14 ms·

Germany Falls into Recession

147 points by super256 3y ago

ChuckNorris89 3y ago
IMHO, it was already there, but it was in denial. Since covid, rents increases have far outpaced salary increases. And since 2022 so have bill, groceries, everything. But then again so is most of Europe.
- baremetal 3y ago
  >Since covid, rents increases have far outpaced salary increases. And since 2022 so have bill, groceries, everything. Same story in the US.
  - yamtaddle 3y ago
    Everyone I know who didn't go in to this with a lot of income above their spending level is struggling, mostly due to price increases in things they can't not spend money on. Housing's way up the list, and food, which, I dunno, maybe it's a local thing, but that's up a ton more than overall US inflation figures would lead one to guess. Utility prices are up, too. Basically the only things that are still cheap are optional crap. Extremely-low-paid (think: fast food worker) jobs saw a bump, but jobs above that aren't seeing a corresponding increase, so the bottom's basically just flattened and now a bunch more people are making the same money as fast food workers, which is about the same as they were making before, while their expenses are up a lot.
    - mywittyname 3y ago
      > overall US inflation figures would lead one to guess. I think part of the problem is that people see rates of inflation in the news, but their mind thinks in terms of cumulative inflation. They think, "housing has gone up 30% since before the pandemic but the government says inflation is only 9%." Even though, 9% inflation per year over 3 years is 30% total. Then there's the fact that inflation stats are an average of a "basket of goods". So housing might go up 15%, but that's offset by other items going up 2%. Then there is regional factors, and how inflation is mentally sticky (i.e., people making jokes about the price of eggs, even though wholes prices are down 80% over the past 4 months).
    - mrguyorama 3y ago
      The big problem with food cost inflation is that it is extremely bimodal. Fresh and frozen green veggies are still around $1-$2 a pound. However, now a bag of chips is $5. If you weren't able to afford the time cost of making food from scratch before, you are taking the brunt of food cost increase. IMO, this is another reason to believe the "most inflation is from greed" line. Our farmers up north aren't paying more for illegal mexicans to pick the broccoli, and gas is the same price it was quite some time ago, so their produce isn't significantly more expensive and they aren't really even earning more money. Even beef in our local store is the same price it used to be, including the weekly cheap sale stuff. But the big conglomerates that own all the branded products saw an opportunity to jack up prices without taking all the heat. Speaking of which, if you grab a package of mccormick's chili seasoning off the shelf in your store, it will tell you to buy a 15 oz can of tomatoes. Cans of tomatoes have been 14.5oz for at least a decade, and this seasoning product has had that recipe on the back changed at least 4 times in as many years, yet they never admit to the shrinkflation that happened to those cans of tomatoes.
- dunnonot 3y ago
  I think they didn't like hotlinking, but in 2015 there was a comic about (in german) hint: yes there was a typing error... (-; Comic: //i.ibb.co/ScZWgLt/938-ALLES-apr-15-FINAL-Mail.png regards...
  - ChuckNorris89 3y ago
    Is there a TL;DR translation for the comic? I don't think I get the humour/point. All I understood is that the government and media are faking the inflation numbers to be lower than reality that people notice.
    - dxuh 3y ago
      I don't think the comic is particularly insightful, but here is a translation. I tried to stay close to the original, but you might say some things a bit differently in English: Title: Dishonest Could you explain this to me? Government and media are talking about low inflation, but what I am seeing is that prices are exploding. ...they lie, by deliberately calculating incorrectly or sometimes even skipping details. The bad thing is, it doesn't just happen here. Everywhere in the world all central banks seem to be doing it. Through their dishonesty they give themselves more opportunities for influence.. ...Balances are inflated.. ...to trick a part of the population and to make them believe things would get better.. ...while the standard of living is moving in another direction.. through highs and lows! You know that. You have to learn to talk to the subordinates to keep them optimistic...
      - mrguyorama 3y ago
        Ah, it's a comic in the same way as the dreck that Ben Garrison puts out is a "comic"
alenrozac 3y ago
Technical recession. Recession nonetheless. The ECB has a real problem with asymmetry. Can't cut rates just for Germany. At the same time there's high inflation in Austria, Slovenia and the Baltics.
- ChuckNorris89 3y ago
