Spain ascends as Germany's economic powerhouse falters
Germany is grappling with economic stagnation, while Spain is emerging as the new economic leader in the European Union. Spain is effectively handling the energy crisis and efficiently utilising EU funds.
Germany, beset by stagnation, cannot count on a swift recovery. As Andrzej Kubisiak from the Polish Economic Institute noted in a conversation with Onet, Germany's problems have deep structural roots. The automotive sector has been particularly affected.
The German economy is experiencing a severe crisis, which is reflected in Polish exports. Poland, strongly integrated with the German supply chain, is experiencing declines in the automotive, chemical, and machinery sectors. The drop in the value of Polish exports by 7.7% from January to September 2024 is largely attributed to economic stagnation in Germany.
Spain leading economic growth
Spain, unlike Germany, is effectively emerging from the pandemic crisis.
Spain has managed quite well in emerging from the pandemic crisis, with an influx of migrants, job creation, and funds swiftly arriving from the Recovery and Resilience Facility, along with new foreign investments, believes Kubisiak.
Three key sectors of the German economy — automotive, chemical, and machinery — are experiencing historical declines. Since investments in the German industry started decreasing, relations with China, previously the main export market, have transformed into a rivalry. The situation in the chemical sector, with rising energy costs and Chinese competition, is particularly dramatic.
Economists point out that stagnation in Germany could impact the entire EU. The reduced competitiveness of the European industry, particularly automotive, as well as declining production and job market difficulties, highlight the need for investments in new sectors, such as artificial intelligence or renewable energy, to facilitate recovery from the crisis.