German economy in structural crisis, admits Merz.
Chancellor acknowledges that challenges are deeper than simple economic weakness and cites falling profits at Volkswagen and BMW.
247 - The German economy is going through a structural crisis and not just a period of "temporary weakness," Chancellor Friedrich Merz admitted. The statement was made last Saturday (24), during a speech to members of the Christian Democratic Union (CDU) in Osnabrück, a city in Lower Saxony and home to the Volkswagen car manufacturer. The information was published by RT.
“We are not just in a period of economic weakness, we are in a structural crisis of our economy,” Merz stated. The chancellor acknowledged that getting the country back on track has proven more difficult than he imagined: “I say this also in a self-critical way – this task is greater than some could have imagined a year ago.”
The automotive sector as a symbol of the crisis.
In his speech, Merz highlighted that large sectors of the German economy “are no longer truly competitive.” To illustrate, he cited Volkswagen, which recorded a 36% drop in net profit in the second quarter of 2024. The Chancellor described the result as “one of the many messages” that reveal the seriousness of the situation.
Merz warned that, starting this week, no one should be under any illusions about the depth of the challenges facing the German economy. While praising the quality of products and the attitude of business leaders, the political leader stressed that "the basic conditions in Germany simply haven't been good enough over the last decade."
Another giant in the automotive sector, BMW, also announced a 29% drop in profits in the first half of the year compared to the same period last year. The series of negative results from companies that symbolize the country's industrial strength has fueled fears about the future of the European Union's leading economic power.
Worrying projections
Germany faced a recession in 2023 and, according to projections from the International Monetary Fund (IMF), is expected to register zero growth in 2024. The combination of stagnation and loss of competitiveness in strategic sectors reinforces the perception that the problems go beyond cyclical fluctuations and constitute a structural crisis.
