Is Germany’s entire business model is broken? Most economists do not think so, though deep structural change is needed
, explained the German chancellor, but because of the transformation required by the environmental crisis. He promised to turn Germany at high speed into a gleaming, climate-neutral economy. But can he pull all these changes off?
The panic about deindustrialisation has also abated. Energy-intensive production has declined by 13% compared with January 2022 , but overall industrial output held up. That points to a rejigging of supply chains rather than a wholesale process of deindustrialisation.is restructuring its complex production profile to shed low-margin products, for instance. Steel-makers have already done so. “Demand for commodity steel in the German market has decreased significantly in recent decades.
In his speech at the World Economic Forum in Davos in January Mr Scholz also spoke of the “new German speed” in reaching climate goals. A recent law mandates the prioritisation of expanding wind and solar power, as well as electricity and hydrogen networks, he said. Under this new regime, approvals for electricity grids are being granted, on average, two years faster than before. This year the Scholz government has more than doubled the volume of calls for tender for onshore wind farms.
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