The German economy is badly battered, and we are getting that too. Inflation is exacerbating everything. IHS boss Bonin shows a way out.
“If Germany has a cold, Austria gets the flu.” Is this old saying still true today? Not quite, but the current crisis in German industry also has consequences for Austria. At ZIB2, the economic researcher Holger Bonin, Director of the Institute for Advanced Studies (IHS), was a guest of Martin Thür.
The expert locates structural problems in Germany. The automotive industry in particular, the engine of the German economy, has recently shown weakness: “Today, the Chinese are also building good cars, especially e-cars,” says the IHS boss. The German carmakers had rested on their former success for too long and slept through the signs of the energy transition.
“Change is something quite normal, also a sign of progress,” Bonin continued. The weakness is that German politics does not show a long-term vision for an ecological transformation of the German economy and also an appreciation of services. The package announced by Chancellor Olaf Scholz is far too small here.
Is Germany dragging us down with it? Yes, but Austria has less to suffer because there is a stronger supplier industry in this country. “In this respect, you can decouple yourself in a way, but not completely,” says the economist.
But even in this country, the state needs clear framework conditions and investment incentives for the economy in 2030. “Inflation is ebbing away very slowly. It will also depend a lot on how costs develop.” Wage costs are also a critical aspect.
The metal workers are demanding full inflation compensation in their upcoming wage negotiations. A conclusion below this will not be accepted, said the chief negotiators Reinhold Binder (trade union PRO-GE) and Karl Dürtscher (trade union GPA) on Thursday. The employers’ side had already publicly informed them in advance that the room for manoeuvre was narrowly limited.
Bonin appeals here for a careful balance. After all, the domestic economy is also stuttering due to the inflation-related high real wage losses in the population and the resulting slump in consumption. As long as this is also in crisis, the industrialist side must consider whether and to what extent wage increases above the inflation rate are not granted.
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