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☆ German budget crisis will haunt economy for years
▼ + stars: | 2023-11-24 | by ( Pierre Briancon | ) www.reuters.com time to read: +4 min

LONDON, Nov 24 (Reuters Breakingviews) - The German government is working hard to demonstrate the foolishness of the country’s iron-clad ban on large budget deficits. The budget crisis will cripple the economy for years to come, for three reasons. The debt brake, which limits structural budget deficits to 0.35% of GDP, has only been suspended for this year’s budget. Public net investment has been negative for 20 years, Marcel Fratzscher, head of the German Institute for Economic Research, has pointed out. The country is not on the cusp of a debt crisis.

Persons: Carsten Brzeski, That’s, Marcel Fratzscher, Christian Lindner, Lindner, George Hay, Streisand Neto Organizations: Reuters, Constitutional, Organisation for Economic Co, Development, ING, German Economic Institute, Public, German Institute for Economic Research, German, Germany’s, Thomson Locations: Europe, Berlin

☆ Germany risks letting a good crisis go to waste
▼ + stars: | 2023-10-03 | by ( Pierre Briancon | ) www.reuters.com time to read: +8 min

Germany, the European Union’s largest economy and its traditional growth engine, is headed towards a contraction this year. Exports account for more than half of Germany’s GDP, compared to just a third in France and 37% in Italy, according to the World Bank. Germany’s growth potential is estimated at an annual 0.7% over the medium term by the Scope rating agency, about half the euro zone average. Exempting net public investment from the debt brake rule would help to reverse years of underspending. Unless they do, Europe’s leading economy risks letting a good crisis go to waste.

Persons: –, Hubertus Bardt, Germany’s, Carsten Brzeski, Oliver Rakau, Chancellor Olaf Scholz, Christian Lindner’s, Sebastian Dullien, Scholz, Destatis, Francesco Guerrera, Streisand Neto Organizations: Reuters, World Bank, EU, International Monetary Fund, Reuters Graphics Reuters, German Economic Institute, ING, Oxford Economics, BASF, Finance, Christian Democrats, Thomson Locations: Germany, Berlin, France, Italy, China –, Spain, Weimar Republic, China, Ukraine

Growth of 0.3% had been expected in the institutes' spring forecasts. The so-called Joint Economic Forecasts are to be presented in Berlin on Thursday. The economics ministry usually updates its forecasts incorporating the results of the Joint Economic Forecasts. For 2024, the institutes - four German and one Austrian - forecast GDP growth of 1.3%, down from 1.5% previously. The Joint Economic Forecasts are prepared by the Ifo Institute, the Halle Institute for Economic Research, the Kiel Institute for the World Economy, the RWI – Leibniz Institute for Economic Research and the Austrian Institute of Economic Research.

Persons: Annegret, Christian Kraemer, Rene Wagner, Maria Martinez, Rachel Armstrong, Kirsti Knolle, Sharon Singleton Organizations: REUTERS, Rights, Reuters, Ifo Institute, Halle Institute for Economic Research, Kiel Institute, Institute for Economic Research, Austrian Institute of Economic Research, Thomson Locations: Berlin, Germany

SL Naturenergie's predicament is common in the renewables sector where companies, from startups to medium sized and blue-chip firms, are competing for a limited pool of labour with appropriate skills. Currently it faces a shortage of around 216,000 skilled workers needed for the expansion of the solar and wind energy sectors, a study by German organisation KOFA, or the Competence Centre for securing skilled labour, showed. In many jobs in the renewable energy sector, pay is above average, he said, citing a renewable energy wage premium of more than 10% in construction and installation activities, as well as architectural and engineering services. Volker Quaschning, a professor of renewable energy systems at HTW university in Berlin, says a third of places on these courses at HTW are unfilled. Last month Germany also unveiled draft reforms on skills training accreditation and promoting immigration in a bid to plug labour shortages in the economy.

