The coronavirus pandemic was only a catalyst for the collapse of the German economy, built on an extremely shaky basis.
About this on Thursday, May 14, the agency Bloomberg writes.
As noted in the publication, the GDP data that will be presented this week will reflect not only the “steep peak” of Europe’s largest economy, which began in March, but also the fact that “its ramshackle engine was already in need of repair”. Tomorrow it will become clear how catastrophic the damage for the first quarter of 2020 has become. Federal tax revenues could fall by € 50 billion in 2020.
“Fiscal consolidation over the past 10 years has not affected our ability to withstand this crisis,” said Christian Odendal, chief economist at the Center for European Reforms in Berlin.
The German economy faced problems back in 2019, showing the slowest growth in the last 6 years. An export-dependent system crashed in the wake of the Washington trade war. At the same time, the automobile industry was desperately struggling with the consequences of the environmental scandal, hastily introducing electric motors.
As noted in Bloomberg, now, after the coronavirus pandemic, it may take more than just money to rebuild the German economy. Berlin needs a new vision if they don’t want the German economy to be “on the sidelines of global growth”.
“Perhaps higher investments would make Germany more stable, perhaps it should reduce taxes or become less dependent on foreign demand and cars,” said Christian Schulz, director of European research at Citigroup.