🔴 TOTAL COLLAPSE: German Economy Is DONE as Its BIGGEST Employer Shuts Down Operations

Summary

The video discusses Germany's economic downturn, with Volkswagen considering plant closures due to declining sales and the shift to EVs. It highlights the impact of decoupling from China and Russia, Germany's major trade partners, on its economy. The script also mentions China's growing EV exports to Europe and the EU's protectionist measures. The economic crisis in Germany, the largest EU economy, is seen as a broader issue for the union, with forecasts predicting a shrinkage in 2024 and a rise in unemployment. The video concludes by noting the lack of support for Chancellor Schultz's policies amidst these challenges.

Takeaways

• 🏢 Germany's economy is facing significant challenges, with forecasts growing grimmer by the day.
• 🚗 Volkswagen, Germany's largest industrial employer, is considering closing two plants due to declining sales and difficulties transitioning to electric vehicles (EVs).
• 📉 Volkswagen has lost nearly a third of its value over the past five years and is currently the worst-performing European carmaker.
• 🌏 The decline in Volkswagen's fortunes is partly attributed to reduced financial support from China, its largest market.
• 📈 Despite EU tariffs, Chinese EV exports to Europe, including Germany, are increasing, suggesting a preference for Chinese EVs over Volkswagen's offerings.
• 💹 China's and Russia's economies are projected to grow faster than any EU economy, despite facing their own challenges.
• 🛑 Germany's economic downturn is not just cyclical but also structural, indicating a deeper, long-term issue.
• 📉 The German economy is expected to shrink again in 2024, following a contraction in the previous year.
• 🔻 The unemployment rate in Germany is expected to rise to 6.1%, reflecting the broader economic challenges.
• 🗳️ German Chancellor Olaf Scholz faces political headwinds, with recent elections showing a lack of public support for his policies.

Q & A

What is the current economic situation of Germany as discussed in the script?

The script describes Germany's economy as being in a dire situation, with economic forecasts becoming increasingly grim and no immediate hope for recovery unless significant policy changes are made.

Why is Volkswagen considering closing plants in Germany?

Volkswagen is considering closing two plants in Germany due to years of declining sales and major difficulties in transitioning to electric vehicles (EVs).

How has Volkswagen's value changed over the past five years?

Over the past five years, Volkswagen has lost nearly a third of its value, making it the worst-performing European carmaker at the time of the script.

What is the impact of Volkswagen's potential plant closures on the German economy?

The potential closures could have a significant impact on the German economy, as Volkswagen is not only an automaker but also Germany's largest industrial employer, with implications for employment and supply chain.

Why is there a decline in Volkswagen's sales, according to the script?

The script suggests that a decline in sales is partly due to the lack of financial support from China, which is Volkswagen's biggest market, and challenges in transitioning to EVs.

How is the Chinese EV market performing in comparison to Volkswagen?

Despite the EU's additional tariffs on Chinese imports, Chinese EV exports to several European countries, including Germany, have been increasing, indicating a preference for Chinese EVs over Volkswagen's offerings.

What is the role of China and Russia in the economic challenges faced by Germany?

Germany's economic challenges are exacerbated by its decoupling from China, its largest trade partner, and losing cost-efficient energy resources from Russia, which are not considered smart policy moves.

What are the projections for the German economy in 2024 according to the latest forecasts mentioned in the script?

The German economy is expected to shrink again in 2024, following a contraction in the previous year, with GDP likely to fall by 0.1%.

What is the expected unemployment rate in Germany as per the script?

The unemployment rate in Germany is projected to rise up to 6.1%, which is a significant concern for the economy.

How does the script describe the nature of the economic crisis in Germany?

The script describes the economic crisis in Germany as not only cyclical but also structural, indicating a deeper and more persistent issue than typical business cycles.

What is the broader implication of Germany's economic downturn for the EU?

As Germany is the largest economy in the EU, its economic downturn is likely to lead to weaker performance across the union, affecting the entire region.

Outlines

00:00

🚗 Volkswagen's Struggle Signals Germany's Economic Downturn

The video discusses the economic challenges faced by Germany, particularly focusing on the automotive industry. Volkswagen, Germany's largest industrial employer, is considering closing two plants due to declining sales and difficulties transitioning to electric vehicles (EVs). This move comes after the company lost nearly a third of its value over the past five years, making it the worst-performing European carmaker. The video suggests that Germany's economic woes are tied to its trade policies and its reliance on China, as indicated by Volkswagen's CEO mentioning the lack of financial support from China. The video also contrasts Germany's situation with the growing EV exports from China to Europe, suggesting that Chinese EVs are more competitive. The broader economic downturn in Germany is expected to impact the entire EU, with forecasts predicting a shrinking economy and rising unemployment rates.