  >The ECB has a real problem with asymmetry. Can't cut rates just for Germany. It's as if a single currency and a single central bank for 25 different economies with different levels of debt, doesn't really work that well in every situation. > At the same time there's high inflation in Austria Inflation in Austria is now mostly due to greedflation. If you cross the border into Germany the same goods are suddenly cheaper.
  - pier25 3y ago
    Doesn't the US do the same with states instead of countries?
    - alenrozac 3y ago
      Not really. US is in a better position for a federal-wide monetary union. Labor mobility is a key component, and it is easier when you don't have different languages and cultures.
    - deleted 3y ago
      [deleted]
    - mcv 3y ago
      To what extent does each state run its own economy? The EU does not have centralised taxes or a centralised economic policy, but it does have a single currency. It's possible a single currency also requires more centralised financial/economic policies.
      - galangalalgol 3y ago
        State economies do differ dramatically though, and monetary policy can indeed affect them in opposite ways at least for a while. And state revenues are almost entirely collected by the state aren't they? There are funds for interstates and railroads, and schools, but often schools are primarily funded at the city level by property taxes.
ccozan 3y ago
Actually the biggest blow was not the energy costs, but the interest rates. They went from 1-2% now at 4-5, even 6% for real-estate ( new building and old ) while the prices are still at last year level. For other types of financing, I had a "good" offer which went to 12% interest. I felt like in a 3rd world country. With such expensive money, nothing will be done. The construction economy is really going dow from mid 2023, everyone has trouble finding projects while the money are kept by the people in banks and not released out of the uncertainty. However, German economy is so diverse that it will absorb this as well.
- mafribe 3y ago
  > money are kept by the people in banks and not released The banks will reinvest this money. (Cf Fractional-reserve banking).
  - nine_zeros 3y ago
    > The banks will reinvest this money. (Cf Fractional-reserve banking). Only if there is demand for the money at a high interest rate. The credit boom is dependent on the borrower as well.
- deleted 3y ago
  [deleted]
- Escapado 3y ago
  I had a brief interaction with a real estate agent a few months back and he told me they really have trouble selling houses now at those interest rates. The run on housing apparently has dialed back significantly. He also mentioned that he thinks in around 5 and 10 years time the market might be flooded with houses people bought at low interest rates because they will not be able to pay their mortgage at these new interest rates and those are typical timeframes for interest rate guarantees. Maybe someone with more insight can share their perspective. I also wonder if people who are in a position to sell our build houses will try (and maybe even succeed?) to sit this out or whether we will see a downward trend in prices again.
nradov 3y ago
It's going to be tough for Germany to resume economic growth without a strong chemicals industry. Much of that depends on cheap natural gas for profitability. Germany can import gas from other sources to replace Russian pipelines that have been cut off, but costs for those new sources are too high to make most bulk chemical manufacturing profitable. We will probably see those industries migrate from Germany to places with cheaper gas supplies. https://www.marketwatch.com/amp/story/inside-germanys-industrial-sized-effort-to-wean-itself-off-putin-and-russian-natural-gas-11675772013 https://www.marketwatch.com/amp/story/inside-germanys-indust...
- c00lio 3y ago
  Producing industry in Germany is a dead man walking. Chemical industry is seeking a quick exit due to extreme gas and energy prices, as is all smelting and metal processing. They are keeping appearances for now, in the hopes of a big "green" bailout, e.g. by subsidizing electricity from 30ct/kWh down to 5ct/kWh and a few billions of free money for "doing something with hydrogen". But that will at best delay the closure of existing works.
ThorsBane 3y ago
They shouldn't be shutting down nuclear. Build more nuclear reactors. That will provide more clean energy and a lot of jobs. Modernize the grid. Make it a smarter grid that is more resilient to harm. These projects pay for themselves quickly and are easy to finance with how much wealth Germany has.
- mmiliauskas 3y ago
  It needs a recession first though. Unless they manage to "wash-off" all the idiots, solutions that attempt to walk on hands will persist.
- barbazoo 3y ago
  There's no way that's gonna happen unfortunately. The greens have absolutely dropped the ball in terms of big picture goals. We've been brainwashed into thinking nuclear power is dangerous and the problem of waste is bigger than the problem of having non renewable, oil based, energy. In hindsight I wouldn't be surprised if the oil lobby had a hand in that.
