The bloom is off Europe’s former economic powerhouse Germany.
Last month, the German Retail Association (HDE) reported that consumer sentiment reached an all-time low in August — then declined further in September.
It’s because of increasingly unaffordable energy, food and other essentials while disposable household income is declining.
As a result, consumer purchasing intentions also plunged to an all-time low.
Looking ahead, there’s nothing positive in prospect, gloom and doom alone at least through winter — most likely much longer.
In late September, Spiegel International reported the following:
“Germany is expecting tough years ahead with diminishing prosperity, a shrinking middle class and growing inequality.”
“This is uncharted territory for the government and society, and both are facing some difficult choices.”
When middle class Germans are increasingly hard-pressed to make ends meet, “things start getting dicey everywhere in the country, particularly for the” ruling regime.
A combination of soaring inflation, unavailability of vital gas from sabotaged Russian pipelines, public anger over growing deprivation and self-inflicted harm by allying with hegemon USA’s sanctions and hot war on the Russian Federation, Germany faces a perfect storm with no resolution in prospect.
And this Spiegel reality check:
Q II real wages fell by 4.4% year-over-year while prices of energy, food and other essentials rose sharply.
Likely already in recession, there’s “growing evidence that it could become particularly severe – with a tenfold increase in the exchange electricity price, numerous corporate bankruptcies and a permanently damaged economy.”
According to economist Michael Fratzscher, Germany is in decline.
Lost prosperity will likely be permanent.
After nearly two decades of economic growth, scant unemployment and rising household incomes, “a tough decade is looming” ahead, he believes.
Former German finance minister, its current chancellor, Olaf Scholz, presented no viable plan for turning things around, just tinkering around the edges.
Instead of using Germany’s financial resources to aid struggling enterprises and households, the nation’s war minister, Christine Lambrecht, vowed on Saturday to supply Ukrainian Nazis with more arms, equipment and related military aid.
Weeks earlier, Scholz vowed to provide its regime with Germany’s “most modern and efficient equipment” soon — in support of hegemon USA’s forever war on Russia.
It’s at a time when vital homeland needs are going begging.
Like Europe overall, Germany is increasingly becoming a thirdworldized economic backwater.
While campaigning to become German chancellor, Scholz vowed to deliver greater societal fairness.
Instead, public misery increased since he took office last December.
According to economist, Timo Wollmershäuser, we’re in unchartered territory at a time when hard times getting harder are driving large segments of German society into poverty.
What’s going on isn’t a conventional economic downturn.
“The future viability of the German economic and social model is at stake.”
The same reality applies to Europe across the board.
Can industrial Germany survive without reliable, affordable Russian energy?
Instead of being Europe’s economic powerhouse, it’s now a laggard.
It’s at a time when according to the German Institute for Economic Research:
The wealthiest segment of German society, its top 10%, owns over two-thirds of the nation’s assets.
In stark contrast, the bottom half of the population is struggling with a meager 1.3% — at a time of a declining middle class.
According to Sociology Professor, Heinz Bude:
“(D)ecline in purchasing power will become the major issue for populists in Europe.”
Last Friday, Spiegel reported that thousands of German stores face bankruptcy, citing an assessment by the German Retail Association.
According to economy minister, Robert Habeck, “exploding energy costs (created) existentially threatening” conditions for around 16,000 German enterprises.
With energy costs nearly 150% higher since end of 2021, they’re losing money instead of earning enough to remain solvent.
With millions of hard-pressed German households struggling to afford the high cost of energy and other essentials, does a winter of discontent loom in Germany and across Europe?