Scholz Leaves Germans With Worst Economic Blues in a Generation

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(Bloomberg) – Olaf Scholz is heading to the worst defeat of elections for any German advisor, and his bad economic record is one of the main reasons.

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If the ballot boxes are correct about the decrease in Schulz's 2021-Bulki-numbers, the numbers have moved during the three-month campaign-Social Democrats faced a greater loss than any German leader since the Federal Republic was established in 1949. The expected result of about 15 % of the vote will be The least for any concern.

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Many of his problems come to the economy. Not since Gerahard Schroeder's narrow defeat in 2005, which appeared prominent in the elections. Again at the end of the century, as now, the country has been classified as “Europe's patient”.

Germany's failure to rebound from the epidemic in the way the United States and other peers were the specified narration during the three -year state of Schulz. The largest reform in Europe after two years of shrinkage will be one of the main challenges of the next government.

Amid self -search on how to address the deep problems that have been recognized as largely local, the 66 -year -old consultant is likely to succeed by his conservative opponent, Friedrich Mirz, at the head of a new coalition government.

Growth has always been a dominant topic in the election campaign on February 23. While attention has turned to immigration, voters still see the economy the second largest problem in the country-but rather plays a greater role in the individual polling fund decisions than refugees and asylum, according to a poll conducted by the public broadcaster ZDF.

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The narrow stems mainly of manufacturing, which constitutes a greater share of production than many peers. During the epidemic, when consumers were quickly swinging towards the goods while closing restaurants and other services, this was done for Germany.

But shortly after a period of supply chain, increased energy and employment costs, as well as high interest rates, strong opposite winds. With this background and facing the intense Chinese electric vehicle competition, Volkswagen AG, the largest car producer in Germany, reduces 35,000 jobs.

A decrease in industrial production contradicts the global trend. According to the KIEL Institute for Global Economy, this separation indicates that German companies have become less competitive.

A record surplus in the country with the United States makes it vulnerable to another beating if President Donald Trump continues to threaten definitions against the European Union. Bloomberg's economic Bloomberg believes that it can target fees on cars and industrial machinery – Germany is particularly released.

Manufacturing with the successful energy of the war in Ukraine has struggled. Politicians have argued in the Schulz alliance that strong dependence on Russian energy imports means that Germany has suffered more than disrupting natural gas flows. While the initial concerns of the deep recession did not pass, the economy still faces higher costs as a result.

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The government has achieved some success in finding alternative sources of Russian energy. Germany has not only succeeded in writing down the expansion of liquid natural gas stations, but also cut a lot of red tape to stimulate renewable energy sources.

As a result, the nation has seen the fastest solar energy growth in Europe and the rapid publication of wind turbine. The wild winds received standard approvals and auction prizes, which increased the possibility of accelerating expansion.

The problem now is that the expansion of the network cannot be tracked with the additional ability, so part of that green energy remains unused. After leaving nuclear energy two years ago, the nation also lacks the reserve capacity of the “dunkeflaute” periods, when there are no winds and a cloudy sky.

Regardless of energy, the political debate dominated by government financial affairs was. With the decrease in growth, public tanks became increasingly duration – which eventually led to the coalition and early elections when politicians were unable to agree on a budget for 2025.

Germany has a large extent borrowing in the seven group. CDU/CSU wants the exhibitions to stick to the constitutional debt brakes, although Mirz indicated some openness to reform. SPD wants to reduce the base to enable more general investment and stimulate demand. His partner in the coalition, The Greens, prefers greatly.

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The pressure has intensified for more spending, with the collapse of infrastructure and deficiencies in the army is now difficult to ignore. The German Council of Economists criticized the government in late last year for not devoting enough money to the fields of “directed to the future” such as education and transportation.

Possible costs are amazing. The German Economic Institute estimates that 600 billion euros (625 billion dollars) may be allocated over the next decade to the transfer of energy, roads, railways, the education system and other issues. Even DeZernat Zukunft, a research tank, sees an additional 800 billion euros spending between 2025 and 2030.

For all Germany's arguments about debts and fears of growth, the labor market was a bright point. This is partly due to the lack of employees of companies in the wake of the epidemic, which made them be careful not to get rid of workers.

Recently, the weak economy pushed unemployment to the top steadily, although the total outcome is much lower than the peak of about 5 million and reached in 2005.

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Employees are still missing in areas that include hospitality and health care, indicating the incompatibility of skills. Reverse population factors mean that more Germans will leave the labor market in the coming years, which represents another problem for policy makers.

While the leaders coming in Germany face tremendous challenges, the good news is that they have the ability to change the path of the nation, according to bank president Bundanban Joachim Nagil. He said last month: “reliable and expected measures” can enhance investment and expansion.

“It is up to the upcoming federal government to implement structural reforms that will increase the potential growth again, so that fears of retreat disappear again,” he said.

– With the help of Petra Surg and Jana Rando.

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