'high energy prices' and 'energy costs' and alludes to 'Kremlin cutting off natural gas supplies' but otherwise provides zero discussion of the overall energy picture in Europe. A couple of major issues they could have addressed:
1. In retrospect, was the German decision to eliminate nuclear power wise? Could they have squeezed another decade of power out of their existing plants, even if they didn't see that as a viable long-term energy source (having to import uranium fuel is not all that better from having to import natural gas, economically speaking)? Granted, nuclear only provides electricty, while BASF needs methane.
2. Russian gas exports to Germany have been replaced by US LNG gas exports, but the cost differential is pretty huge. Looking around, I see this site has discussed it before (Nov 2022):
https://www.politico.eu/article/cheap-us-gas-cost-fortune-eu...
That's an interesting article, pointing to tight markets being taken advantage of by European energy traders (though Exxon and Chevron shares are up 50% since the price boom, Permian Basin development, booming LNG exports, etc.). It also might explain why some European interests see a finacial benefit in prolonging the Ukraine war (i.e. keeping Russian gas sanctions in place).
3. Somewhat amusingly, if BASF moves a lot of production China, then their natural gas feedstocks will be coming from... Russia's massive Sakahalin 1 & 2 projects (built with extensive help from Exxon and Shell respectively, and ironically)?
https://www.reuters.com/business/energy/russias-sakhalin-inv...
Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.
> 1. In retrospect, was the German decision to eliminate nuclear power wise?
"The country’s Green transformation, the so-called Energiewende, has only made matters worse. Just as it was losing access to Russian gas, the country switched off all nuclear power."
> Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.
Or maybe relying so much on a partner which others have warned you about was actually the not so smart move.
Maybe blowing up the Nordstream pipeline wasn't such a smart move, after all.
Do we know with any degree of certainty who was actually responsible for sabotaging the pipeline?
It seems all evidence points to a Ukrainian op performed by a small team and minimal amounts of explosives.
Ukraine is also the only country which had clear motive and no real repercussions if found out (because already at war with Russia).
I feel embarrassed for Germany. So much pride, built on dishonesty and exploitation of customers and other EU nations. Getting to the point of implementing meaningful reform will be tremendously ugly, in a country that derives such gratification from exporting carbon-intensive industry to China. Sad.