A Commerzbank report says Germany will face a deep economic crisis similar to that of 2009 if Russia completely cuts off natural gas supplies. The experts at Germany’s fourth-largest bank balance sheet forecast a dramatic economic contraction of 2.7% in 2022 and 1.1% in 2023 under this pessimistic scenario.
Indicative that for the fifth month in a row, according to the Federal Statistical Service, orders for industrial products from countries outside the eurozone have decreased significantly.
Jörg Kremer, chief economist at Commerzbank, sees the “German economy in a war of nerves between gas costs and high inflation”. Speaking to the German news program n-tv, he emphasizes that the risk of a recession is now visible: “In the euro zone inflation is already at 8.9% and in Germany it will increase by at least 1% in September when after one quarter the subsidy will be abolished unlimited ticket of 9 euros and in view of the extraordinary natural gas levy”.
A China-Taiwan conflict would have an impact on the German economy
And as if that weren’t enough, the possibility of a military conflict between China and Taiwan worries German economists, who know very well that the German economy as an export power needs the huge Chinese market on the one hand and semiconductors and high-end products on the other. technology imported from Taiwan.
Max Chenglein, head of the Mercator Institute for Chinese Studies (MERICS), told the German news agency dpa that “an armed conflict is the biggest risk to the close economic relations between China and Germany, which have been built for decades. A possible escalation would have chain reactions with significant negative economic effects”, states the German expert.
Russia’s invasion of Ukraine, Europe’s dependence on Russian energy imports and problems in supply chains due to Beijing’s insistence on a policy of zero cases have made Germany realize how dependent it is not only on Russia, but also on China. In the event that due to an attack on Taiwan sanctions are imposed on China, as is currently the case with Russia, both the German and the global economy will receive a severe blow.
Stefanos Georgakopoulos (n-tv, dpa)
Source: Deutsche Welle