The Hannover trade fair, which just opened recently, could be a shot in the arm for the German economy. The German media reported: "Chancellor Olaf Scholz looked very optimistic at the opening ceremony, but the overall atmosphere is still not good. Siegfried Russworm, President of the Federation of German Industries, warns: "Don't fool yourself, the overall downward trend in German production figures has been very worrying for many years". ”
According to the latest forecasts from the International Monetary Fund (IMF), Germany's economy will grow at a slower pace this year than any other industrialized country.
Stefan Schaible, head of the consulting management company Roland-Berger, was interviewed by Der Spiegel. He explained "why the Germans are afraid of taking risks" and "whether the traffic light government is still capable of turning the tide". In short, he believes that "the German economy needs one thing above all: a new spirit".
Spiegel: Mr. Schäibler, there is a sense of pessimism in most areas of the German economy at the moment. Is the situation really that bad?
Schäibler: What I see is that the German economy still has incredible potential. But at the moment there is a problem with our national spirit.
Spiegel: What do you mean?
Schaibler: The current status quo is that there are too many vested interests, too much fuss, not enough innovation and competition. I hope that there will once again be a culture of getting things done in Germany.
Spiegel: You mentioned too many people with vested interests, who are you referring to?
Schaibler: It's a social phenomenon. Our economic situation is difficult, especially the competitiveness of our industry is threatened, and we must hold on and resolve this issue decisively. But on the other hand, society as a whole does not feel the pressure because there is no sense of crisis.
Spiegel: Why is that?
Schaebler: First of all, the current crisis is not going to cause massive unemployment, there will not be mass unemployment of five million people. Second, the average age in our society is increasing year by year, and more and more elderly people are risk-averse. And focus on protecting your retirement. This is perfectly reasonable for the individual, but bad for society.
Spiegel: So should there be anything to be done in politics?
Shaipur: Now the government has to step in and tell people that prosperity is at risk, even if we're still doing well. But we must start innovating at scale now. This comes at a cost.
Der Spiegel: The promise of the TL is actually more ecological and economic. Are you disappointed with the results?
Schaibler: It's interesting that when there has to be a rally, like in response to the war in Ukraine and the energy crisis, the traffic light coalition is actually well managed, and the opposition of individual parties is sometimes skipped. For example, at least two of these three were not previously enthusiastic about Germany's increased military commitment. But so far, they haven't really succeeded in the economic sphere. It's a shame. (For a moment, I can't tell whether it's praise or irony)
Spiegel: What does the government need to do to move things forward?
Schäbble: They must focus their last year and a half in office on identifying the key areas where Germany needs to act. In addition to industrial transformation, it includes the promotion of innovation, debureaucratization and migration of skilled workers, among others. Maybe they can try again.
Spiegel: What if that doesn't happen?
Shaipur: If we miss this one and delay it for another three or four years, then we will lose economic prosperity, including the quality of material life. We have to maintain our existing production capacity. When this is lost, society changes. This can be seen in the Anglo-Saxon countries such as the United Kingdom, the United States, etc., which have undergone drastic deindustrialization.
Spiegel: Do you see Germany at risk as well?
Schaible: Yes.
Spiegel: Aren't companies also responsible?
Schaibler: The driving force has to come from the business. Businesses have to do 70% - 80% of the work themselves. They must clearly tell the government what they need. Both sides must agree on achievable goals. The prerequisite is that every time there is a change of government, all the policies that have been agreed upon will not be abandoned. This is, of course, a challenge for democracies that require political change.
Spiegel: What advice do you have?
Schayble: Parties can agree on a clear budget strategy as part of a revised debt brake. Consumer spending, such as investment, must be limited, but at the same time it must be determined which medium-term investments are necessary to achieve the transition, which must be agreed upon in the contract and should not be easily reversed or reversed.
Spiegel: From an economic point of view, does Germany also have an image problem?
Schayble: Germany is undoubtedly attractive to many international companies. If we weren't so complaining and picky, people would come here too. But things often start with the details: if a country feels like one out of every two escalators is bad, it must say something. We must also project Germany as an efficient country. This includes acknowledging our shortcomings, but also making it clear that we will eliminate them in five years. We can't just say, "We're going to get through it somehow," you have to show your vision for everything.
Der Spiegel: Elections will be held in three eastern German states – Saxony, Thuringia and Brandenburg – this year: the AfD is leading in opinion polls everywhere. If the AfD wins, will it damage Germany's position?
Schaible: Yes.
Spiegel: Why?
Schaibler: Because I think that at a time when we need more immigrants to Germany to ensure social prosperity, allowing the AfD to talk about immigration is going to underperform the economy. The AfD would even put Germany's exit from the EU on the agenda, even though our share of exports is around 50% of economic output. It is important to take a clear stance on the economy.
Spiegel: Does the AfD's entry into state governments mean that much-needed skilled migrants are no longer heading to East Germany?
Schaebler: When people talk about where they want to work, feeling comfortable is definitely an important factor.
Spiegel: Do we need more immigrants because we don't want to work anymore? Treasury Secretary Christian Lindner recently called for tax incentives for overtime to make extra work more valuable.
Schayble: I don't know if the idea of overtime is correct because it can be difficult from a tax perspective. But I think it makes sense to think in that direction. You can ensure greater flexibility when it comes to working hours through collective agreements.
Spiegel: In other words: have the Germans become lazy?
Schaibler: No, but we did put ourselves in a disadvantageous position because we repeatedly said to ourselves for a long time: if something goes wrong, the state can intervene. Now young people are entering the job market and have very good career prospects. I'm a little envious of this generation. When I was training, I didn't know if I would be able to get a job. I don't think people are getting lazy today. But we must all realize that we need to make the cake bigger before we talk about distribution. I think our country needs to realize this again, and we have to be hungrier again.