A new report from the German Economic Institute (IW) in Cologne reveals that the German economy has incurred a staggering 735 billion euro loss over the past five years, primarily due to the COVID-19 pandemic, the war in Ukraine, and other geopolitical disruptions.
“COVID-19 and Ukraine have virtually paralyzed corporate investment activity. This will reduce our production capacity for many years to come. Germany is experiencing the most severe economic crisis since reunification,” said Michael Gremling, Chief Economist at IW.
He emphasized that addressing this economic gap will be a major task for the next German government, which may need to implement measures such as financial incentives, lower energy costs, and reducing bureaucratic hurdles.
In light of these economic challenges, representatives from the CDU/CSU and SPD, potential coalition partners in the Bundestag, have recently reached agreements on a series of reforms. These include easing the “debt brake,” which restricts the government’s borrowing from the state budget, and allocating additional funds to defense and a special infrastructure repair fund.
