Germany, the “great sick man of Europe”: stagnant economy and dangerous advance of the far right

The year 2023 that has just passed confirmed this Germany is the great sick man of Europe. The largest and most important power in the 27-country European Union, fourth in the world, ended with a disappointing -0.3% in its economic performance and the most optimistic note that in 2024 only a meager positive result could be recorded around 1.2%.

While the government of Social Democratic Prime Minister Olaf Scholz is increasingly unpopular and polls reveal that the future is one of greater wear and tear, the concrete specter of a dangerous growth of the far right offers a dramatic future that is spreading across the continent.

These days the country is overwhelmed by thousands of tractors parading through the cities, loaded with farmers protesting because the centre-left government has taken away their tax benefits. In Berlin, the capital, the commotion was notable.

There have also been important concentrations in other cities, which have continued, and have recorded the very active presence of far-right movements and parties. The most feared is the Alternative for Germany (AFD). It was born in 2013 as a political force against the increase in immigration.

In some protests, speakers from the most feared right in a nation that was ruined by Adolf Hitler’s regime nearly 80 years agosome far-right speakers did not shy away from anti-foreign arguments and claims of German racial character.

“National identity” and the expulsion of immigrants

In the mobilization of Alternative for Germany in the protests in support of the farmers, a special emphasis on ultramontanes suspected of connotations of Nazi ideology. The leader of Altervnativa, Aliicia Weidell, mentioned the initiatives in defense of national identity. You were shocked because there is an initiative to create a state in North Africa where up to two million immigrants would be sent.

A campaign is growing calling for early general elections which would sink the “traffic light” government, so called because it is the result of an alliance between Social Democrats (red), Liberals (white) and Greens.

A poll reveals that 55% of those interviewed are in favor of calling voters to the polls in this country of 83 million inhabitants where discontent grows.

Analysts are confident that the government will not give in to a probable no vote. But the weakness of the “traffic light” may reflect the wear and tear of the Bundestag, the Parliament, and open the doors to negotiations between parties at parliamentary level. Germany is a federal country in which the authorities are elected by the Chambers of Deputies and Senators.

In June there will be European Parliament elections which will serve to measure the balance of power at the national level in the 28 member countries. The right is pushing to make way for unprecedented change, which eliminates the alliances that have always governed the European Union. Historically, the alliance between conservatives, centrists and socialists, who demand liberal democracy, dominates.

Political storms

Significant progress by the right would usher in a period of political turbulence fueled by economic stagnation.

The event that is already shaking the German landscape are the elections in three states in the east of the country: Saxony, Branderburg and Thuringia. In all three the Alliance for Germany predominates, with 28%, which some polls bring to 30%.

At the center, in addition to the three official parties, there is the CDI/CDU bloc, of centrist Catholic origin, which is the main national political force. This historical bloc that has governed for many years is isolated. It was replaced by the alternative of agreements between socialists, liberals and greens.

Given that at times they all governed together, the difficult reality would favor a reunion with the Christian centrists, who account for about 35% of the vote, who revel in their Bavarian fortress.

The problems of unpopularity of the “traffic light” government spread to destabilizing wave which goes far beyond German borders, penetrating the partners of the 27 million allies who are part of the European Union. They who bear the damage of a Germany that has stopped being the protagonist of the economic and social “miracle”, to already suffer two recessions after having gone through a profound crisis due to the Covid pandemic, which has punished healthcare and the German economy in 2021. -2022.

After the long government of the Christian Democrat Angela Merkel, which most Germans remember with nostalgia, many Germans even angrily evoke that recent, but apparently distant, era of global respect for Merkel combined with a moment of great economic and social development . . Now they have experimented (like the rest of Europe) the return of inflation that is being tamed. At a popular level, many have suffered a loss of purchasing power and increased unemployment.

Since the Covid pandemic, unemployment has fallen to 8.1 million workers in the manufacturing sector. The number of small businesses which provide very important support for the economy has also been reduced.

In 2023, sales of commercial properties halved and even in the real estate sector, house prices recorded a decline of 1.5%.

But almost 60% of Germans consider their position to be good. Only 10% rate it negatively. But in the prestigious ZDF survey, those who judge the country’s economic situation as good reach only 14%.

The government, with declining popularity

Two out of three citizens support the “traffic light” coalition in power, the three parties in government together garner 30% of popular support and, according to the latest polls, 79% of Germans are dissatisfied with the government itself.

Last year the industry, which represents 20% of national activity, contracted by 2% with significant drops in the chemical and metallurgical sectors which had suffered greatly from the crisis which had left Germany without the energy that gas pipelines Russians supplied following the war with Ukraine.

A galloping inflation that reached 6.5% in 2022 in a Europe that has lived for years with zero inflation, slowing down domestic demand and exports affected by the global crisis of 2021-2022. Official Ruth Brand said that in 2023 “prices remained high at all stages of the economic process and slowed growth.”

The crisis has increased the growing demand for failures by industrial companies.

In the European Union it is growing the fear that Germany’s difficulties could have repercussions on the rest of the continent and that hopes for the start of a cycle of lowering interest rates remain frozen.

State aid from the European Union to its members has reached 742 billion euros. Germany received 360 billion.

The Union’s Commissioner for Economy, former Italian Prime Minister Filippo Gentiloni, explained that in the third quarter of 2013 there were “twelve countries in the Union with negative growth and thirteen with very low growth”, in total 25 nations out of a total of 28.

Italians are worried because Germany is the peninsula’s top export market. In 2022, trade between the two nations reached 168 billion euros. German weakness could affect Italian industries that are more integrated into global value chains.