  - mschild 3y ago
    The greens haven't been part of the national government for decades until 2021. I disagree with their decision to not keep the nuclear reactors running, but if you want to point fingers at people it's not them that unilaterally decided to stop building new reactors.
    - foxtacles 3y ago
      That's technically correct, however much of the Greens' ideology has been gradually adopted by essentially all other political parties over the past 10-15 years, most likely since it's rather popular with the voters here. There's no political party left you could vote for if you are in favor of nuclear.
      - mschild 3y ago
        Right and their ideology is to build more solar and wind. Which, even when factoring in the cost of batteries, is cheaper than nuclear or almost any other form of energy. https://ourworldindata.org/cheap-renewables-growth https://ourworldindata.org/cheap-renewables-growth
stoptrlling 3y ago
Looks like Germany is achieving degrowth faster than their targets
- bannedbybros 3y ago
  [dead]
modernpink 3y ago
China is outcompeting Germany as a manufacturer of high value goods, particularly cars [1][2]. Last year it overtook Germany as the second biggest car exporter. In the first three months of this year, China has surpassed Japan to become the world's top car exporter for the first time. This is due to its strength in EVs (while Germany's strength is in ICEs). Volkswagen holds a 2% share of the Chinese EV market while the Chinese BYD dominates with 40% (Tesla in second at 10%) [3]. It won't be long until Europe imports more cars from China than China imports cars from Europe. If you had said this only a few years ago most Europeans would have laughed in disbelief. With a world moving away from ICE to EV, and with Chinese brands winning at home and abroad, it presents a double whammy nightmare for Germany. Lowered exports to China, plus lowered exports in other markets. And this is all on top of energy prices from the fallout of the conflict in Ukraine, the shut down of nuclear power thanks to the Greens and the geopolitical tensions between the West and China. While Germany's economic model has served it well during an era of a rising China, it may not be the case in a era of a risen China. [1] China’s carmakers outstrip foreign brands in its electric vehicle boom https://www.ft.com/content/dd149923-1c5d-4e5e-8be6-d979aa48aa33 https://www.ft.com/content/dd149923-1c5d-4e5e-8be6-d979aa48a... [2] Big drop in German exports to China raises fears over EU’s economic powerhouse https://www.ft.com/content/3034d39c-118a-44d3-b9bf-6482b786018f https://www.ft.com/content/3034d39c-118a-44d3-b9bf-6482b7860... [3] Can Volkswagen win back China? https://www.ft.com/content/afad4566-6404-483e-934f-c905507bf1d0 https://www.ft.com/content/afad4566-6404-483e-934f-c905507bf...
- seydor 3y ago
  who can realistically challenge the chinese EV market in terms of efficiency / cost? simplicity of EV motors + established industry + possible commodity imports from russia
  - bryanlarsen 3y ago
    Tesla has a 10% market share in China.
- toddmorey 3y ago
  Agreed that Europe & US manufacturers will lose Chinese domestic market. Any data to show Chinese EVs taking over Europe though? Haven’t seen that happening.
p-e-w 3y ago
We need new terminology to distinguish between macroeconomic recessions and living standard recessions. Traditionally, those two things are more or less intertwined, so the term "recession" carries connotations of both. With the steady increase of economic inequality, the link between the two meanings becomes less and less firm. The median living standard in Germany has been in free fall for 20 years. By that criterion, the country (like many other Western countries) has been in a continuous recession since 9/11. By macroeconomic numbers, however, Germany has experienced several booms in between, which can easily be used to create the (intentionally) misleading narrative that "the economy" (insofar as it affects the median individual) is "sometimes up, sometimes down", when in reality there has been a continuous downtrend for a very long time.
- cheschire 3y ago
  Continuous downtrends, free falls, I'm interested what graphs and charts and numbers you're looking at to arrive at this conclusion. Especially when you've called out that someone (who specifically and where?) has been intentionally misleading. You may be objectively correct about all of this but right now it doesn't come off that way to me.
  - prottog 3y ago
    The median real wage in Germany grew until the 90s, stagnated for a while, then started declining in the early noughts[0], with the effect worse for new entrants to the employment marketplace (i.e. young people and immigrants). The latter is predictable in a developed country (meaning past peak GDP growth) with high social safety nets and employee protection (meaning an additional burden for newer entrants to clear). I'm not sure about "free fall", but the median worker's earnings has basically broken even since the 80s or so, with a definite noticeable downward trend since the 2000s. [0]: https://labourmarketresearch.springeropen.com/articles/10.1007/s12651-017-0227-3 https://labourmarketresearch.springeropen.com/articles/10.10...
