I'm always wondering who is writing these articles about Germany and why. They criticize Europe in general, but the main focus seems to be on Germany.
Because it's EU's beigest economy and saw the biggest economic drop in the block due to its poor political decisions on over-reliance on cheap Russian gas and cheap labor to maintain competitive exports.
It's not some conspiracy, but genuine concern that if EU's richest country is struggling, the rest of the EU members will bear some of the fallout too.
Whether we like it or not Germany has always been the benchmark in Europe. If the Danish or Austrian economy would drop by 0.5% probably nobody would care, but if the EU's richest members like Germany and France were to do that then it's more concerning for everyone. That's why Germany pops up a lot because it's a very important member of the block.
[0]: https://energy-charts.info/charts/energy/chart.htm?l=en&c=DE...
[1]: https://energy-charts.info/charts/energy/chart.htm?l=en&c=DE...
[2]: https://energy-charts.info/charts/energy/chart.htm?l=en&c=DE...
Btw., those aren't even really low. Heavy industry, data centers and other energy-intensive industries are migrating heavily towards 1-digit-cent-per-kWh countries, so <10ct/kWh.
FWIW the answer is not to prevent corporations from leaving the country either. That's silly. The answer is to apply carbon emission regulations to the entire supply chain of a company and to make the fines/fees more expensive than the money a business can save from moving somewhere else. Businesses act on what makes financial sense. If you want to change how businesses act, you need to change what makes financial sense for them.
However, the scenario this will lead to is: Industry will still leave high-energy-price areas. If low-energy-price regions can be found within the EU, industry might go there. Otherwise industry will be off to wherever in the world is cheap and happily charge the EU carbon import duties to EU customers. The rest of the world will enjoy low-priced not-carbon-neutral products that the EU will never be able to compete with because of economies of scale.
The only viable ways out of this isn't import duties but import restrictions, i.e. outright preventing goods that are not up to EU CO_2 standards from being imported. That will lead to local CO_2-neutral industries that have to be continuously walled off, because if they are exposed to the rest of the world they will be too small and expensive. The other way is a global agreement on CO_2 standards, such that those kinds of import regulations are unnecessary.
Which can be a blessing or a curse depending on how you look at it.
See for example China: who have signed plenty of environmental treaties yet are dumping nuclear waste in the oceans on a large scale. Hell, China isn't even protecting their own people or nature just to avoid transporting the waste to the ocean. Rivers can do that for free, you see. To fully demonstrate how governments work, they lie about doing this (despite the fact it can be very easily measured), and secondly they criticize other countries for doing much less (such as China now criticizing Japan being forced into dumping some Fukushima cooling water)
The other alternative is what most tax havens are doing. They are raising taxes on companies ... and handing out subsidies that, somewhat suspiciously, exactly balance the tax raise. This is even done within Europe. This principle can easily be applied to emission regulations. After all, it's always paying to be allowed to pollute. Governments can simply pay that back some other way.
Those events aren't independent, they are strongly connected. Coal and nuclear have provided baseload power, with gas and renewables filling in the peaks in the demand curve (e.g. solar for the day-peak). Ending coal and nuclear has ended baseload power, so not only do you have to fill the demand curve, you also have a far more variable supply curve. The only elements in that supply curve you can control are pumped-hydro storage and gas plants. Pumped-hydro is available but rare in Germany due to topography and the green movement. Which left gas plants, strongly increasing the reliance on gas imports.
Edit: And Germany is still dependent on the goodwill and market prices of gas suppliers. It is just that the cheaper and easy-to-transport Russian pipelined gas has been replaced by overseas ship-supplied gas.
Many EU countries depended and still depend on Russian gas, including hardcore Russia hawks. It’s cheap and easily transportable. This beats morality every time, as can be seen from the past support of various dictatorships, autocracies and the various coups enacted to secure energy for the US and Western Europe.
With an important chunk of deliveries coming from Quatar, Azerbaijan, etc new suppliers are hardly better, but on the positive side at least aren’t invading anyone at the moment.
Supporting the sections meant cutting off a limb with heavy blood loss. It's absurd to be confused why Germany hasn't managed to regain composure yet. We barely cauterized the wound.
It was incompatible with the safety of Europe first of all. Both economic and military. Yes, we had a cheap ride, but it's over. In 2014 you could still pretend but in 2023 nobody wants to have blood on their hands.
American gas has the blood of millions of innocents on its hands too, you know ..
Also don’t mix morals and geopolitics, they’re often incompatible.
Our safety in Europe is at risk because of our stupid wars destabilizing the Middle East and because we’re stuck between great power rivalries, most recently as vassals in training of the US, which wants to drag us in its conflict with China.
