(CNN)– On Friday, German Finance Minister Christian Lindner ignored suggestions that his country had once again become the “sick man of Europe” and said that his country was “a little tired man, and needs a cup of coffee.”
The German economy, which has been the engine of growth in Europe for a long time, contracted last year by 0.3%, which is likely the weakest performance among the major countries in the region, and some analysts expect zero growth in 2024.
Lindner said, during a session of the World Economic Forum held in Davos, Switzerland: “I know what some of you are thinking: Germany may be a sick man. Germany is not a sick man… Germany is a tired man after a short night.”
He added: “The low growth expectations are in part a wake-up call, and now we have a good cup of coffee.” He continued that his country is “at the beginning of an era of new structural reforms,” but did not provide details.
Germany became known as the “sick man of Europe” in the late 1990s as its economy faltered and unemployment rates rose. Berlin went on to shed that nickname by introducing a series of labor market reforms, and its economy boomed in the decade following the 2008 global financial crisis.
Energy factor
Germany’s historical dependence on Russian natural gas has proven to be its Achilles heel in 2022.
European energy prices were already rising when Russia’s invasion of Ukraine early that year pushed them to record levels, and Moscow then proceeded to choke off gas supplies to European countries.
The energy crisis paralyzed large sectors of German industry.
Natural gas prices have since fallen and Berlin has found new gas suppliers to replace Russia, but the crisis has cast a long shadow.
“We have had to reinvent Germany’s energy infrastructure and supply in the last 18 months, and our economy has shown resilience,” Lindner said.
While automobile production and other transportation equipment manufacturing recorded growth last year, production in energy-intensive chemical and metallurgical industries declined.
Overall, industrial production, dominated by manufacturing, contracted by 2%, China’s economic problems also affected Germany, and there is another major risk looming: the shipping crisis in the Red Sea as a result of Houthi attacks on ships.
2024-01-20 02:04:19
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