05:00

📉 Germany's Economic Crisis and Its Impact on the EU

This paragraph delves deeper into Germany's economic crisis, emphasizing its broader implications for the European Union. The German economy, being the largest in the EU, is expected to contract in 2024 following a previous year of decline. The Keel Institute has revised its growth expectations downward significantly, from a 1.1% increase to a 0.5% increase, indicating a pessimistic outlook. The unemployment rate is projected to rise to 6.1%. The crisis is described as not only cyclical but also structural, with the German economy failing to show signs of recovery. The video also touches on the pressure faced by European and US carmakers due to regulatory pushes for EVs, despite a decrease in consumer purchasing power. The economic challenges are compounded by the lack of public support for Chancellor Schultz's policies, as evidenced by recent election results. The video concludes with a call to action for viewers to engage with the content and anticipates further discussion in subsequent videos.

Keywords

💡Olaf Schultz

Olaf Schultz is the Chancellor of Germany, a key political figure whose leadership is discussed in the context of Germany's economic challenges. The video suggests that Schultz's policies may not be resonating with the German public, as evidenced by recent election results, and his handling of the economy is a significant part of the video's narrative.

💡Economic collapse

The term 'economic collapse' refers to a sudden and drastic decline in a nation's economic activity, often marked by a sharp drop in GDP, high unemployment, and business failures. In the video, the economic collapse of 2020 is mentioned as a pivotal event from which Germany's economy has not fully recovered, setting the stage for the current economic struggles discussed.

💡Volkswagen

Volkswagen is a German automaker and a major employer in Germany. The video discusses Volkswagen's consideration to close plants in Germany due to declining sales and challenges in transitioning to electric vehicles (EVs). This decision is indicative of broader economic issues within Germany's automotive industry and its impact on employment.

💡Electric vehicles (EVs)

Electric vehicles (EVs) are vehicles that use electric motors and batteries instead of internal combustion engines. The video highlights the challenges faced by traditional automakers like Volkswagen in transitioning to EV production, which is a significant factor in their economic struggles. It also contrasts the decline of German automakers with the rise of Chinese EV exports.

💡Trade policies

Trade policies refer to the laws and regulations that govern international trade. The video suggests that Germany's past trade policies were more successful and beneficial to its economy, implying that a return to such policies could be a solution to its current economic woes.

💡Foreign policy

Foreign policy encompasses how a nation interacts with other countries and its approach to international relations. The video implies that Germany's recent foreign policy decisions, particularly regarding trade and energy, have not served its people well and have contributed to its economic downturn.

💡Decoupling

Decoupling, in the context of the video, refers to the strategic move by Germany to reduce its economic dependence on China, its largest trade partner. This decision is presented as a factor contributing to the economic challenges faced by German companies like Volkswagen.

💡EU economy

The EU economy refers to the collective economic activity of the European Union member states. The video suggests that Germany's economic downturn is not an isolated issue but could have broader implications for the entire EU economy, given Germany's status as the largest economy within the bloc.

💡Sanctions

Sanctions are penalties imposed on countries to force a change in behavior, often in response to violations of international law or human rights abuses. The video discusses the impact of sanctions on Russia's economy, suggesting that while they may be hurting, Russia is not significantly deterred by them.

💡Unemployment rate

The unemployment rate is the percentage of the labor force that is unemployed but actively seeking work. The video highlights the expected rise in Germany's unemployment rate as a significant consequence of its economic downturn, indicating a broader social and economic impact.

💡Structural crisis

A structural crisis refers to a deep-rooted and long-lasting economic problem that is not easily resolved. The video describes Germany's economic challenges as structural in nature, suggesting that the problems are systemic and will require more than short-term fixes.

Highlights

Germany's economy is facing a severe downturn, with no immediate hope for recovery.

Volkswagen, Germany's largest industrial employer, is considering closing two plants due to declining sales and difficulties transitioning to EVs.

Volkswagen has lost nearly a third of its value over the past five years, making it the worst-performing European car maker.

Car sales in the EU are below pre-2019 levels, indicating a broader economic issue.

Volkswagen's CEO attributes the company's struggles to a lack of financial support from China, its biggest market.

EV exports from China to Europe are increasing, suggesting a shift in consumer preference away from German automakers.

Germany's economic policies, including decoupling from China and losing cost-efficient energy from Russia, are seen as detrimental.

The IMF projects that China's and Russia's economies will grow faster than any EU economy.

Despite EU tariffs, Chinese manufacturers may still be able to sell cars profitably in Europe due to cost advantages.

The German economy is expected to shrink again in 2024, with a revised GDP forecast down to a 0.1% fall.

The unemployment rate in Germany is projected to rise to 6.1%, indicating a worsening economic situation.

The Keel Institute suggests that Germany's economic crisis is not just cyclical but also structural.

European and US car makers are under pressure from regulators pushing for EVs, despite decreased consumer purchasing power.

German Chancellor Schultz faces both economic troubles and a lack of public support for his policies.

