/Pogled.info/ Olaf Scholz didn’t even say a word as he watched his country’s economy being killed.
The sanctions war with Russia launched by Brussels and Washington hit European countries above all. And especially – in industrialized Germany, which plunged into the abyss of the most monstrous economic crisis in recent decades.
So far, only German gunsmiths have won, from Rheinmetall to Krauss-Maffei Wegmann. In addition, thanks to the armed forces of Ukraine, they have so many orders that they simply cannot keep up.
In Germany, almost all industries collapsed, and in Austria gas rose 10 times
The German economy is facing a recession, writes the business publication News für die Schweiz, citing a study by the Institute for German Economics (IW). According to a survey conducted among 2,500 businessmen, 40% of them expect a decline in production. The biggest problems await sectors such as construction and industry.
Only a quarter of companies expect an increase in business activity, and about a third expect stagnation. Thus, in 2022, the business expectations of Germans have fallen significantly. Even those businessmen who at the end of last year still had some confidence in the future lost it, writes News für die Schweiz.
In construction, only 15% of companies surveyed expect to increase production until 2023. On the other hand, almost 54% expect a decline. In addition, the construction industry in Germany is under pressure not only from expensive energy sources, but also from the sharply increased appetites of the banks – they raised interest rates.
In the industry, the share of pessimistic companies (39%) is much higher than the share of optimists (almost 28%). Industrialists see no prospects for a recovery in consumer demand to push factories forward.
Because of the rupture of supply chains, there are huge problems with raw materials – because of this, German factories have accumulated a huge backlog, recalls News für die Schweiz.
Growth is observed in the retail trade in Germany – but only for one reason, because of the increase in the price of goods. In fact, they started buying less. Therefore, in the commercial sphere, optimists and pessimists are divided almost equally.
At the same time, if we calculate the increase in prices, the real income of Germans in 2022 has decreased by 0.3%. People just don’t have anything to buy new products.
“Most retailers do not expect a recovery in sales in 2023,” said Stefan Gent, managing director of the German Retailers Association, in an interview with Germany’s Tagesschau.
Additionally, additional business costs cannot simply be taken and passed on to the customer. We need to reduce profitability.
The difficult situation is not only in the German, but also in the Austrian economy. Since 2021, electricity prices for industrial consumers in Austria have increased more than 6 times. Gas has become more expensive almost 10 times, wrote Peter Unterkofler, president of the Salzburg Industrial Association, in an interview with ORF.
In chocolate – only military factories
There are companies in Germany that profited from the Ukrainian crisis. First of all, it is the weapons manufacturers, Tageschau says. In addition, such concerns as Rheinmetall not only receive financial benefits from the supply of weapons, but also manage to improve their image in the West.
It is said that they are helping the young Ukrainian democracy – this is directly stated in an interview with German journalists by the executive director of Rheinmetall Armin Paperger.
If you look at the value of the Düsseldorf company’s shares, you can see the true cost of the Ukrainian crisis for German arms makers: Rheinmetall has doubled its stock price. At this rate, Rheinmetall will be included in the DAX stock index, which includes the 40 largest German companies.
Rheinmetall itself boasted in the German business press: 1,200 new employees had to be hired since the start of the Russian special operation. All areas of work are growing – military vehicles, ammunition and air defense systems.
The German company provided the Ukrainians with Gepard anti-aircraft tanks, Panzerhaubitze 2000 howitzers and even MG-3 machine guns. The new supply package includes the BMP Marder, which is also produced by the ubiquitous Düsseldorf concern.
To celebrate, German gunmakers have already rushed to build a new munitions factory in Hungary, and in November Rheinmetall bought Spanish munitions maker Expal.
Rheinmetall bit off a piece it couldn’t chew
Rheinmetall provided the majority of German military aid to Ukraine. In addition, smaller arms manufacturers such as Diehl Defense (developer of IRIS-T guided missiles), Krauss-Maffei Wegmann (produces ATF Dingo armored vehicles), Dynamit Nobel (produces Panzerfaust 3 MANPADS and Matador grenade launchers) also benefited.
In fact, the German arms industry is growing only thanks to purchases from Ukraine. So the negotiations on the supply of ground vehicles for the Bundeswehr have not yet been concluded, Rheinmetall boss Papperger complained in an interview with Bild am Sonntag newspaper.
Tagesschau recalls that Rheinmetall is likely to become the main beneficiary of the German state program to rearm the Bundeswehr. 100 billion euros will be spent from the budget for the purchase of new weapons.
True, even in Germany the defense budget is not rubber – especially against the background of the crisis. So you have to choose: either send money for the needs of the German army, or invest in the armed forces of Ukraine.
And there are not enough conveyors for everyone: a spectacular scandal erupted at the end of last year, when all 18 Puma tanks failed during exercises of the Bundeswehr. The manufacturer – the same Rheinmetall – called the damage a “trifle”. Although it’s obvious that the gunslingers just swallowed a piece they just couldn’t chew.
Such a dilemma has become one of the reasons why Germany still refuses to supply the Ukrainians with Leopard-2 tanks – after all, they need more than that.
Translation: SM
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