Article by Eric Worrell
“Transformation means change. Change often means consolidation. Companies need to downsize to be able to invest in and develop new technologies.
Germany's economy struggles to recover, more layoffs are coming
go through Liv Stroud
Posted on 06/09/2024 – 14:10 GMT+2 • Updated 14:55
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“German companies have moved a lot of production to China, India and elsewhere, and this will continue,” Fratzscher said.
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Can the German government assist?
Fratscher said he doesn't think the government should intervene to retain workers.
“Transformation means change. Change often means consolidation. Companies need to downsize to be able to invest in and develop new technologies,” he said.
Fratzscher also pointed out that the government's attempt to preserve the old structure of large companies is not limited to Germany, but is also a European phenomenon.
“Old, redundant parts of the economy often need to disappear before new parts can emerge, re-emerge or develop,” he added. He said there were no short-term solutions to these crises.
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Learn more: https://www.euronews.com/business/2024/09/06/more-job-cuts-on-the-way-as-german-economy-struggles-to-recover
“Fratzscher” is Marcel Fratzscher, director of the German Institute for Economic Research (DIW).
Marcel Fratzscher certainly had impressive economic credentials, but he misunderstood the situation.
German companies are not “disappearing” the excess parts of their operations, but moving them to Asia. If these businesses truly ceased to be useful, they would disappear from the world.
When kerosene replaced whale oil for heating and lighting in the 1860s, instead of moving the whale industry to other countries to cut costs, companies entered the mineral oil industry or were quickly wiped out by those who did.
The only thing stopping carmakers and other energy-intensive businesses from thriving in Germany are German politicians. German companies can regain at least some degree of economic competitiveness by moving to countries with cheaper energy.
As for Fratzscher’s prediction that the German economy will recover within a few years, why should the German economy recover? Stores that charge exorbitant prices and refuse to accept free market guidance have no hope of future prosperity.
Green energy cannot be competitive, and there is no economically viable way to convert unreliable green energy into the dispatchable energy that a modern economy requires. The German economy will continue to decline until the politicians who set this disastrous economic direction are replaced by politicians who are less ignorant of real world economics.
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