    - s1artibartfast 3y ago
      Looking only at workers earnings is misleading in both Germany and the United States because it ignores monetary transfers through the government, which is a huge component of GDP. I can't speak for Germany, but for the US, worker earnings continue to climb if you count government mediated benefits. Similarly, it's impossible for worker income to grow at the rate of GDP while taxes grow faster than GDP
deleted 3y ago
[deleted]
vikingerik 3y ago
As a reminder: any year-over-year economic numbers still need to consider pandemic effects. Current numbers look bad when the baseline of a year ago was artificially high. The pandemic shutdowns caused pent-up demand that became time-shifted, causing anomalously high results for that time period, and so year-over-year numbers a year later look worse. For the US, that happened starting in summer 2021, and thus we had that apparent recession in 2022 as those numbers were compared to 2021's artificially high baseline. The same is now happening for Germany, since the shutdowns lifted later in most of Europe, such that the early-2022 numbers had that time-shifted effect so that the early-2023 numbers seem to look bad. (To illustrate the point: remember the "great resignation"? That wasn't a real effect, that was a statistical artifact of pent-up demand for normal job switching that didn't happen during the pandemic.) For a real comparison, compare this year's numbers to 2019 and you'll see that economic growth looks fairly normal for a four-year period.
nforgerit 3y ago
German speaking. My personal summary of Germany’s technical problems in all different areas boils down to “arrogance”. - Whenever I had the chance to talk to „leadership“ people about the lack of progress in transforming energy production towards renewables they were essentially telling me “all is good, we have a great deal with Gasprom, they will always deliver because we’re too important for them” - Whenever I asked about things digital and a lack of local Cloud providers and expertise in Software Engineering: “we have excellent education (we don’t) and look, when there’s the time we will be excellent in shipping great software with our products. The market just doesn’t require it yet (about 10y ago)” - “China needs us as much as we need them. Look at the import/export fraction to China in recent years” - “Look we are world class with out ICE tech. Why would we give that up for stupid electro?” And so on.. German politicians were stupid enough to follow the lobbying and public opinions. Meanwhile even German conservatives that used to be halfway reliable start campaigning using fake news and drive cultural wars. Chancellor Scholz publicly stated that Germany has a new Wirtschaftswunder in nearsight “because of all the work that needs to be done” (lol)
- c00lio 3y ago
  German industry is also very lazy with any kind of R&D and even minimal risk-taking, to the point of requiring research subsidies to look into anything new. German car makers started looking into EVs and hydrogen powered cars 30 years ago, but only because of the government paying them to do so, consistently and repeatedly. When the money dried up because the programs ended, research stopped. A few years later, Tesla ate their lunch and half their dinner, because the car industry just wasn't interested if it wasn't subsidized. The overall level of subsidy-dependence in the economy is so large that no new undertaking will be done without a corresponding subsidy of some kind. Where an American might look for venture capital, a European (and especially a German) will look for a government subsidy program. Any industry that doesn't look for and mold itself along those subsidies will be leaving money on the table, therefore becoming uncompetitive. That means that all our industry will always be shaped by political programs and will always lag years behind the rest of the world. The chain will always be: foreign company does new thing X -> X looks good -> EU/German politician envies X -> subsidies for X -> EU/German industry does X in the exact size and amount of the subsidies. And of course each of those arrows will be a year or more.
jasmer 3y ago
There should be a separate set of lending rates for real estate. Sounds kooky at first but really it's a fundamentally different kind of asset.
- paulddraper 3y ago
  There are, right?
  - jasmer 3y ago
    Fed sets rates banks decide what rates to lend out for mortgages. Just like we tax things at different rates, we may want to require mortgage lending at different rates, maybe a bit higher if necessary. I don't think that exists, but I could be wrong.

