Germany loses ground in int’l competitiveness: study

Germany was the “biggest loser” in a comparison of 21 international business locations, dropping four ranks since 2020 to 18th place, according to a study by the Centre for European Economic Research (ZEW) on Monday.

“The quality of Germany as an industrial location has fallen dramatically,” said Rainer Kirchdoerfer, board member of the Foundation for Family Businesses that published the study, in a statement.

Europe’s largest economy developed negatively in terms of taxes, regulation and infrastructure and could “hardly keep up” with leading business locations in North America, Western Europe and Scandinavia as a result, the study found.

The country’s “only clear edge” was its relatively low level of government and household debt, according to the study.

In the third quarter of 2022, Germany’s public debt even decreased by 19 billion euros (20.5 billion U.S. dollars) to 2.33 trillion euros, according to the Federal Statistical Office (Destatis). Compared to the previous year, public debt only rose slightly by 3.9 billion euros.

As Germany’s ability to act in crises was burdened by a “massive array of regulations,” the current energy crisis should be viewed as an “opportunity to reverse the country’s direction,” according to the study.

After losing Russia as its most important energy supplier last year, Germany hastened to find new supplier agreements as liquefied natural gas (LNG) terminals were built on the North Sea to create the necessary infrastructure.

In the process, approval procedures had been “sharply shortened” and new plants had been built in “unimaginably short time,” according to the study, “These successes must not remain exceptional cases.”

Chancellor Olaf Scholz, who was present during inauguration of the first LNG terminal, also praised the rapid provision of the facilities and said that this was “now the new German pace at which we are advancing infrastructure.” (1 euro = 1.08 U.S. dollar) ■

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