Transcripts

[Music]

hello everyone welcome back thank you

for being here when you constantly act

against your own interests and execute

the orders of someone to your own

detriment you should not be surprised

when the walls around you start to

crumble and the entire house of cards

starts to collapse and don't be too

surprised either when that's someone

whose orders you willingly executed for

a long time doesn't really come to your

resue

that was never part of the plan to begin

with Germany's Olaf Schultz is learning

this as we speak Germany once named the

sick men of Europe might very well be on

its deathbed since the dramatic economic

collapse of 2020 while remember what

happened then Germany's economy actually

failed to fully recover and now its

economic forecasts grow Grimmer by the

day it is safe to say there's no hope

for it in sight without the country

reversing back to its trade policies

that it used to have and also getting

back to at least somewhat of a sensible

foreign policy that actually served it

people so well for decades in the

beginning of September for the first

time in history the world famous German

automaker Volkswagen announced that it

is considering closing two plants in

Germany Volkswagen is not just an

automaker it has been Germany's largest

industrial employer theany company

employs

300,000 workers and hundreds of

thousands more individuals help Supply

the company Volkswagen cited years of

declining sales and major difficulties

transitioning to EVS as the main reasons

behind its planned shutdown over the

past 5 years the company lost nearly a

third of its value and now it is the

worst performing European car maker at

this time as the auto makers planning to

close German plants and end job

guarantees worker unions are trying to

block these closures to be fair Car

Sales have been declining in the EU as a

whole at this time for example car sales

are well below pre 20109 levels Oliver

Bloom the company's CEO reportedly

pointed to one of the two main reasons

that caused such dramatic collapse of a

once's biggest company in Germany to

Reuters he actually said the quiet part

out loud he said there are no more

checks coming from China he said so

they're not getting money from China

referring to Falling profits in

Volkswagen's biggest Market okay now

we're getting somewhere and now we're

hearing at least part of the truth by

the way you might find it really

interesting that while the German

automaker is struggling EV exports from

China to Belgium to the UK Germany and

Spain have been increasing

so people are more willing to buy

Chinese EVS than they are uh an EV from

Volkswagen decoupling from China

Germany's biggest trade partner for well

over a decade as well as losing coste

efficient energy resources from Russia

really were not smart policy moves on

the other hand China's and Russia's

economies are doing just fine sure they

have their own issues but the

international monetary fund for example

projects that they will grow faster than

any EU

economy when you speak to Putin does he

acknowledge the sanctions does he

acknowledge how much his economy has

been hurt or does he just not care I

think he cares but he will not really

admit it so you get

some you get some idea that it really is

hurting him and that he understands the

Deep impacts of our sanctions on his

economy and I'm always mentioning it

because it's necessary to say this is

now happening to a country that is not

that advanced that is

really needing all the Technologies from

the rest of the world for having a

similar standard of living and for

having the chance to be part of a growth

in the world economy and this is now the

real damage to the Russian economy that

they have no chance to do this the

telegraph recently reported that even

though the EU has announced additional

tariffs ranging from

17.4% to

37.6% on Chinese Imports which already

carry a 10% import Levy such is the cost

advantage that many Chinese

manufacturers may still be able to sell

cars profitably in Europe clearly higher

Imports and other protectionist measures

are not the answer here they're not

going to resolve the issue Volkswagen is

just a symptom of a much broader deeper

economic downturn that will impact the

EU because this isn't just Germany's

problem Germany is the biggest economy

in the EU as you know and whatever it is

experiencing is likely to expand

according to the latest European

forecast German economy is expected to

shrink again in 2024 after it has

already fallen the previous year

subsequent possibilities of recovery are

weak positive signals in the middle of

the year have not been confirmed which

is why the Keel Institute is revising

its expectations for this year and its

coming year significantly downwards GDP

is likely to Fall by

0.1% in 2024 compare that to their

forecast of a positive 0.2% increase for

2025 growth expectations those are down

from 1.1% to

0.5% that is a dramatic revision down

the unemployment rate this is very

important the unemployment rate is

likely to rise up to

6.1% the keil Institute further

explained that the German economy is

increasingly facing a crisis that is not

only cyclical as you would expect for

any business cycle but a structural in

nature the KE Institute further drives

the nail in the coffin of the German

economy saying the German economy is not

getting off the ground the signs of a

beginning recovery that were observable

a few months ago have not materialized

leading indicators now are signaling

that economic output will continue to

stagnate for the time being given the

current low level of overall economic

production however the recovery will

remain weak overall we have revised our

forecast downwards as FKS Fagen plans to

shut down its German plans for the first

time in 87 years European and US car

makers are also under pressure from

Regulators who push EVS despite the fact

that fewer consumers whose purchasing

power has decreased are willing to pay

more for an EV rather than purchase a

gas engine Germany is the biggest

economy in the EU and whatever it is

experiencing will translate into weaker

performance across the union for German

Chancellor Schultz these circumstances

are less than POS positive since in

addition to economic troubles the latest

elections show that the German

population does not support his policies

whatsoever thank you for watching I hope

that this video was interesting remember

to like subscribe and share goes a long

way and I will see you back here

tomorrow enjoy the rest of your day take

care

[Music]