147 points by super256 3y ago

IMHO, it was already there, but it was in denial. Since covid, rents increases have far outpaced salary increases. And since 2022 so have bill, groceries, everything. But then again so is most of Europe.

baremetal 3y ago
>Since covid, rents increases have far outpaced salary increases. And since 2022 so have bill, groceries, everything. Same story in the US.
- yamtaddle 3y ago
  Everyone I know who didn't go in to this with a lot of income above their spending level is struggling, mostly due to price increases in things they can't not spend money on. Housing's way up the list, and food, which, I dunno, maybe it's a local thing, but that's up a ton more than overall US inflation figures would lead one to guess. Utility prices are up, too. Basically the only things that are still cheap are optional crap. Extremely-low-paid (think: fast food worker) jobs saw a bump, but jobs above that aren't seeing a corresponding increase, so the bottom's basically just flattened and now a bunch more people are making the same money as fast food workers, which is about the same as they were making before, while their expenses are up a lot.
  - mywittyname 3y ago
    > overall US inflation figures would lead one to guess. I think part of the problem is that people see rates of inflation in the news, but their mind thinks in terms of cumulative inflation. They think, "housing has gone up 30% since before the pandemic but the government says inflation is only 9%." Even though, 9% inflation per year over 3 years is 30% total. Then there's the fact that inflation stats are an average of a "basket of goods". So housing might go up 15%, but that's offset by other items going up 2%. Then there is regional factors, and how inflation is mentally sticky (i.e., people making jokes about the price of eggs, even though wholes prices are down 80% over the past 4 months).
  - mrguyorama 3y ago
    The big problem with food cost inflation is that it is extremely bimodal. Fresh and frozen green veggies are still around $1-$2 a pound. However, now a bag of chips is $5. If you weren't able to afford the time cost of making food from scratch before, you are taking the brunt of food cost increase. IMO, this is another reason to believe the "most inflation is from greed" line. Our farmers up north aren't paying more for illegal mexicans to pick the broccoli, and gas is the same price it was quite some time ago, so their produce isn't significantly more expensive and they aren't really even earning more money. Even beef in our local store is the same price it used to be, including the weekly cheap sale stuff. But the big conglomerates that own all the branded products saw an opportunity to jack up prices without taking all the heat. Speaking of which, if you grab a package of mccormick's chili seasoning off the shelf in your store, it will tell you to buy a 15 oz can of tomatoes. Cans of tomatoes have been 14.5oz for at least a decade, and this seasoning product has had that recipe on the back changed at least 4 times in as many years, yet they never admit to the shrinkflation that happened to those cans of tomatoes.
dunnonot 3y ago
I think they didn't like hotlinking, but in 2015 there was a comic about (in german) hint: yes there was a typing error... (-; Comic: //i.ibb.co/ScZWgLt/938-ALLES-apr-15-FINAL-Mail.png regards...
- ChuckNorris89 3y ago
  Is there a TL;DR translation for the comic? I don't think I get the humour/point. All I understood is that the government and media are faking the inflation numbers to be lower than reality that people notice.
  - dxuh 3y ago
    I don't think the comic is particularly insightful, but here is a translation. I tried to stay close to the original, but you might say some things a bit differently in English: Title: Dishonest Could you explain this to me? Government and media are talking about low inflation, but what I am seeing is that prices are exploding. ...they lie, by deliberately calculating incorrectly or sometimes even skipping details. The bad thing is, it doesn't just happen here. Everywhere in the world all central banks seem to be doing it. Through their dishonesty they give themselves more opportunities for influence.. ...Balances are inflated.. ...to trick a part of the population and to make them believe things would get better.. ...while the standard of living is moving in another direction.. through highs and lows! You know that. You have to learn to talk to the subordinates to keep them optimistic...
    - mrguyorama 3y ago
      Ah, it's a comic in the same way as the dreck that Ben Garrison puts out is a "comic"

alenrozac 3y ago

Technical recession. Recession nonetheless. The ECB has a real problem with asymmetry. Can't cut rates just for Germany. At the same time there's high inflation in Austria, Slovenia and the Baltics.

