The key here is to have a conservative government for 16 years in a row to make absolutely sure anything innovative is made as hard as possible to achieve.
Germany was governed for the last 16 years by people that desperately want to live in 1996 because that is when their back didn’t hurt and “everything was great” (?)
And from 2025 we will have another 16 years with the conservatives if we are very lucky not to have the far right take over
Hey, why not both?
Don’t forget the other 16 years under Kohl from 1982 to 1998. Basically we have been CDU governed for more than 3/4 of the last 40 years. And because people are upset that some changes are necessary now they are going to vote CDU again (or worse).
That is not what the article says at all though. It solely blames the SPD and current government. It‘s just good old German bashing without much substance.
Actually, there’s this:
These outside shocks have exposed cracks in Germany’s foundation that were ignored during years of success, including lagging use of digital technology in government and business and a lengthy process to get badly needed renewable energy projects approved.
Other dawning realizations: The money that the government readily had on hand came in part because of delays in investing in roads, the rail network and high-speed internet in rural areas. A 2011 decision to shut down Germany’s remaining nuclear power plants has been questioned amid worries about electricity prices and shortages. Companies face a severe shortage of skilled labor, with job openings hitting a record of just under 2 million.
For some reason, they don’t mention the CxU though. I am also annoyed that they don’t mention the debt-stop mechanism which CxU added to the constitution and which FDP is now leveraging to make shitty economic decisions.
They don‘t because they don‘t want you to think about the failures of the conservatives. They even frame problems that occured in the Merkel era as problems the SPD introduced as if 16 years wasn‘t more than enough time to fix those. Of course they do not apply the same logic to current problems but instead put the blame on germany as a whole. And don‘t get me started on their far fetched disgnoses of said problems. It‘s a shit article to say the least.
A 2011 decision to shut down Germany’s remaining nuclear power plants has been questioned amid worries about electricity prices and shortages.
This is just a populist talking point. The nuclear power plants were at or very close to the end of their design lifespan, only covered a small single digit percentage of power usage and produced the most expensive electricity among all the power generation in the country.
While it’s true that this is a populist talking point, some minor quibbles:
- In 2011, nuclear produced around 18% of German electricity. In 2022, that had decreased to 6% as Germany had been shutting off a few reactors each year. Essentially you’re right though, Germany never rivaled France’s 70% nuclear figure and if nuclear were supposed to have a future, Germany would have needed a lot of new reactors and that would have been cost-prohibitive.
- Canada proves that you can extend the lifespan, given significant investment.
- With nuclear, a lot of the money is spent upfront. By the time you make that calculation, the biggest chunk of the money is gone, as long as you don’t build new reactors or perform massive do-overs like Canada did. Thus discussing the economics of already-built nuclear reactors is a bit pointless, unless you’re purely doing it to learn from your mistakes (i.e. prevent building new reactors).
To this day, I don’t understand why digitalization of government operations is a political topic to the degree it is in Germany. I mean, I would expect it to be an internal process, something the bureaucracy would handle. But instead, it’s a significant campaign issue, something that German politicians talk about and have political programs designed around.
It wasn’t a political topic like this in the US. I haven’t seen British media doing it. Maybe some other countries have digitalization as a political issue and just don’t mention it in English-language media, so I’m unaware of it there, and it’s just shown up in English-language German media.
And while I get wanting to be a tech leader in this area or that, I’m skeptical that digitalization of government processes is a major driver of that. Yet it seems to get lugged up every time someone is talking about high tech industry in Germany.
I’ll believe that there are savings to be had, and those might benefit German industry, in the broad sense that reducing government costs is helpful. But I don’t think that digitalizing government is a huge enabler for German domestic high-tech industry.
Every party wants digitalization. But no one managed it so the parties stances are more like “we can do it better than the other ones”
But I don’t think that digitalizing government is a huge enabler for German domestic high-tech industry.
It is when the government interactions are literally the only processes left that can not be done digitally.
Aren’t we all glad the CDU killed our solar and wind industries to protect the interests of the fossil fuel ones?
But the Green Party!!1 /s
die GRööönneennn
This is such an egregious misrepresentation. These industries were subsidised like crazy, brought cheap products to the market with a head start, and when subsidies ran out they couldn’t compete with the Chinese.
Not saying that the German solar industry was in great shape but …
- The Chinese products were heavily subsidized as well.
- The German governments at the time also made sure to kill the domestic market, with its “breathing” installation limits for wind and solar.
