Is Germany’s economic model doomed? | DW Business Beyond

Germany has long been known as Europe’s economic powerhouse. But this year, it’s the world’s worst performing leading economy. Analysts believe that decades of economic success lulled its leaders into a false sense of security. In this episode, we look under the hood of Germany’s economic model and assess whether the country is experiencing a momentary crash or lasting decent.

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00:00 – 02:18 Introduction
02:19 – 05:15 Germany’s Economic Success Story
05:16 – 07:14 Problem 1: Dwindling Demand
07: 15 – 10:25 Problem: 2: Energy and Industry
10:26 – 11: 42 Problem 3: Consumption
11:43 – 16:05 Problem 4: Investment and Digitalization
16:06 – 18:36 Problem 5: Innovation
18:37 – 21:56 Conclusion
21:57 – 22:23 Credits

[dwnews]

Correction: The graphic at 0:38 should say: "-50.6% Foreign direct investment 2021-2022."
2022-2023 is not the correct timeframe.

[chengavitch]

Germany’s economy benefited from cheap energy from Russia and vast market in China. Now the energy pipelines have been blown up and the politicians are forcing the companies to decouple. The consequence is not unexpected.

[Darkmatter]

I find out truly bizarre that everyone knows getting your gas pipes blown up and losing the cheap Russian gas is responsible for de-industrialization of Germany, but no one is even mentioning it any more. As if it didn't even happen. Truly mind boggling.

[bananenbrot-ptmo]

The worst thing is that politicians always want to sugarcoat everything instead of admitting that there are deficits.

[martavingalli]

What got Germany to where it is today, is not necessarily what will make it successful in future. The problems with Germany are a huge lag in digitalisation, slow adaptation, poor forecasting, aging population, poor talent attraction and old school management style. The thing is Germany is falling behind in technology, innovation, infrastructure and business model, suffering from mismanagement and yet we (Germans) think thar we are still the best!

[rosshilton]

The German economic miracle was based upon a number of drivers, but the biggest by far was the cheapest energy in the world - Russian Gas.

Germany was paying US$ 4/BTU for piped gas when Japan was paying US$ 18/BTU for Australian LNG.

That’s it. That’s the big secret. Cheap energy. All of the German successes were energy dependent.

That gas has gone.

[a.z]

i give you a simple example. I recently started with this mid sized company in Germany and it is mind boggling how paper intensive this company is. rooms are still filled with archived documents. almost 70% of my colleagues dont know how to use MS office programs efficiently.
they work hard and organized but hopeless how inefficient it is.

[monirbabu]

To be honest, Germany's economy was rising with Russian Gas. Its heavy industry is too much expensive now.

[hushpuppykl]

Germany was never over dependent on Russian energy. It was enjoying cheap energy from Russia.

[civilshaman]

No emphasis on Nordstream pipelines destroyed by German allies

[hiitstechsupport]

German mantra &famous last words of a dying economy: wir machen das weiter so, weil wir das schon immer so gemacht haben.

[eleanorsmith]

DW doesn’t want to say the true reasons:

1. The profit of USSR’s collapse though was mainly harvested by US/UK, still seeped through to European countries.
2. Euro. Germany as one of the biggest member states can control other countries’ monetary policies through ECB.
3. Eastern European labour. Germany was probably the one benefit the most from well trained labour forces from Eastern European countries.
4. Cheap energy. Well, since Germany cannot even call out loudly the names who bombed Nord Stream, we can pretend this has not happened.

[quantummotion]

One very critical point that this documentary misses. BASF needs natural gas not just for energy, but also as an ACTUAL CHEMICAL COMPONENT to make all of its products. Going solar/wind does not directly help. BASF needs cheap natural gas, period. BASF has increased its presence in the US, as the shale gas revolution has made the US a massive and cheap supplier, but BASF can only realize this if it is located in the US to have the natural gas piped in.

[adrianosousamendes]

One last thing: the tax department in Germany is creating such stress that people are closing their companies in Germany and opening in Estonia, UK, and other countries...

[theant]

This sounds like 1970s Great Britain.

From the workshop of the world to Workshop of the commonwealth, to workshop of Europe, to just its own workshop, and then the Workshop closed.

[RodrigoMadriz]

120 days to start a company? 40 days to start a company?🤯🤯🤯 You can incorporate a business in Canada in a few minutes online!

[spelf]

That statistic about the BASF factory using more power than Switzerland on any given day is incredible.

[Linuxhippy]

When it comes to IT, Germany's biggest mistake was to simply rely way too much on software from the US. Instead of betting on open-source and local software, billions and billions are sent to the US (especially to Microsoft). And the funny thing is, we still get to hear Microsoft Germany's CEO saying how the German government is too frugal. However, money sent to Microsoft is just a short-term investment - it makes even more dependent and doesn't do anything to local expertise.

[andriibakhtiozin]

being IT engineer Germany always was seen for me as some huge trade-off. Moving there mean for me that I will definitely feel shortages in profit, as I taxes are high and so does rent/housing costs, in addition I will have to fight with complex language and tons of bureaucracy, I will feel lonely even relocating with my wife and kid, but all social circle will be broken. In another hand the only benefit I see it is some sort of grown society with unique traditions.

[cryptoburo]

The ELEPHANT in the room that DW rarely mentions is the decision to shut down all of Germany's NUCLEAR plants. They said that Germany NEEDS low energy prices to export, but they can't put 2 and 2 together: Germany needs nuclear, and should stop burning coal to make electricity.