This is not something you would expect to hear about the industrial powerhouse which was once the envy of Europe.
But a recent special dispatch from West Berlin by Malcolm Brabant on PBS News, the US radio station, reported that there are now 2m Germans dependent on food banks.
Another 14m – that is roughly one in six of the 88m population – are classified as living in poverty in a country that for decades has been considered to be one of the richest and the most industrious in the world.
Like the rest of Europe, Germany has been hit by the extraordinary challenges of the past few years, which have included the pandemic lockdown, crippling supply chain problems, soaring inflation and Russia’s war on Ukraine.
Yet Germany has suffered more than its neighbours because of its long-term and heavy dependence on Russian natural gas and the need to switch its huge industrial base almost overnight to alternative energy sources.
Simultaneously, its big manufacturing sector has been hurt more than most by rocketing prices for raw materials such as metals, glass and fertilisers.
Ironically, Germany has been hit more than most precisely because its manufacturing base is so big – just under a fifth of GDP. To put that into context, that’s twice that of the UK.
Therefore, as one of the world’s top exporters, along with the US and China, growth has slowed more sharply because of the fall in global trade since 2008, which was then exacerbated by lockdown.
Indeed, what is often missed looking at Germany is that industrial production has actually been in free fall for some time.
Over the past ten years, it rose by just 2.4 per cent. The UK did better than that.
The prognosis for future growth doesn’t look much brighter either. Figures out yesterday show that German industrial output plunged in June, a fall of 1.5 per cent and the second month in a row that output has fallen. (France and Spain also saw output fall).
Trading was ghastly in the important car industry, with output down by 3.5 per cent.
The downturn is part of a trend not seen since the Dieselgate saga a decade ago, which hammered some of the country’s biggest car makers, undermining confidence in the sector.
Germany’s economics ministry didn’t even try to sugarcoat the numbers. Quite the reverse, pointing out that the outlook for industry remains gloomy despite some uptick in demand. Or as a Federal spokesman put it: ‘There is currently no sign of a noticeable recovery.’
Ouch. Which is why the latest numbers have raised concerns that growth will stagnate over the next few months, tipping the country back into recession. Even the Bundesbank forecasts the economy will contract by 0.3 per cent this year.
Germany’s Sentix poll of German investors reports that investor morale across the eurozone has picked up a little in August after a three month slump.
But not in Germany. Unless business picks up, it is heading to be the ‘sick man of the eurozone’, the report adds. Sound familiar?
It is tempting for the British to indulge in a little schadenfreude when looking across the Channel to see how our old rival has replaced us as the country with the most economic problems. We shouldn’t.
What goes around, comes around. But lessons can be learnt from its problems, certainly from its astonishingly foolish dependence for energy on such a volatile source.
Ouch, we may need some more barges to accommodate poor Germans.