2022 Chinese renewable energy subsidies totalled 600 million USD. That’s peanuts.
2020 Chinese renewable energy subsidies totalled 807 million USD.
I was talking about 2010…2015 but you cited very recent numbers. I was talking about producers of polysilicon and panels, your numbers are for solar farms/wind farms/biomass generators. And they don’t seem to be complete, either.
Germany, meanwhile, allocated 4 billion euros annually to subsidize electricity prices for industry.
This plan is opposed by the chancelor and the minister of finance. Safe to say it won’t happen this year.
The link you sent refers to subsidies from previous years that haven’t actually been paid out yet. The Chinese government did the classic play of “here’s some subsidies jokes haha we’ll totally pay you ten years later if you’re not bankrupt by then haha.”
So… Thanks for helping my point, I guess? For a historical perspective, China’s solar PV subsidies have been almost entirely demand-side with the exception of academic research grants, national labs, and poverty-alleviating policies.
It’s not like subsidizing an emerging industry is that unusual: the problem is usually when people keep subsidizing output from that industry after it’s a mature competitor. German subsidies were at, what, 37c/kWh with 8877MW (8760 hours per year, 25% typical daily efficiency) installed in 2010? Those subsidies are massive, so either Germany is incompetent at solar PV development or neoliberal policies don’t work and the government should have been more active in managing the nascent industry.
So… Thanks for helping my point, I guess?
But you do realize that you quoted numbers for the wrong part of the economy in the wrong timeframe!?
For a historical perspective, China’s solar PV subsidies have been almost entirely demand-side with the exception of academic research grants, national labs, and poverty-alleviating policies.
Please let me know when you find any proof of that. There’s a reason why there is an entire solar supply chain concentrated in Xinjiang, rather than some more developed coastal region. (It’s subsidies.)
(it’s cheaper labour and the fact that Xinjiang is literally the perfect place to deploy solar)
The subsidies did not run out. They were cut overnight, without much warning, so the industry could not adapt. Even worse they cut legally guranteed subsidies of already finished projects, meaning nobody in the industry trusted the government anymore, as subsidies cut be cut at any point without warning.
Industry needs a stable planning enviroment. If you cut heavy subsidies do it over time in clearly communicated steps, not overnight and breaking previous gurantees.
While yes, the feed-in tariffs dropped in price and capped eligible additions once 52GW of capacity was installed, this only shook the heavily propped-up domestic market. Had the German manufacturers produced anything better than the rest of the world they could have exported their stuff as German engineering did since forever. However, what they produced was nothing special, solar panels are pretty low-tech that can be produced in China for a fraction of the cost in the same quality so naturally they win out. All the money should have went to the development of high-end solutions that demand engineering and manufacturing prowess and cannot easily be copied, not focus and subsequently rely on shipping lots and lots of units. This is a game high-income countries will always lose in today’s globalized economy.
Two things. First of all when you just decide to shut down all your nuclear power plants, you need to come up with a plan to replace the low carbon electricity in the grid. Solar installations in Germany dropping by 2/3 is really not a good strategy in that case.
Then it was not just solar panel manufacturers, but also tooling manufacturers, who often were bought out by Chinese companies, with Chinese government money. That is the actually intressting part of the manufacturing chain.
Subsidizing them to kickstart them was absolutely right, both from a national and international perspective.
To not reap the reward but let it crumble was patently stupid.
The subsidies worked. Now we have matured, (somewhere else) mass produced technology on scale. It worked so well that now it’s viable without subsidies.
Okay, let’s do it like China.
No way! An industrializing nation with the largest (or second largest) population in the world and without access to cheap natural gas has high emissions? Next you’ll tell me that water is wet and Russia is invading Ukraine.
A core issue that’s dominated Chinese policy is robust access to oil. Meanwhile, the core driver of decreasing emissions in most of the West has been the shift from coal to natural gas.
Nowadays, academics are mixed on the true impact of natural gas because of methane leakage (~3%, but methane being something like a 25x more potent GHG than CO2).
Basicly 16 years of stoping all green projects and then being hit by a fossil fuel crisis. The fact of the matter is that Germany had the lowest industrial electricity prices for decades, by moving the cost to households, which got some of the highest prices in Europe due to that. Gas was cheap and nearly not taxed at all. All of that in a system with clear caps on emissions and well something has to give.
Even worse a massive unwillingness to pay for infrastructure using debt. Germany is in good shape financially and it would be relativly easy to just pay for a lot of infrastrucuture. That is partly happening, but obviously there are also labour, material and time problems making this take years to finish.
