The government of Germany plans to set new taxes on every form of energy consumption instead of loosening on economic regulations, while the country is facing serious economic stagnation and sometimes even decline.
German economy is clearly is trouble, as this was the third quarter in a row, when the economic reports showed stagnation. This, according to most economist can already be called recession. While government predicts 0.7% growth for 2019, these forecasts seem rather ambitious, than realistic.
Experts believe, that the large waves of people losing jobs lately are result of the policies of the government regarding climate change. Car manufacturers are facing strict emission restriction policies, forcing them to aggressively shift toward electric cars, which despite the government subsidies, have not yet proven profitable.
The current recession is clearly a result of the policies towards car manufacturers, that effect the entire economy of the country.
The crisis spirals to all segments of the economy slowly taking its tow on the social fabric and consumer behavior.
The hardships of the car industry start with war declared against diesel motors and end with forcing electromobility.
Car manufacturers reported in June of 2019 a decline of 24.4% in production year-on-year. This decline was 12.5% in the first half of the year, while fall back was some 9.45% already in 2018.
Consumers, fearing recession, are undecisive, which leads to steady decline in consumption of 4.7% in June compared to May.
Send offs therefore are on the rise. Ford plans to lay off some 12 thousand of its workers this year and it seems, that complete shutdown of their European production may be a reality. Other German car-giant Volkswagen has agreed already with almighty work union IG Metal, to lay off some 30 thousand of its workers by the end of 2020.
It is interesting to note, that Volkswagen plans to use the money they would save on wages to development of electric cars, as a direct result of government pressure. Volkswagen is particularly sensitive to these pressures, as third of the company is owned by the government, so they have a direct say in management of the car manufacturer.
As Audi’s profits were down close to 25% in 2018, the company is currently in negotiations to let go 15% of its workers. However BMW, claiming that they planned wisely earlier only declared “stop to admission”.
The largest BMW factory is not in Munich or in Dingolfing, but in South-Carolina of the United States.
Since car manufacturers drop production, the steel industry suffers massively and forced to lay off some of its workers. The Thyssenkrupp plans to let go some 6 thousand workers, while work shifts are being shortened in their Bremen and Eisenhüttenstadt plants. Total lay-offs in the Bayern region alone reach 55 thousand as a result of the fall back of the car industry.
Other sectors are laying off as well. Siemens cuts 10 thousand workers as a result of the complete shutdown of its reactor business line, 2.8 thousand were let go already.
Due to 30% decrease in their profit, BASF sent away 7 thousand of its workers in Leverkusen. The decrease was mainly attributed to the hysteria caused by the greens against an herbicide called glyphosate.
Downturn in manufacturing naturally effects the retail industry as well. Famous Cologne based bakery-chain Oebel went bankrupt, the same happened to fashion giant Strenesse and WMF, a traditional German kitchen supplies producer plans to close its German factory.
The victims of the suffering of industry giants goes on and on, but the bank sector has also seen brighter days already. The hardships are amplified by zero-interest-rate policy of the Central European Bank.
Largest German financial institution, Deutsche Bank has just released its press statement about laying off 20 thousand workers. These measures showed immediate effect, as these workers were not allowed in their offices the next day of the announcement.
It is hard to imagine what will happen in East-Germany, as green activists successfully lobbied for closing all brown-coal based power plants by the end of 2030.
Complete industry cultures are about to go into history books in the provinces of Saxony and Saxony-Anhalt, as a result of the anti-coal policies. This means serious existential threat to these provinces.
The results are slowly hitting the country’s social fabric as well. If jobs disappear in the car manufacturing and chemical industries, where average hourly wages are as high as 50-60 Euros and these workers seek jobs in the service sector, their contribution to social security will decrease significantly.
If unemployment is on the rise, insurance companies will take a major blow in times when they are needed the most. Their spending already exceeds their revenues, as only 15% of some 2 million new immigrants have jobs. This also puts tremendous weight on the working class in general.
One would expect governmental interference of sorts in these situations that easy the burden of employers and boost productivity, instead the reverse seems to be the case.
Politics is only busy with carbon-dioxide emission policies lately, as new taxes are being put out on oil, gas and other sources of energy, which clearly are penalties.
Those that travel with cars to work or take an airplane or heat their homes or just simply want to take a hot bath or use energy for any other means are now being penalized. The new tax will mean thousands of Euros extra in a year to each family. The segment that is hit most hardly are the lower and middle classes, those who live in family units, go to work with cars and do not have the money to change to newer vehicles.
How the government will deal with companies of mass energy consumption we are yet to see, but it is clear that
such policies will lead to catastrophe: increase the burden on companies, discourage consumption and so on, while most of the revenue will surely be spent on the burocracy that will enforce these harsh laws.
Let’s just take a look, what will they achieve anyway. Air is made of 0.038% carbondioxide. 96% of it being produced by nature, 4% by human endeavor. Germany is responsible for 3.1% of global carbondioxide emission which in total is 0.00004712 % globally.
This does not seem to be worth ruining the lives of 82 million people.
Members of the Friday for Future group, a radical green activist organization, have already announced their new steps to hammer down the country’s industrial base. If there will be even anything left to destroy.