Germany has become a rare punching back for the rest of Europe, as crippling production levels, falling exports, and waning consumer confidence put the brakes on the continent’s largest economy.
Now, one of the country’s biggest policymakers is fed up with its sickly image.
The boss of the country’s Central Bank has been forced to go on the defensive as analysts fret over the state of a country that is likely to struggle through recession for the rest of the year, and he has taken issue with a particularly unflattering title.
“There’s always talk about Germany being a ‘sick man,’” Bundesbank President Joachim Nagel told an audience Wednesday, per Bloomberg.
“I’m more worried that Europe is getting sick if we don’t finally start doing our homework.”
Bloomberg reported that Nagel was referring to European bureaucracy and higher taxes across the continent as he sought to deflect from struggles in his own economy.
Europe’s sick man
After shaking its “sick man of Europe” title in the wake of unification in the 1990s thanks to massive industrial growth, Germany is once again being tarred with the unfortunate moniker, and for good reason.
Germany has been paying for its past reliance on cheap Russian oil and gas, which has been virtually wiped out in the wake of tit-for-tat sanctions following Vladimir Putin’s invasion of Ukraine.
Supply chain disruptions have proven slow to untangle, while the country is also digesting the effects of falling demand from its key trading partner, China.
The country’s economy largely stagnated before declining last year, registering negative GDP growth of -0.3% in 2023.
Analysts believe Germany is now expected to enter a technical recession, defined as two consecutive quarters of negative economic growth.
Germany’s Purchasing Managers Index (PMI), which measures the country’s production and services output, has been shrinking for the better part of two years.
“Germany is not getting back on track,” surmised Hamburg Commercial Bank chief economist Dr. Cyrus de la Rubia, following the country’s latest PMI reading.
In September, Deutsche Bank CEO Christian Sewing raised the prospect of Germany once again becoming the sick man of Europe unless it fixed several structural issues, including a lack of skilled workers and outdated rail networks. He also shared Nagel’s frustrations with bureaucracy.
“We will become the sick man of…
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