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Gulf Insider
a day ago
- Business
- Gulf Insider
Germany's Industrial Core Is Collapsing Under The US Trade Deal And The Green Agenda
The asymmetrical trade agreement between the EU and the US will further worsen Germany's recession. Yet neither politicians nor corporate leaders show any willingness to make the sweeping policy changes needed to reverse course. Germany's economic data leaves no room for illusions. After contracting by 0.9% in 2023 and another 0.5% last year, the decline will continue this year. The Machine Room Has Been Blown Apart It is precisely the sectors that have sustained German prosperity for decades—automobiles, construction, machinery—that are under the heaviest pressure. Without the artificial boost from state spending—now accounting for half of GDP—the private sector is set to shrink by 4–5% this year. Since 2018, total productivity has been in steady decline. This is also a social problem: Germany is importing hundreds of thousands of welfare migrants into its social systems, yet the economy would have to boom just to keep per capita prosperity from falling. A new survey by the German Chamber of Commerce and Industry (DIHK) confirms what was already obvious: the EU–US trade deal will especially hurt Germany's export-oriented economy. According to the survey, 58% of companies expect additional burdens, rising to 74% for firms with direct US business. Only 5% expect any benefit. 'This deal may have been politically necessary, but for many German companies it's a bitter pill,' said DIHK CEO Helena Melnikov. 'Higher tariffs, more bureaucracy, falling competitiveness'—that's the price of the diplomatic truce between Washington and Brussels. As of Thursday, a general 15% tariff applies to exports to the US, hitting automotive and machinery manufacturers hardest. 89% of US-oriented firms report immediate disadvantages, 72% fear further tariff hikes, 80% worry about political arbitrariness in transatlantic trade, and more than half plan to scale back US operations. Business Was Already Weak In its May survey of over 21,000 companies, only 23% reported positive business expectations—down five points—while 30% expected deterioration. In industry, one in three anticipates fewer orders. Just 19% plan to increase investment, while about a third plan to cut back. High energy prices, labor shortages, and political uncertainty are seen as the main drags. The DIHK forecasts a 0.3% recession for 2025, but adjusting for state spending, the real decline is closer to 4–5%. Daily surveys confirm the same message: Germany is being deindustrialized, losing hundreds of thousands of core-sector jobs. The social security deficits already emerging are just the beginning. Yet both politics and business refuse to conduct an honest diagnosis. The Green Deal remains sacrosanct. Energy costs for German industry are up to three times higher than for US competitors, double that of French firms—pushing energy-intensive sectors out of the country. Dancing Around the Golden Calf Nobody dares openly challenge Brussels' climate agenda. A rare exception came in June, when a group of works council representatives wrote an open letter to the Chancellor, naming the Green Deal as a root cause of decline. But most CEOs dodge the question. Mercedes-Benz chief Ola Källenius cites 'weak demand, high production costs, and US tariff uncertainty' for falling margins—but ignores the Green Deal's role. VW CEO Oliver Blume calls for lower energy prices and tax incentives for EVs—essentially more subsidies to keep the transition alive. Corporate leadership is now fused ideologically with the Green Deal. The energy transition has battered Germany's industrial base: sectors like construction and automotive have been knocked completely off track. A Split Economy Events like the 'Made for Germany' coffee chat between 61 CEOs and the Chancellor are symbolic of a corporatist mindset. Large corporations can adjust or relocate production to sidestep regulation, but small and medium-sized enterprises—the Mittelstand—are being crushed. The Green Deal's bureaucratic weight ultimately clears the field for big corporations by eliminating smaller competitors. The Mittelstand has no political backing, and many are fighting daily for survival—often ending in bankruptcy. In H1 2025, insolvencies rose 9.4% year-on-year to 11,900 companies. There is still no sign of a policy shift on climate. The German corporate elite has failed to seize the initiative to force political change. Germany is heading for a hot autumn—economically and socially. Source Zero Hedge
Business Recorder
07-05-2025
- Business
- Business Recorder
Rising protectionism could derail trade flows: PBC chief