ChuckNorris89 3y ago
>The ECB has a real problem with asymmetry. Can't cut rates just for Germany. It's as if a single currency and a single central bank for 25 different economies with different levels of debt, doesn't really work that well in every situation. > At the same time there's high inflation in Austria Inflation in Austria is now mostly due to greedflation. If you cross the border into Germany the same goods are suddenly cheaper.
- pier25 3y ago
  Doesn't the US do the same with states instead of countries?
  - alenrozac 3y ago
    Not really. US is in a better position for a federal-wide monetary union. Labor mobility is a key component, and it is easier when you don't have different languages and cultures.
  - deleted 3y ago
    [deleted]
  - mcv 3y ago
    To what extent does each state run its own economy? The EU does not have centralised taxes or a centralised economic policy, but it does have a single currency. It's possible a single currency also requires more centralised financial/economic policies.
    - galangalalgol 3y ago
      State economies do differ dramatically though, and monetary policy can indeed affect them in opposite ways at least for a while. And state revenues are almost entirely collected by the state aren't they? There are funds for interstates and railroads, and schools, but often schools are primarily funded at the city level by property taxes.

ccozan 3y ago

Actually the biggest blow was not the energy costs, but the interest rates. They went from 1-2% now at 4-5, even 6% for real-estate ( new building and old ) while the prices are still at last year level. For other types of financing, I had a "good" offer which went to 12% interest. I felt like in a 3rd world country. With such expensive money, nothing will be done. The construction economy is really going dow from mid 2023, everyone has trouble finding projects while the money are kept by the people in banks and not released out of the uncertainty. However, German economy is so diverse that it will absorb this as well.

mafribe 3y ago
> money are kept by the people in banks and not released The banks will reinvest this money. (Cf Fractional-reserve banking).
- nine_zeros 3y ago
  > The banks will reinvest this money. (Cf Fractional-reserve banking). Only if there is demand for the money at a high interest rate. The credit boom is dependent on the borrower as well.
deleted 3y ago
[deleted]
Escapado 3y ago
I had a brief interaction with a real estate agent a few months back and he told me they really have trouble selling houses now at those interest rates. The run on housing apparently has dialed back significantly. He also mentioned that he thinks in around 5 and 10 years time the market might be flooded with houses people bought at low interest rates because they will not be able to pay their mortgage at these new interest rates and those are typical timeframes for interest rate guarantees. Maybe someone with more insight can share their perspective. I also wonder if people who are in a position to sell our build houses will try (and maybe even succeed?) to sit this out or whether we will see a downward trend in prices again.

nradov 3y ago

It's going to be tough for Germany to resume economic growth without a strong chemicals industry. Much of that depends on cheap natural gas for profitability. Germany can import gas from other sources to replace Russian pipelines that have been cut off, but costs for those new sources are too high to make most bulk chemical manufacturing profitable. We will probably see those industries migrate from Germany to places with cheaper gas supplies. https://www.marketwatch.com/amp/story/inside-germanys-industrial-sized-effort-to-wean-itself-off-putin-and-russian-natural-gas-11675772013 https://www.marketwatch.com/amp/story/inside-germanys-indust...

c00lio 3y ago
Producing industry in Germany is a dead man walking. Chemical industry is seeking a quick exit due to extreme gas and energy prices, as is all smelting and metal processing. They are keeping appearances for now, in the hopes of a big "green" bailout, e.g. by subsidizing electricity from 30ct/kWh down to 5ct/kWh and a few billions of free money for "doing something with hydrogen". But that will at best delay the closure of existing works.

ThorsBane 3y ago

They shouldn't be shutting down nuclear. Build more nuclear reactors. That will provide more clean energy and a lot of jobs. Modernize the grid. Make it a smarter grid that is more resilient to harm. These projects pay for themselves quickly and are easy to finance with how much wealth Germany has.