Then there is a massive problem with consumption. Wages have not kept up with inflation, while there are worker shortages. Welcome to a perfectly working labour market. Anyway that obviously means less consumption in Germany, which hurts the economy.
However there is no reason that some good governance could not solve it and it is a fossil fuel crisis, which destroys industries based on processes we do not want to use due to climate change. It could be an extremly healthy crisis if managed well.
Wages have not kept up with inflation, while there are worker shortages. Welcome to a perfectly working labour market.
Not to mention the rising right wing anti-immigration rhetoric which doesn’t make it easier to find workers elsewhere.
he fact of the matter is that Germany had the lowest industrial electricity prices for decades, by moving the cost to households, which got some of the highest prices in Europe due to that.
How so?
Two parts really. First of all Germany is using guranteed prices for renewables, but the plant operators still have to sell it on the electricity exchange. So when there is renewable elecricity the prices fall a lot. To still create a fair price the cost for those feed in tariffs obviously cost money, which was added on the electricity price of households and small companies.
The other one is lowering grid operating costs for large consumers to below market value. Those costs again needed to be paid, so they were added to households and small companies.
That ended up with half the cost of German household electricity being taxes and other payments to the government. That massivly delayed heat pump installations and electric car sales in Germany, as they were not able to compete as well with gas heating or combustion engines.
not to forget that we have a lot of industry in the south but the wealthy southern NIMBYs fought against renewables and transmission lines, so the renewable energy in the north was virtually sold to the south but couldnt get there so they had to run the fossil plants there. This “system service” was then paid for by the people in the north. So instead of using clean energy cheaply the people had to pay extra for shutting down plants in the north and run dirty ones in the south.
Of course creating two market zones as called for by experts was fought teeth and nails by the southern states. German federalism with the superiority complex and robbery attitude from Bavaria and Baden-Wurttenberg is a bane on the countries development.
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Nuclear power plants last 40 years or so, before they need a large scale refurbishment or be replaced. All but the last three plants were roughly at that age and even the last three were 35 years old at the time they were shut down. If you want to see why, just look at the issues France has with its aging nuclear power plants in the last couple years.
The decision to close them was purely political as an overreaction to Fukushima.
Yes and no. The og plan was made before Merkel. Merkel slowed the trasition down. But suddently Fukushima hit and the anti nuclear greens had good chances in the upcoming state election. So she closed the powerplans in hope to win an election but the plan was to shut them down anyway but now with less renewables than there should be.
Most nuclear plants operate in a perpetual state of "well we could shut it down with this plan here but we might as well pay more to keep it running since it’s already there. "
They’re like NASA projects: the project timeline is projected to underdeliver because the worst part about these projects is the initial approval and construction cost: once it gets approved, it’s more economical to keep it running than to shut it down and find an alternative.
the running costs also exceed the costs of renewables as the waste issue remains unadressed.
Oh I must have forgotten that storage is free. Silly me.
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It’s not that idiotic when you consider that they still look for an adequate place to store nuclear waste. It’s been over 30 years now.
How come that other countries manage to find places to store the spent fuel?
There is 1 country that’s it
Eh, what? There are many countries with nuclear power plants. It seems like only in Germany it was an unsolvable problem.
And where do these country store their spend fuel? Oh right they haven’t figured it out
There are hundreds of nuclear plants operating all over the world. Looks like they figured out a solution.
Every country will struggle in the near future. Some sooner, some later. To me it seams like we have reached the limits of what we can have. What we have is very badly distributed but it really comes down to how many things, how many computers, shoes, containerships, gold watches, private jets, truckloads of harvested corn, clothes and everything else can there be. We could redistribute and we could recycle but we’re not doing both in any meaningful amount.
Remember, this metric of “worst performing county” takes only the economy into account and with limited resources there is no endless growth.
Btw. This doesn’t mean we can’t be happy. We’re not the economy and we’re not the stuff we own.
We’re not the economy and we’re not the stuff we own.
This realization is still extremely far out for a huge percentage of the German populace unfortunately.
I’d say it’s more the whole western world as a whole, not just Germany.
Yes, that’s true. After all, Germany is still more or less a welfare state with statutory health insurance and so on. To further undermine this in favor of economic competitiveness does not seem desirable to me, for example in view of the situation in America.
Can a welfare state still function with zero or temporarily negative GDP growth?