KARACHI: Ehsan Malik, Chairman of the Pakistan Business Council (PBC), has cautioned against the global rise in protectionism, particularly US tariffs, warning that such moves could derail trade flows. Speaking at the German Chamber of Commerce Abroad (AHK) gathering, hosted by the Consulate General of the Federal Republic of Germany on Tuesday, Malik emphasised that tariffs not only distort resource allocation but also undermine consumer value and sustainable job creation. He also highlighted Pakistan's fragile but improving macroeconomic outlook. He pointed to the country's ongoing IMF program, improved foreign exchange reserves, sharply higher remittances, and the lowest fiscal deficit in 20 years as signs of stabilisation. 'We're seeing early signs of recovery,' he said, adding that Pakistan has also benefited from low global fuel costs and a strong wheat crop, contributing to the lowest inflation in years. However, he warned that much work remains. Political uncertainty, regional unrest, and stalled reforms continue to pose significant risks. He criticized the lack of coordinated economic leadership and called for urgent reforms to unlock foreign direct investment and support business growth. On US tariffs, Malik underlined the importance of the American market, noting its $27.7 trillion GDP and massive consumer base. 'The US cannot be ignored. Tariffs may be a tool, but the objective must be fair and balanced trade,' he said. Malik stressed that Pakistan's tax-to-GDP ratio should not be the sole focus. Instead, fiscal policy must aim to foster investment, support exports, and create jobs. 'Tax collection is the outcome of smart policy—not the starting point,' he remarked. German Consul General Rüdiger Lotz welcomed participants at the event, acknowledging the complex global landscape. 'The geopolitical situation is not easy — we all know the world is facing significant challenges,' he remarked. He noted that the world is changing rapidly, and Europe, including Germany, is actively seeking new paths for energy security, trade, and stability in response to these geopolitical shifts. 'Europe in general and Germany in particular, continue to believe in an open and globalised world economy,' he emphasised, adding that the imposition of tariffs is the wrong response to economic crises. Consul General Lotz also highlighted Germany's ongoing focus on domestic investment, especially in infrastructure, education, schools, and healthcare. He acknowledged that business relations between Germany and Pakistan are improving, and noted that political stability in Pakistan would lead to greater economic stability, further strengthening bilateral ties. The event featured the a panel discussion titled 'US Tariffs – Implications and Opportunities for the Pakistani Economy.' The discussion explored opportunities for Pakistan arising from shifting global trade patterns and tariff realignments, as well as the investment, financing, and logistics challenges tied to sustaining competitive exports amid market volatility. Panelists also addressed evolving policy signals from major trading partners and their implications for Pakistan's economic strategy. The panel included Ehsan Malik (CEO, Pakistan Business Council), Yousaf Bashir (Country Representative, Commerzbank Pakistan), and Fahd Jafri (Country Manager, Hapag-Lloyd Pakistan). Copyright Business Recorder, 2025
Iraqi News
03-03-2025
- Business
- Iraqi News
Abdul-Ghani: Iraq has made a major leap in developing the oil industry
Deputy PM for Energy Affairs and Minister of Oil Hayan Abdul-Ghani confirmed on Monday that Iraq has made great strides in developing the oil industry, especially the optimal investment of gas. Abdul-Ghani received a German delegation that includes representatives of the German Embassy in Baghdad, the German Chamber of Commerce, and companies specialized in various oil and non-oil fields, according to the ministry statement - received by the Iraqi News Agency - INA. "Iraq's keenness to cooperate with various parties, including German companies, which have a long history in the field of industry and are of high quality and acceptable in Iraq," said Abdul-Ghani. He highlighted, "Iraq has made great strides in the field of developing the oil industry and in particular the optimal investment of gas. Iraq has achieved, during the government's term, a major leap in the field of investment in associated gas and raised investment rates from 53% to more than 67%, and Iraq is determined to stop flaring gas and achieve self-sufficiency in 2028." "The ministry has major projects in the gas investment sector, the most important of which is the gas development project in Basra with Total to invest 600 cubic meters in two phases, in addition to other projects in the field of developing gas fields. The ministry signed contracts to develop the Mansouriya and Akkas fields. It also signed development contracts for 14 fields and exploration areas, which were offered in the fifth and sixth supplementary licensing rounds," he added. The Minister of Oil noted that "the ministry has investment opportunities for gas and oil exploration fields and areas from the last licensing round that have not been referred, and the ministry is working to develop them through investment projects with specialized international companies." In turn, German companies presented a review of their activities and offers to work and cooperate with the Ministry of Oil and its formations, in the fields of exploration, pipelines, laboratories, training, and the provision of equipment, tools, and supplies for oil facilities.
