GERMANY (AP) – Germany needs a new business model. The old one, fueled by cheap natural gas from Russia and lucrative exports to China, is broken, leaving Europe’s biggest economy mired in stagnation and angst about the future.
Delivering that fresh growth strategy is going to be the biggest challenge for the government that takes office after a national election set for February 23, seven months ahead of schedule. The nation that became known for the quality of its products has not seen real economic growth for five years.
Multiple factors conspired to take Germany from industrial powerhouse to post-pandemic straggler: too much bureaucracy, a shortage of skilled workers, slow deployment of technology and a lack of clear direction from the outgoing coalition government are among them. Rising competition from China and high energy prices were additional hits.
“We really need a more company- and enterprise-friendly politics,” said CEO of industrial fan manufacturer EBM-Papst Klaus Geissdoerfer. “We have bright talent in Germany. We have good companies, but at the moment we don’t have the awareness on the political level.”
BUSINESS CRITICISM GETS LOUDER AS ELECTION NEARS
With EUR2.5 billion in annual revenue and plants on three continents, EBM-Papst describes itself as the global leader in its field. The company reported last year that it was “suffering in Germany in particular” and experienced a 4.1 per cent revenue decline in its home market.
Geissdoerfer said EBM-Papst’s heating technology division lost 18.7 per cent of its sales through a clumsily handled push to get property owners to replace gas furnaces with less polluting electric heat pumps.
The requirements of the Building Energy Act put forward by Chancellor Olaf Scholz’ three-party coalition were so confusing, people put off the upgrades to their heating systems or rushed to buy new gas devices before the law took effect, he said. That sapped demand for the ultra-quiet heat pump fans EBM-Papst makes.
Consumers wondered, “What is the right technology for my house?” Geissdoerfer said. “And so everybody said, ‘If I don’t have to, I better wait.’”