I am not an economist, but I do think that it is important for a country that its citizens have money to spend, that they are sufficiently educated to be able to participate in the digital world and that they can work productively because they are healthy. From that point of view, I think that this is worth invsting in and that political reform that is predominantly based on sustainable economics would make sence (in Germany, there is a difference between the so-called “Volkswirtschaftslehre” (economics), which focuses on overall political and social issues, and the “Betriebswirtschaftslehre” (business administration), which deals with the successful management of companies - the latter was way more influencial in German politics since the 80s). It just seems to me that the neoliberal doctrine that the market would regulate itself has proven itself wrong by now. So, in my opinion, reforms are needed to put a stop to neoliberal capitalism, which I feel has gone off the rails in the past decades. This seems just necessary to me; especially in the context of climate change. I simply don’t believe that individual companies can operate sustainably as long as they are primarily pursuing short-term profit interests.
Yes? Easily.
Can you still bathe in as much or temporarily less amount of water?
The whole world will have a GDP slump in a couple of decades when the reduced child mortality rates in the global south hit the fertility rate and overall population drops and manufacturers will have to face the fact that fewer people don’t use more washing machines.
Heck without exports the German economy would already have shrunk the last decades, the only reason we didn’t is because other countries developed, buying vehicles, factories and plants, electronics, whatnot. We wouldn’t be able to even begin to consume all that stuff ourselves. “Hey, Germans, buy three million cars to make up for the shortfall!” – nah that’s going to happen what am I supposed to do with a car and the Poles already all drive German cars.
Or, differently put: With the automation tech of ten years ago the whole world could have 70% unemployment and still produce western middle-class living standards for everyone (modulo cars which are a bad idea anyway use public transport). I don’t have exact numbers but Germany on its own, only exporting enough to have a net zero on the balance sheet, should be able to hit around 40% or so, and that’s with the incentives for capital to actually automate still being terribly low (high ROI but also long-term meanwhile in five years it’ll be cheaper). Thus, meanwhile, our unemployment.
As a German who has been living and working overseas (mainly Australia) for over 5 years, coming back to Germany to visit is such a huge culture shock now. It’s so much less developed compared to 20 or 30 years ago (or at the very least it stagnated), everything is slow and the economy depressing.
Even things that are meant to be easily done online like tax returns are a huge pain. You need to verify yourself by scanning your ID or getting a physical letter with a code sent to you. It’s ridiculous. In Australia you simply log in into your myGov account and handle everything from visa applications, tax returns, health records, welfare payments, child support etc all on one website. It’s super quick and easy.
And unlike Germany, government lingo is easy to understand and accessible. I feel like Germany is purposely trying to keep things as complex as possible to the point where many people have to hire an accountant for tax purposes
In Australia you simply log in into your myGov account and handle everything from visa applications, tax returns, health records, welfare payments, child support etc all on one website. It’s super quick and easy.
This sounds like a security and privacy nightmare. As much as german bureaucracy is over the top in many situations but having to wait one time for a verification-letter for your ELSTER-account is not among the problems.
It’s not though because it’s all 2FA.
And it’s not like you’re forced to use it either, if you prefer to opt out you can still walk into a Govt service centre and be served in person without needing an appointment. Just walk in
Und nebenbei: Tausendmal besser als die ganzen Horrorgeschichten von Immigranten die monatelang auf einen Termin beim Einwohnermeldeamt warten weil alles zigmal länger dauert 🫢 Hier ginge das einfach online und während man auf das Visum wartet hat man ohnehin eine vorübergehende Aufenthaltsgenehmigung mit Arbeitsrecht usw. Deutschland ist dahingehend einfach ein Albtraum und überhaupt nicht der gegenwärtigen Situation angewachsen. Also laber mir nix. Lächerlich einfach
myGov has mandatory 2FA for all accounts. I’d be more worried about the hundreds of decades old systems that handle this data every day than a modern, convenient front-end for viewing and filing stuff
Norway also just has the same though spread over many sites and services, and also is two factor. The most common system is using a bank connected verification. Older people stick to the the old physical code generator that is shipped to you, while most use the more convenient “accept the phone popup” and input a pin there.
Its not the only way, but the one I use. And it works for a lot, down to insurance. It’s honestly a great and somewhat safe (bar bad choices in developing the system of course) way to always have access to the big things if you need them. When I got a loan for my first house I pretty much only interacted through few phone calls and using my phone to access the bank and other relevant sites, while at work.
It is troubled in some ways, when that solution has technical problems it prevents access to a lot of other services. But even with delay, that seems way more fast than waiting for mail. It’s also the very epitome of a system that fully has you tracked and connected through an online ID across platforms. But Norway isn’t quite dystopian yet at least. I also think it gives you some trouble if you are immigrating or living here medium term, since you do not have access to all of this immediately.
