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While fighting to save its #manufacturing sector, German policymakers may have overlooked the growth potential of the country's #services sector, which is proportionally smaller than in comparable European countries, but growing. Read this detailed analysis by Maria Martinez Romero, which I edited, to understand what are the barriers that hamper growth in this area. #Germany #Scholz #politics #economy #macro #EU #industry https://lnkd.in/deYtme2V

Germany’s economic engine is slowing, with GDP contraction and business confidence at its lowest since 2020. Structural challenges like high energy costs, excessive bureaucracy, and global competition are reshaping Europe’s largest economy. What does this mean for investors? Can Germany adapt to reclaim its competitive edge? Explore the opportunities and risks in our latest analysis. https://lnkd.in/eMKCFs5J

Foreign Partners’ Stability is Key to Hungary’s Economic Outlook. The German-Hungarian Chamber of Industry and Commerce (DUIHK) presented its autumn business survey, highlighting challenges faced by the Hungarian economy amid global and regional uncertainties. András Sávos, DUIHK President, emphasized that risks from weak German growth and potential US policies threaten Hungary’s economic stability. Investment sentiment remains subdued, with more firms planning to cut spending than increase it. A quarter of companies aim to expand their workforce, while 19% foresee reductions, with industry showing higher hiring prospects (28%). Hungary’s labor costs rose 66% from 2019 to 2024, the highest in the region, though recent growth expectations have slowed, reflecting eased market tensions. Competitiveness concerns persist as only 38% of firms reported improvements over five years, while 23% noted declines—the worst figure regionally. Sustainability requirements are seen as enhancing competitiveness, yet Asian investors are perceived as major competitors, particularly in industry. The German economy’s stagnation and potential US tariffs could disproportionately harm Hungary, compounding these challenges. Surveyed companies expressed widespread pessimism, with half rating Hungary’s economic outlook as poor, and just 10% anticipating improvement. SMEs are particularly concerned, and demand trends remain the top risk, cited by 73% of respondents. Hungary faces mounting challenges, but the labor market’s resilience offers some hope. However, as Dirk Wölfer of DUIHK warned, addressing investment and demand constraints will be crucial for restoring business confidence. Related articleEconomic Neutrality and Investments to Offset Dependence on German EconomyThe investments will give a new impetus to the Hungarian industry.Continue reading Via MTI; Featured Image: Facebook / BMW Group Gyár Debrecen The post Foreign Partners’ Stability is Key to Hungary’s Economic Outlook appeared first on Hungary Today. https://lnkd.in/dKmECnbz

Too cautious to compete? Accelerating the German economy. In the newly launched #BGDInsights series, Fabian Billing, Managing Partner Germany and Austria at McKinsey & Company, discusses what Germany can do now to remain globally competitive. Key messages for me: “#Technology certainly is one key to competitiveness. Technology, however, only achieves its transformative value when a clear strategy, culture, and capabilities meet execution and delivery.” “Looking in the rear-view mirror or trying to copy what was successful elsewhere years ago is not a recipe for success. We need to lead from the front.” “Most importantly, government and industry must work together to strengthen our economy’s global #competitiveness.” The full text is available here: https://lnkd.in/d58Rx6Rm #60JahreMcKinseyDeutschland, Berlin Global Dialogue

Policy and industrialization find themselves at a crossroads, specifically with the example of the Draghi Report. The European continent finds itself behind in competitiveness on many measures, and the report's answer to this is generally: investment. The thinking here is that investment leads to innovation. This certainly can happen, but it will take big changes in the costs of doing business before we see a significant increase in European businesses in our supply chains. Challenges abound for all the areas of European industry, including the rise of right-leaning politics, and a reluctance for deeper EU integration. There are real trade-offs to consider between competitiveness and traditional European perspectives. Can the EU become more like the USA? Would they even want to? What will it mean for the global industry? #DraghiReport #Policy #Innovation #Investment #Competitiveness

