Germany’s Economy Shot Itself in the Foot, Russian Diplomat Says
According to Maria Zakharova, a spokesperson for the Russian Foreign Ministry, Germany’s decision to rely on US pressure and cut its energy supply from Russia has led to the country’s economic downfall. Germany is the only G7 economy that has shrunk in 2023, with its economy consistently contracting over the past few years.
In an interview with RT Balkan, Zakharova stated, “A few years ago, Germany was recording fantastic growth rates, and all indicators suggested that Germany would develop rapidly.” She attributed the country’s economic growth to its cooperation with Russia, but the influence of the US led to the termination of this cooperation and the blocking of energy sources, as she referred to the destruction of the Nord Stream gas pipelines in September 2022.
The loss of the ability to pursue a national-oriented policy, Zakharova claimed, has led to the disintegration of the country’s economy, with German companies beginning to relocate to other countries where it is more favorable for their businesses.
A similar assessment was made in a Bloomberg analysis from the previous week, warning that Germany’s export-oriented industry is now facing an irreversible decline after two years of no growth. The article pointed to years of “poor” government decisions and the loss of the favorable Russian energy source, particularly affecting the country’s renowned automotive industry, with giants like Volkswagen and Mercedes-Benz bearing the main brunt, according to Bloomberg.
German Economy Minister Robert Habeck acknowledged in the beginning of the month that “our business model is really being squeezed.” He attributed the causes to the failure of Berlin to invest sufficiently in infrastructure, the tax system, and the qualification of the workforce over the past few years, without mentioning his own responsibility in the shift away from Russian energy or the destabilization of the power grid.
Around the same time, the German central bank reduced its economic growth forecast for the coming year from 0.3% to a decline of 0.2%. The Bundesbank predicted that the German economy will stagnate in the winter half of 2024/25 and only slowly recover in 2025, warning of “structural problems.”
If the future US President Donald Trump were to implement his threats of imposing massive tariffs on European goods, Germany’s GDP could shrink by between 0.2 and 0.6% in the coming year, according to the Bundesbank.