See https://ecfr.eu/publication/the-art-of-vassalisation-how-rus...
Luckily the Ukrainians are willing and able fight Russia for us, with reluctant support from their allies. An utterly embarrassing situation for most European countries.
* the refugee crisis in Europe peaking in 2015 and still continuing today, which led to a reaction from local EU populations and a political reorientation towards the far-right.
* radicalization (including the rise of ISIS/ISIL) which in turn led to terrorist attacks and an increased interest in mass surveillance within the EU.
If that happens to be a Kremlin talking point, then those Kremlin guys and girls are correct.
As for the Ukrainians fighting Russia “for us”, that’s definitely an EU/Washington/Kiev talking point and it’s objectively wrong: they’re fighting for their own country.
Our military support and tens of billions of EUR of financial support are keeping Ukraine in the fight much longer than they would have managed by themselves. The EU rep for foreign affairs and security policy pointed out that Ukraine would fall within days without our “embarrassing” support.
But if you feel we’re not doing enough, there’s always the foreign legion…
You are mixing things up. Western Europe didn't lead any of these wars. The UK joined the USA in Iraq and Afghanistan. It was a stupid decision but it had nothing to do with the rest of Europe. Unless you claim UK=EU.
The Kremlin propaganda is repeating these statements very often so I can understand some people started believing these lies.
And Bush haven't managed to build a great coalition for his stupid war. His famous "you forgot Poland" will be laughed at for many years. These two wars were stupid before they ever begun, and Europeans knew about this from the very beginning and they did what they could to stop them.
An yet, Kremlin loves to say Russians are just doing the same things as European did. We are not the same.
I agree we’re not the same as the Kremlin and I like to use a metaphor of Western vs Eastern EU corruption to illustrate the difference: in EE, doctors and police may politely ask your for bribes. In WE there’s lobbying, “consultants” and cushy nepotism. It’s the sophistication which makes the difference, you see…
While Russia stupidly invades another country in blatant violation of international law, the US and EU invade to protect democracy and freedom, try at least to get the UN to rubber-stamp it and later make an effort at a botched up reconstruction, transforming the invaded countries in a living hell where children are sold for food (e.g. Afghanistan).
No, the EU does not invade for any reason. People in the EU want to live in peace. The USA managed to convince Blair to ally with them to invade Iraq but that's it. Both Blair and Bush should be held responsible for their crimes.
Europe seems to prefer US hegemony over Russian bullying. See how Finland and Sweden wanted to get into NATO without anyone forcing them to do so.
Unfortunately, we are humans and the only thing that organizes us beyond a certain scale (100-150 people) is force. Either you are strong enough yourself, or you need some strong backers.
[1] - https://archive.is/h4ncN
At least, that's what the cynic in me thinks.
Schröder's infamous Agenda 2010[1] that sought to crush unions power, workers rights and welfare programs, in order to force more Germans off welfare and taking poverty wages to pump up the economy. It pumped up the economy indeed but it didn't have the promised effect of increasing wages of living standards, quite the opposite, the rich got richer and the poor were poorer.
When they ran out of poor Germans to exploit, they turned to Eastern EU workers form Poland and Romania. As those markets are drying up of cheap exploitable labor as well, they invited workers from Africa and the Middle east to make dangerous journeys to come to Germany, hence Merkel's Germany's famous open borders "Willkommenskultur", despite backlash from other Schengen and EU members who's borders and asylum centers got overwhelmed.
The unpopular opinion that nobody is allowed to discuss is the country is unsustainably addicted to cheap immigrant labor for its exports to be competitive and to prop its over-inflated housing market. It's burning the economic candle at both ends to pump up the GDP.
Why are you assuming a victim stance and wrongly so?
Remember the Wickard scandal when the Financial Times uncovered their dirt and instead of the authorities looking at Wirecard they turned at the Financial Times as if they were trying to Financially destabilize Wirecard?
The same thing repeats itself on every issue in Germany, like this topic. Just look at the top comment: "Something negative about Germany in the WSJ? It can't be true, it must be WSJ trying to destabilize Germany". Everyone keeps doubting that Germany is ever doing something wrong and assumes by default that all negative news must be incorect or have an agenda.
So which one is it? According to you Agenda 2010 helped Germany to run out of poor Germans. And you are right -- from the introduction of Hartz IV, German unemployment permanently fell by over 6% -- despite the mass immigration that you are complaining about.
The rich getting richer in the zero-interest-rate decade is a global phenomenon - unemployment declining by these truly immense amounts very much isn't.