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i remember seeing videos of french firefighters getting attacked by police during protests. The image was completely surreal and very eye opening as to how dysfunctional french government is.
Christian Kullmann, CEO of major German chemical company Evonik Industries AG.
Kullmann is for it: “It was mistaken political decisions that primarily developed and influenced these high energy costs. And it can’t now be that German industry, German workers should be stuck with the bill.”
Well, I mean, if you want the German government to cover the cost, they don’t magic money up out of the air. They get it via taxation of industry and workers.
If what you’re saying is “I am running a company in an energy-intensive industry and I want subsidies paid for by non-energy-intensive industry,” okay, but you’re still pulling it from industry and workers.
Those companies had decades to transition their production processes to be more efficient and most of them actively lobbied against such policies that would enforce it onto them. 🎻
magic money up out of the air
I am not an economist by any stretch but I’ve understood this much: The ECB literally can create money out of thin air. The issue is just that money in and of itself is meaningless. The interesting bit is the ratio of money in circulation vs. goods/services available for purchase.
Even expanding the money supply doesn’t “magic money up out of the air” in the sense to which I’m referring.
If the ECB expands the money supply, it generates inflation. That effectively taxes everyone holding euros or euro-linked assets and transfers the real wealth associated with that to whoever winds up with the new money being created.
Actually, it can’t. The issue is not printing it, the issue is issuing it: The way reserve banking works is that when the central bank wants to increase the amount of money in circulation it lowers the interest rates banks have to pay for ECB euros, which the banks then use to give out loans in private bank euros (hence reserve bankings – the banks can lend out more book money than they hold in ecb money).
The reason why the Eurozone has been in deflation or just barely scraped past is that the banks weren’t willing to give out loans – they were consolidating, reducing risk, because believe it or not they don’t like being nationalised and having bureocrats breathe down their neck. (if nothing else that gets in the way of shady business).
There were talks about “helicopter money”, that is, right-out giving every citizen money, no questions asked, to spend, an excellent idea but the thing never materialised not in the least because the infrastructure to do it simply isn’t there and getting politicians to cooperate in something that looks suspiciously like a UBI (even if short-term and all in all a low amount) is an uphill battle. It’s probably one of the reasons why the ECB is now thinking very loudly about a digital euro as then they could simply do it based on the stability mandate they already have.
Every other country in the world just issues bonds/debt to generate this “magic money up out of thin air”. Yes it’s eventually paid back through taxes but you fix the problems and then the industries your helping pay it back over time. That’s how debt works.
As you point out, if it issues bonds, the government is going to pay that back, plus interest.
The issue isn’t that Germany cannot get access to capital. The issue is that he can’t assert that industry and workers shouldn’t be hit with the bill, because they’re going to be paying it, one way or another. It might be companies in a different sector than his own, which I expect is what he hopes to see. But one way or another, it’s going to be workers and industry.
the government is going to pay that back, plus interest.
Minus inflation.
This is the best summary I could come up with:
Germany risks “deindustrialization” as high energy costs and government inaction on other chronic problems threaten to send new factories and high-paying jobs elsewhere, said Christian Kullmann, CEO of major German chemical company Evonik Industries AG.
From his 21st-floor office in the west German town of Essen, Kullmann points out the symbols of earlier success across the historic Ruhr Valley industrial region: smokestacks from metal plants, giant heaps of waste from now-shuttered coal mines, a massive BP oil refinery and Evonik’s sprawling chemical production facility.
After Russia cut off most of its gas to the European Union, spurring an energy crisis in the 27-nation bloc that had sourced 40% of the fuel from Moscow, the German government asked Evonik to keep its 1960s coal-fired power plant running a few months longer.
These outside shocks have exposed cracks in Germany’s foundation that were ignored during years of success, including lagging use of digital technology in government and business and a lengthy process to get badly needed renewable energy projects approved.
A 10 billion-euro ($10.68 billion) electrical line bringing wind power from the breezier north to industry in the south has faced costly delays from political resistance to unsightly above-ground towers.
Germany grew complacent during a “golden decade” of economic growth in 2010-2020 based on reforms under Chancellor Gerhard Schroeder in 2003-2005 that lowered labor costs and increased competitiveness, says Holger Schmieding, chief economist at Berenberg bank.
The original article contains 1,323 words, the summary contains 234 words. Saved 82%. I’m a bot and I’m open source!
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Wars seems to do this to this country (now indirectly and because of Ukraine’s invasion)… it will rebound the same it did last times.