mmiliauskas 3y ago
It needs a recession first though. Unless they manage to "wash-off" all the idiots, solutions that attempt to walk on hands will persist.
barbazoo 3y ago
There's no way that's gonna happen unfortunately. The greens have absolutely dropped the ball in terms of big picture goals. We've been brainwashed into thinking nuclear power is dangerous and the problem of waste is bigger than the problem of having non renewable, oil based, energy. In hindsight I wouldn't be surprised if the oil lobby had a hand in that.
- mschild 3y ago
  The greens haven't been part of the national government for decades until 2021. I disagree with their decision to not keep the nuclear reactors running, but if you want to point fingers at people it's not them that unilaterally decided to stop building new reactors.
  - foxtacles 3y ago
    That's technically correct, however much of the Greens' ideology has been gradually adopted by essentially all other political parties over the past 10-15 years, most likely since it's rather popular with the voters here. There's no political party left you could vote for if you are in favor of nuclear.
    - mschild 3y ago
      Right and their ideology is to build more solar and wind. Which, even when factoring in the cost of batteries, is cheaper than nuclear or almost any other form of energy. https://ourworldindata.org/cheap-renewables-growth https://ourworldindata.org/cheap-renewables-growth

stoptrlling 3y ago

Looks like Germany is achieving degrowth faster than their targets

bannedbybros 3y ago
[dead]

modernpink 3y ago

China is outcompeting Germany as a manufacturer of high value goods, particularly cars [1][2]. Last year it overtook Germany as the second biggest car exporter. In the first three months of this year, China has surpassed Japan to become the world's top car exporter for the first time. This is due to its strength in EVs (while Germany's strength is in ICEs). Volkswagen holds a 2% share of the Chinese EV market while the Chinese BYD dominates with 40% (Tesla in second at 10%) [3]. It won't be long until Europe imports more cars from China than China imports cars from Europe. If you had said this only a few years ago most Europeans would have laughed in disbelief. With a world moving away from ICE to EV, and with Chinese brands winning at home and abroad, it presents a double whammy nightmare for Germany. Lowered exports to China, plus lowered exports in other markets. And this is all on top of energy prices from the fallout of the conflict in Ukraine, the shut down of nuclear power thanks to the Greens and the geopolitical tensions between the West and China. While Germany's economic model has served it well during an era of a rising China, it may not be the case in a era of a risen China. [1] China’s carmakers outstrip foreign brands in its electric vehicle boom https://www.ft.com/content/dd149923-1c5d-4e5e-8be6-d979aa48aa33 https://www.ft.com/content/dd149923-1c5d-4e5e-8be6-d979aa48a... [2] Big drop in German exports to China raises fears over EU’s economic powerhouse https://www.ft.com/content/3034d39c-118a-44d3-b9bf-6482b786018f https://www.ft.com/content/3034d39c-118a-44d3-b9bf-6482b7860... [3] Can Volkswagen win back China? https://www.ft.com/content/afad4566-6404-483e-934f-c905507bf1d0 https://www.ft.com/content/afad4566-6404-483e-934f-c905507bf...

seydor 3y ago
who can realistically challenge the chinese EV market in terms of efficiency / cost? simplicity of EV motors + established industry + possible commodity imports from russia
- bryanlarsen 3y ago
  Tesla has a 10% market share in China.
toddmorey 3y ago
Agreed that Europe & US manufacturers will lose Chinese domestic market. Any data to show Chinese EVs taking over Europe though? Haven’t seen that happening.

p-e-w 3y ago

We need new terminology to distinguish between macroeconomic recessions and living standard recessions. Traditionally, those two things are more or less intertwined, so the term "recession" carries connotations of both. With the steady increase of economic inequality, the link between the two meanings becomes less and less firm. The median living standard in Germany has been in free fall for 20 years. By that criterion, the country (like many other Western countries) has been in a continuous recession since 9/11. By macroeconomic numbers, however, Germany has experienced several booms in between, which can easily be used to create the (intentionally) misleading narrative that "the economy" (insofar as it affects the median individual) is "sometimes up, sometimes down", when in reality there has been a continuous downtrend for a very long time.