Back in the 1990s and early 2000s productivity wise Western Europe and the US were almost on the same level. Look at the gap now..
> universal health care and strong worker's rights
And generally low wages and high living costs. e.g. real estate is about 2x cheaper in the bay area or SF compared to Paris for instance adjusted by median income, while London, Munich, Rome and some other major cities are only 40-60% more expensive.
Even with an outlandish welfare state the German Economy kept steady throughout the last decade or two.
But what really breaks the German economy‘s back is energy costs.
Germany’s capability to fund a massive welfare state stems from its large industrial base, which is very sensitive to energy costs.
It’s those blue collar jobs the are getting completely f-cked by the policies elected largely by white-collar workers.
Of course, I find USA's situation a bit more unstable because remote work is getting more common. How much is the premium for having people in the same physical location anyway?
Why is that unstable?
Some of the misgivings of living in US is balanced by the high wages (example: living in San Fransisco vs San Fransisco wages); effectively firms are subsidizing US education costs and healthcare costs via wages (instead of taxes). With remote work being more common, people can start living in lower cost, more tax-subsidized areas while also being qualified for the high wage jobs. After a while, San Fransisco firms might notice that they do not have to subsidize San Fransisco landlords in order to get good developers. They can instead give a little less wages to equally good developers who live in less costly areas. If the wages are depressed enough, living in US might not make sense at all; after all you need to pay for your children's school, have someone drive them everywhere until they are 16, and account for unexpected healthcare costs which are already accounted for in Europe.
> account for unexpected healthcare costs which are already accounted for in Europe.
If you’re a software engineering you’re likely to already have good enough insurance and can save at least 20-50k for any unexpected costs anyway.
In theory yes, in practice it doesn't look like it's happening. I haven't seen a massive boom of US companies opening up shop in my EU neighborhood.
Those who wanted to hire EU workers have been doing it already. Plus, why would San-Fran companies move to Europe when haven't even exhausted all lower cost areas in the US yet?
Operating in Europe and hiring here opens up a lot of headaches and liabilities, other than culture and time zone differences, that many US businesses don't like (sick leave, parental leave, taxes, labor laws, more taxes, etc). It's not as easy to hire here remotely as you think.
You need to have an legal entity in each EU country if you want to hire in every country, or, the usual M.O., you open a shop in Dublin, Berlin or Amsterdam and hope people from other countries can stomach the housing market and accept to move there, but unlike the US, you can't remotely employee people in an EU country while they live in other EU countries as labor laws, tax and social systems don't easily allow cross-border remote work as every country expects you live and work locally or use the cross border commuter policies but for that you need to live near the border anyway.
You can still account for all of those thing.
As far as schools are concerned it’s highly variable in the US. There are certainly some very good public schools just living expenses are also likely to be much higher in those areas.
> It's just about which tradeoffs you are willing to make.
So a country with highly accessible social services must also have a stagnant economy and unaffordable housing? I don’t really see the link..
Anyway, there’s lots of funding programs, which on paper is a great offset for the lack of risk and venture spirit. But the programs are all Byzantine in their requirements, long applications, small print in their rules which exclude you etc. For one application of a R/D program for small companies, which is done in a smart acrobat pdf (wow), on the cover page, it asks for the company stamp.
What is a company stamp? I’m not quite sure, it doesn’t seem to be a legally required thing. It’s just a ink stamp with the company name and some basic info, that you can stamp paper documents with to make them appear more official.
So I spent another 25€ to get a company stamp and ink pillow for my startup. Another startup expense, and strangely representative of the entrepreneurial experience in Germany overall.
Not if you're in the German "company stamp business". :)
To put this in perspective: You can also start a company in Germany for 30 Euro and 15 minutes of time.
That's a so called "Kleingewerbe" where you can make up to 22.000 Euro/year turnaround with _much_ easier regulations on pretty much everything.
If you want to test something or have some side hustle going on, that's the way to go.
Don't be scared by all the reports like the above.
Why would you go through the (reduced) hassle to start a business on the conditions of making less than minimum wage?
That seems backwards to me, compared to other EU member states. This "German way" seems more like it's more discouraging to start a small business, rather than encouraging it, and more convincing to just stay employed instead rather than bothering to start a small business.
It matches my perception that people in Berlin will come together to start some brick and mortar business without big growth potential and call it a "startup". Yes they did "start up" a company, but if you choose the English rather than German word that people associate with silicon-valley style tech startup to describe your venture, I think you should have a business model that aims for growth, not just a be a collection of young people to start a company. I guess it shows that in risk-averse Germany, traditionally young people become employed rather than start their own companies. So even if it's not a startup in the VC sense, the young entrepreneurs still call it that because it is risky and modern from their point of view.
