By South China Morning Post | Created at 2024-11-18 08:36:20 | Updated at 2024-11-18 10:44:44
2 hours ago
Germany, once the iron engine of Europe, finds itself rusting. Guided by chancellors such as Konrad Adenauer, Helmut Schmidt, Helmut Kohl and Angela Merkel, the country emerged from post-war ashes to become a paragon of economic resilience and political stability.
Yet today, that same Germany is faltering – its economy stalling, its politics paralysed – and the timing could not be more precarious. Both Europe and China, crucial partners in Germany’s economic orbit, now find themselves tethered to a sinking anchor.
Earlier this month, the German government imploded. In the end, Chancellor Olaf Scholz’s coalition of Social Democrats, Greens and Free Democrats, a fragile assemblage of incongruent ideologies, succumbed to internal schisms, leaving Germans to elect a new Bundestag and thus a new chancellor on February 23.
This political fracture comes at a profoundly inopportune moment. Germany’s economy, forecast to contract by 0.2 per cent this year, is now alone among the Group of 7 nations with a negative growth outlook.
Economic expansion might be sluggish in the United States, France and Japan, but at least it remains positive. Not so in Germany, where a low unemployment rate conceals a graver issue: a shortage of skilled labour so severe that the government, despite its political inertia, had to relax immigration standards.
To stave off collapse, Germany needs 400,000 skilled immigrants annually, a demand as stark as it is unlikely. Failure to meet it spells nothing less than a twin crisis of dwindling productivity coupled with mounting social costs.