cheschire 3y ago
Continuous downtrends, free falls, I'm interested what graphs and charts and numbers you're looking at to arrive at this conclusion. Especially when you've called out that someone (who specifically and where?) has been intentionally misleading. You may be objectively correct about all of this but right now it doesn't come off that way to me.
- prottog 3y ago
  The median real wage in Germany grew until the 90s, stagnated for a while, then started declining in the early noughts[0], with the effect worse for new entrants to the employment marketplace (i.e. young people and immigrants). The latter is predictable in a developed country (meaning past peak GDP growth) with high social safety nets and employee protection (meaning an additional burden for newer entrants to clear). I'm not sure about "free fall", but the median worker's earnings has basically broken even since the 80s or so, with a definite noticeable downward trend since the 2000s. [0]: https://labourmarketresearch.springeropen.com/articles/10.1007/s12651-017-0227-3 https://labourmarketresearch.springeropen.com/articles/10.10...
  - s1artibartfast 3y ago
    Looking only at workers earnings is misleading in both Germany and the United States because it ignores monetary transfers through the government, which is a huge component of GDP. I can't speak for Germany, but for the US, worker earnings continue to climb if you count government mediated benefits. Similarly, it's impossible for worker income to grow at the rate of GDP while taxes grow faster than GDP

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vikingerik 3y ago

As a reminder: any year-over-year economic numbers still need to consider pandemic effects. Current numbers look bad when the baseline of a year ago was artificially high. The pandemic shutdowns caused pent-up demand that became time-shifted, causing anomalously high results for that time period, and so year-over-year numbers a year later look worse. For the US, that happened starting in summer 2021, and thus we had that apparent recession in 2022 as those numbers were compared to 2021's artificially high baseline. The same is now happening for Germany, since the shutdowns lifted later in most of Europe, such that the early-2022 numbers had that time-shifted effect so that the early-2023 numbers seem to look bad. (To illustrate the point: remember the "great resignation"? That wasn't a real effect, that was a statistical artifact of pent-up demand for normal job switching that didn't happen during the pandemic.) For a real comparison, compare this year's numbers to 2019 and you'll see that economic growth looks fairly normal for a four-year period.

nforgerit 3y ago

German speaking. My personal summary of Germany’s technical problems in all different areas boils down to “arrogance”. - Whenever I had the chance to talk to „leadership“ people about the lack of progress in transforming energy production towards renewables they were essentially telling me “all is good, we have a great deal with Gasprom, they will always deliver because we’re too important for them” - Whenever I asked about things digital and a lack of local Cloud providers and expertise in Software Engineering: “we have excellent education (we don’t) and look, when there’s the time we will be excellent in shipping great software with our products. The market just doesn’t require it yet (about 10y ago)” - “China needs us as much as we need them. Look at the import/export fraction to China in recent years” - “Look we are world class with out ICE tech. Why would we give that up for stupid electro?” And so on.. German politicians were stupid enough to follow the lobbying and public opinions. Meanwhile even German conservatives that used to be halfway reliable start campaigning using fake news and drive cultural wars. Chancellor Scholz publicly stated that Germany has a new Wirtschaftswunder in nearsight “because of all the work that needs to be done” (lol)

c00lio 3y ago
German industry is also very lazy with any kind of R&D and even minimal risk-taking, to the point of requiring research subsidies to look into anything new. German car makers started looking into EVs and hydrogen powered cars 30 years ago, but only because of the government paying them to do so, consistently and repeatedly. When the money dried up because the programs ended, research stopped. A few years later, Tesla ate their lunch and half their dinner, because the car industry just wasn't interested if it wasn't subsidized. The overall level of subsidy-dependence in the economy is so large that no new undertaking will be done without a corresponding subsidy of some kind. Where an American might look for venture capital, a European (and especially a German) will look for a government subsidy program. Any industry that doesn't look for and mold itself along those subsidies will be leaving money on the table, therefore becoming uncompetitive. That means that all our industry will always be shaped by political programs and will always lag years behind the rest of the world. The chain will always be: foreign company does new thing X -> X looks good -> EU/German politician envies X -> subsidies for X -> EU/German industry does X in the exact size and amount of the subsidies. And of course each of those arrows will be a year or more.

jasmer 3y ago

There should be a separate set of lending rates for real estate. Sounds kooky at first but really it's a fundamentally different kind of asset.

paulddraper 3y ago
There are, right?
- jasmer 3y ago
  Fed sets rates banks decide what rates to lend out for mortgages. Just like we tax things at different rates, we may want to require mortgage lending at different rates, maybe a bit higher if necessary. I don't think that exists, but I could be wrong.