According to Bloomberg, investors lending money to German companies are now demanding higher interest rates than companies in the rest of the Euro-zone.
This is due to several factors, including the struggling economy, real estate troubles, inflation and Germany’s reputation for having the highest corporate distress ranking in Europe.
This predicament came about due to surging energy prices, which began after Germany joined the West’s anti-Russian sanctions. Consequently, the country had to cut off its supply of cheap gas to its energy-dependent manufacturing sector.
Germany is really in trouble. All the big manufacturing economies are slowing, but in Germany, this is compounded by higher energy costs. There are also challenges in the auto sector with competition coming from China,” a fund manager at Barings, Brian Mangwiro
There has been a marked decline in borrowing by businesses to invest in factories, machinery, and technology.
This shows that Germany’s economic growth is impeded in the long term, since companies are currently more focused on tackling their problems. The bigwigs at the World Economic Forum (WEF) in Davos last January were feeling quite despondent.
It was evident that Europe’s largest economy was experiencing instability and grappling with fierce competition from other market players in the fields of machine and car production, particularly in the domain of electric vehicles (EV’s).
The problem is further compounded by interest rate hikes over the last two years, revealing setbacks in the German property market.
In January, more than $13.6 billion in loans and bonds doled out by companies in the country were distressed, which is13 times Italy’s level, according to data gathered by Bloomberg.
A report by Alvarez & Marsal, a consulting company, says that roughly 15% of firms in the recession-hit nation are in trouble.
Additionally, Germany is facing a budget crisis. Despite Chancellor Olaf Scholz’s coalition government managing to overcome the difficult challenge of passing this year’s budget, there’s still a €20 billion gaping hole in the budget expected in 2025, sources familiar with the budget calculations disclosed.
Germany’s budget problems have caused a decline in approval ratings for Scholz’s SPD, Habeck’s Greens, and Lindner’s FDP. The AfD now polls at 19% and shows no signs of losing ground, just trailing behind the Christian Democrats (CDU) with 32%.
Sputnik / ABC Flash Point News 2024.
Shot themselves in the foot by obeying the USA to their own detriment showing they think more of US citizens than their own German citizens –the words for that are –Traitors and servants of the USA whose interests they are serving.
Now the real estate market will plunge leaving the leading EU country in vain?
Yes DM I read that news as well as the projected -0.4 GDP due to rejecting Russian natural gas for USA fracked-dirty-radiated LPG at a much higher price causing many big name industrialists to move their factories abroad also rejecting nuclear energy to rely on wind which cannot supply anywhere near enough energy for German industrial needs.
The German government is “owned ” by the USA.