Yes, we need to innovate! Europe is facing a crucial challenge according to a current Guardian article: https://lnkd.in/dvM6ysy8! A recent report by former Italian Prime Minister and ex-ECB Chief Mario Draghi warns that the EU faces a “slow and agonising decline” unless decisive investments and coordinated policies are implemented. He calls for an annual investment boost of €750-800 billion – about 5% of the EU’s economic output – to end years of stagnation in productivity. Draghi highlights that the war in Ukraine and the aftermath of the pandemic have shifted the rules of international trade to Europe’s disadvantage. The EU must urgently foster more innovation, entrepreneurship, and investments in a green and digital future. Particularly alarming is the fact that many European unicorn startups are relocating abroad, especially to the US. At TU Wien – Academy for Continuing Education, we are aware of the urgency of this situation and are offering Executive MBA Programs for #Innovation & #Strategy to equip leaders with the skills needed to future-proof Europe. Now is the time to come together and bring Europe back to the forefront. Let’s shape the future through strategic innovation, entrepreneurship ... and targeted investments also in your own future in order to be one step ahead! #Innovation #Entrepreneurship #ExecutiveEducation #FutureOfEurope #TUWien #Leadership #MarioDraghi #InvestInEurope

Germany, the third largest economy in the world, recently floated policies restricting or eliminating personal vehicle travel on the weekends, reminiscent of those put in place on Sunday travel in the mid-1970's during the oil embargoes (I remember we had to ensure all our shopping was completed on Saturday). Policies with economic impacts on an already faltering economic base. Faced with an economic performance challenge, Germany industry requires action to reverse the post-pandemic trends. #economics #leadership #industry #manufacturing #investment https://lnkd.in/gg4gCnQ8

Germany faces currently many challenges, probably more than most other large European economies. Why has come one of the strongest economy in the world so much under pressure? This article offers in my opinion a very good insight!

If Germany Falls, Europe Follows: An Economic Overview. The Current Crisis in Germany Germany's economic model is in a precarious state. Its foundational industries, particularly in manufacturing, are experiencing a steep decline, which is now impacting the services sector and the overall private sector's activities. The contraction of GDP reflects this distress, deviating from its once-steady growth trajectory. Consumer spending, another critical economic indicator, is also weakening, further emphasizing the fragility of the economy. Public spending, in contrast, has surged, creating a risky imbalance. This growing reliance on fiscal stimulus highlights underlying vulnerabilities that threaten economic stability. Energy Policy Missteps Germany's energy policies exacerbate the situation. The dependence on renewable energy sources, such as wind and solar, fails to ensure reliable energy supply around the clock. This shortfall is especially detrimental to industries requiring uninterrupted power, including advanced data centers that support AI technologies. Additionally, stringent carbon emission regulations disproportionately affect Germany due to its industrial-heavy GDP composition. This has diminished its global competitiveness, especially against the U.S., China, and India. Tariffs and Regional Risks Germany and Europe face mounting challenges from increased tariffs imposed by major trading partners like the U.S. and China. Combined with the inability of southern European governments to control public spending, this creates a region-wide economic dilemma. The Decline of the Euro Reflecting the broader economic struggles, the euro has been on a downward trajectory since 2011, dropping from $1.50 to around $1.04. This persistent decline mirrors the weakening financial outlook of the European Union. Broader Implications Germany’s struggles are not isolated; they represent a potential domino effect. A German economic collapse would have severe repercussions across the European Union. Given its central role in the EU’s economy, Germany’s failure could trigger a systemic crisis. What Can Be Done? As individuals, understanding and preparing for these challenges is vital. Staying informed, diversifying investments, and advocating for policy changes that promote sustainable growth could mitigate some risks. Final Thought Germany’s current situation is a cautionary tale for Europe. The need for a balanced approach—focusing on industrial revival, energy reliability, and economic reforms—is more pressing than ever.