what’s next for Germany ?

On the outset of 2016 one may wonder where the next growth engine for world economy may come from. As the potential lenses in the world is so complex I concentrate on my native Germany as a point of reference. Germany in the last 10 years has gone trough 4 distinct phases I labour market reform II BRIC’s driven Export Boom III European Fiscal Crisis (ongoing) IIII national consume and property boom.

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Germany is always showcased as such a robust and rich county but on neutral observation quite the opposite is the case. Germany’s debt ratio stands at +80% of its mighty GDP and our government has not been able to live trough a self sustaining budget for decades. Germany depends on international goodwill and trust to maintain low interests on government bonds.

The country’s overall state after 10 years of European banking / credit / fiscal crisis is not great and on this foundation falls the just starting migration phenomena.

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The question I’d like to analyse here is what next trend / macro economic development can be a wealth creating replacement for BRIC’s export and national consumerism?

I ascertain 3 possible avenues of growth

 

  • Germany pioneers clean energy creation and becomes a role model for a clean energy nation (e.g. by way of tax incentives for clean transportation, free & modern public transport)
  • Germany investigates what unique advantages it can derive from the changed citizen structure (1 million non Christian migrants in 2015) and puts this to advantages to work
  • Along the lines of a loosening EU framework Germany could create an attractive environment for foreign investment by lowering corporation tax, income tax and VAT and make smart tax distinguishing’s

Whichever avenue you glance at; the era of easy growth are surely over; emerging markets are oversold on German cars and production machines, the German citizens will soon have over- indebted themselves on consumer products and far overvalued apartments.

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In global comparison Germany still has some advantages e.g. the strong industry, but the output of this industry must be smartly changed to continue to prosper.

I would like to see a debate unfolding on what strategic options Germany has to maintain its status as a wealthy and well caring nation.

 

Maybe this blog post could be a humble starting point?

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