So called "Mittelstand" is what the German economy is build on. These are stable companies, often lead by families in the nth generation, concentrating on making good products. Most of these companies are the result of somebody (or some friends) being good at something, starting in his shed and scaling that operation up over time.
Aiming for that unicorn/public funding/VC money is just plain stupid. At least it's rich people money that's usually getting burned there.
You’re using the wrong tense here. Germany used to be a bit more innovative, the „Mittelstand“ is a leftover of that.
Innovation and impact require risk.
...on inherited wealth from WW2 salve labor and war profiteering[1].
When you outgrow the 22k though (that limit is called "Kleingewerbe"), you'll have to do advance VAT returns and stuff like that. That's what I meant with much easier regulations when you start/stay small.
Don't get me started on making certain legal statements in a kind of commerce registry. It almost feels royal with handwritten stuff and a person helpfully dictating the correct legal incantation that properly changes the social capital. At least the workers were indeed helpful.
To top it off we got Portuguese legalese letters from the tax authority that were unreadable to the founders. They were so convoluted, we thought we owed something but in fact we were being asked to withhold payment to another company which owed tax money. It was so convoluted I asked a lawyer.
Regarding applying for money. We did apply for money and got granted but the money turned out to exclude wages or the founders so we rushed to have profitability otherwise we could just not support ourselves. We still did money but it was a miserable life and we earned far better being employed. This is the same in Poland, with some fellow aeronautics colleagues. That is the "VC" system in Europe. No trust, no understanding: everything stays the same except for the ones who know the system.
A fellow startup-er made a demo to a bigger company proving the concept, the bigger company took the demo, and showed to another bigger company because the money they could ask for would be bigger. Of course the bigger partner had no experience and the project came up empty.
Lastly, I tried to do business as a consultant to Portugal, while being a resident in Poland. Due to me being a citizen I needed to pay VAT even though I would not need to because I am not a tax resident there and would be double taxed. I canceled the contract as again I earn more employed and cannot be bothered.
Finally, as it is not only a problem of VC, me and my business partner were engineers and we definitely were out of depth on running a company to the full potential. Looking back I would have liked to have paid for a professional manager that would understand doing business better.
Yeah but I don’t see how could I disagree with this article too much.
> whose bias in owned outlets is also renowned
I’m not sure. High degree of bias seems to be the standard (with a few exceptions) regardless of ownership.
They shot themselves in the foot in knee-jerk reaction to what happened in Fukushima. Nuclear is clean energy. All the scare mongering is done by hippies who think that somehow wind turbines and solar panels are made out of thin air and don't pollute.
Nuclear was already long doomed by the time Fukushima happened
We, as in the world, have enough experience with nuclear reactors to build safe ones.
Nobody thinks that.
The problem with energy is rarely the source (we can derive energy out of most anything that moves, heats, or shines), but the storage. Coal, natural gas, and nuclear are gigawatt-scale producers of energy because we can ramp up production at any time by simply shoveling more of our stockpile of fuel into the proverbial furnace. We can predict when solar or wind will give us power, but this is cold comfort if we need it now and it’s not windy or dark.
This is why I’m bullish with hydrogen because it offers a way to store energy chemically that does not wear out like a battery and operates at 40-60% efficiency vs sub-25% for combination-driven power generation.
There is no football match that an English football fan will more willingly talk about than Germany's 5-1 home defeat against England during the 2002 World Cup qualifiers!
If nothing changes and the job market stays as bad as it is, I'll seriously consider moving to a different country.
The decision to phase out of nuclear was good, as import of nuclear fuel has similar problems as the import of fossil gas. Additionally, there is the nuclear waste problem and the risk of a major reactor catastrophe which would make Germany uninhabitable. It is debatable whether this should have been done after coal phase out, but this decision has been made by CDU in 2013 and is currently not reversible anymore. There is no fuel, no functioning reactors and no companies willing to operate any reactor and no insurance willing to insure them.
This is not correct and the SDP and the Green Party passed a law to phase out nuclear power in Germany in 2000. It wasn't started by the CDU in 2013.
After the Berlin wall fell, Russia dismantled its spook apparatus. The Americans kept theirs intact.
Now that the real business of journalism is smaller than ever. The spooks have an even higher weight than they used to.
So what is WSJ pushing?
In short the Washington line: Don't invest in Germany. They are too reliant on China and Russia. Ultimately they will have to do what we have done - implement protectionist subsidies like the IRA, expand military spending, and run massive fiscal deficits.