☆ Just how bad was the war in Ukraine for Europe’s biggest economy last year?
▼ + stars: | 2023-01-13 | by ( Anna Cooban | ) edition.cnn.com time to read: +7 min

London CNN —Germany’s economy grew slightly last year despite battling an energy crisis sparked by Russia’s war in Ukraine. The bank predicts the German economy will stagnate this year, rather than decline, as it had previously forecast. Tobias Schwarz/AFP/Getty ImagesEither way, it’s welcome news for Europe’s biggest economy. “The German economy has been more resilient than initially feared,” Jan-Christopher Scherer, a research associate at DIW Berlin, told CNN. About 40% of German companies expect business to decline in 2023, and another 35% think it will stagnate, according to a November survey of 2,500 firms conducted by the German Economic Institute.

☆ Around 40% of German companies expect output decline in 2023 - IW institute
▼ + stars: | 2023-01-09 | by ( ) www.reuters.com time to read: +1 min

BERLIN, Jan 9 (Reuters) - Four out of ten German companies expect business to shrink in 2023, a survey by the German Economic Institute (IW) showed on Monday, blaming high energy costs, supply chain issues and the continuing war in Ukraine. However, they remain at a high level and production disruptions cannot be ruled out," the IW said in the survey seen by Reuters. The survey of around 2,500 companies showed that around a third of companies expect output to stagnate and the remaining quarter predict business will grow. The outlook is particularly bleak in the German construction sector, where more than half of companies surveyed by IW expect a decline in production and just 15% anticipate more business. The picture is barely brighter in industry, where 39% of surveyed companies forecast a decline, driven by a cautious assessment in the consumer and basic industries.

☆ Germany's half-a-trillion dollar energy bazooka may not be enough
▼ + stars: | 2022-12-15 | by ( Christoph Steitz | ) www.reuters.com time to read: +8 min

Almost half a trillion dollars, and counting, since the Ukraine war jolted it into an energy crisis nine months ago. The money set aside stands at up to 440 billion euros ($465 billion), according to the calculations, which provide the first combined tally of all of Germany's drives aimed at avoiding running out of power and securing new sources of energy. That equates to about 1.5 billion euros a day since Russia invaded Ukraine on Feb. 24. Energy rationing is a risk in the event of a long cold spell this winter, Germany's first in half a century without Russian gas. There's no security in sight either, with the push to build up of two alternatives to Russian fuel - liquefied natural gas (LNG) and renewables - years away from targeted levels.

The visit — the first by a G7 leader to China in roughly three years — comes as Germany slides towards recession. A spokesperson for Hamburger Hafen und Logistik (HHLA), the company operating the port terminal, told CNN Business on Thursday that it was still negotiating the deal with Cosco. “The restrictions are suffocating economic growth and heavily impact China’s attractiveness as a destination for foreign direct investment,” he told CNN Business. The ministry did not respond to a request for comment from CNN Business. He predicted that “the large majority will stay committed to the Chinese market and is expecting to expand their business.”Companies appear to be toeing that line.

☆ German economic institutes see 2023 contraction as gas crisis hits
▼ + stars: | 2022-09-29 | by ( ) www.reuters.com time to read: +1 min

BERLIN, Sept 29 (Reuters) - Four leading German economic institutes have almost halved their spring economic growth forecast for Europe's largest economy this year and slashed their 2023 projection to -0.4% from 3.1%, they said on Thursday. The four institutes now expect 1.4% growth this year, down from 2.7% seen in the spring. "The crisis on the gas markets is having a severe impact on the German economy," said the four institutes - Munich-based Ifo, the Kiel Institute for the World Economy (IfW Kiel), the Halle Institute for Economic Research (IWH) and the Leibniz Institute for Economic Research (RWI). "Soaring gas prices are drastically increasing energy costs, leading to a massive reduction of the purchasing power," they added in a statement. Register now for FREE unlimited access to Reuters.com RegisterReporting by Klaus Lauer and Paul Carrel, Editing by Miranda MurrayOur Standards: The Thomson Reuters Trust Principles.

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