2024-01-21 06:23:44
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The World Economic Forum in Davos is also meeting this year to discuss crises. Top economists see a great need for action in Germany.
Berlin – The World Economic Forum in Davos, Switzerland has begun. With 2,800 participants expected, more people are expected to travel to Davos than ever before. The expectations were set in advance: the Ukraine war or the war between Israel and Hamas will be in the foreground, but political solutions like these are not expected daily News assessed. It is more regarding establishing trust in order to ensure a “minimum level of cooperation”. Nevertheless, the forum is becoming more political than it has been for a long time, and many eyes are on the participating politicians, even if the names of leading actors such as Vladimir Putin are missing from the guest list.
Last year in Davos, Chancellor Olaf Scholz (SPD) focused primarily on climate neutrality. Germany wants to become climate-neutral by 2045 and at the same time remain a strong industrial country, said Scholz in his speech in 2023, and said: “If you want to invest sustainably and profitably in the future, Germany and Europe are the right place.”
PWC study confirms dwindling trust among foreign CEOs in Germany
A study by management consultancy PWC, for which over 4,700 CEOs from 105 countries were surveyed, does not fit into this picture. Accordingly, a year later, the trust of business people from other countries in Germany as a business location is dwindling. Only 15 percent of CEOs of foreign companies assume that Germany is important for their own company growth in the next twelve months, compared to 18 percent last year.
Chancellor Olaf Scholz (SPD) should show more leadership. (here at the opening of the DB maintenance facility for ICE 4 trains) © Patrick Pleul
It was only announced on Monday (January 15th) that economic growth in Germany had fallen by 0.3 percent. This means that Germany is in recession.
Top economist from Austria: “Cannot see any leadership strength in Olaf Scholz”
And that’s where the eyes of the economy turn to politics. In an interview with the Business Week Austria’s top economist Gabriel Felbermayr said that Germany was not the “sick man of Europe”, but was already suffering from a “cold”. And that might have an impact, he says as director of the Austrian Institute for Economic Research (WIFO): At 30 percent, Germany has the highest share of value creation in the euro zone. “If more and more support measures expire or are canceled in Germany due to austerity constraints, this will drive up the prices for certain products,” he says, which will result in rising inflation.
Such impulses from Germany might in turn lead to the whole of Europe having to forego the urgently desired interest rate cuts. However, he currently sees no “miracle cure” for the problem in German politics. And he directly accuses Scholz of not showing any “leadership”.
“With respect, I can’t see any leadership in Olaf Scholz that would be necessary in a crisis like this,” says Felbermayr. “The coalition is now muddling through, but please, that is not the boost that Germany needs in the long term. The trend growth will decline over the next 10 to 15 years,” says Felbmayr, and almost goes to the point of calling for a change of government for Germany from Austrian countries abroad. “Recipes are now needed that will also convince investors so that they risk their money in Germany.” He doesn’t see any of that.
Scholz is not traveling to the World Economic Forum in Davos, but Baerbock, Habeck and Lindner are
Now Scholz has set himself the goal for 2024 – perhaps once once more – of showing more leadership, as he promised at the SPD party conference in December. And the pressure on him is growing: international analysts are also warning that he must take on a leadership role. He will not prove it in Davos: Instead of Scholz, Federal Foreign Minister Annalena Baerbock (Greens), Federal Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP), among others, are coming this year.
Meanwhile, there will be completely different issues at the World Economic Forum, which may not all need to be solved with German leadership: Switzerland wants to host a peace conference for Ukraine, which President Volodymyr Zelenskyj supports, as it became known following a preliminary meeting on Monday. In large parts, the economic forum is becoming a crisis policy forum that has to wrestle with growing inequality in some parts of the world, disrupted supply chains, the increasing emergence of artificial intelligence and falling apart alliances.
However, the German economy can still counteract the poor assessments: In the PWC study, 67 percent of German CEOs believe that economic growth will pick up once more, and Germany remains – despite all the declining levels of approval – the third most important growth market following the USA and China World. (cat)
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