Sun goes down on German economy as recession drags on and government spending is slashed

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Solar industry layoffs are tip of iceberg in a beleaguered German market facing little growth and much-needed fiscal belt-tightening

An employee works on a solar panel at Meyer Burger in Freiberg. Some 400 staff were let go as the company blamed cheap competition from China and a thumbs-down from Berlin for additional subsidies.

The slow strangulation of eastern Germany’s solar industry, once a major hope for the region, reflects the wider, grim outlook for Europe’s largest economy.How can I help my mum if she refuses to sign an enduring power of attorney? For Germany’s leading economists, however, the country’s biggest problem is political: the warring three-way coalition led by chancellor Olaf Scholz’s Social Democratic Party and backed – mostly – by the Greens and liberal Free Democratic Party .

It’s a complaint you can hear from players across key economic sectors, from chemicals to construction: Berlin’s so-called traffic-light coalition is one long economic, political and ideological traffic jam. On Wednesday, in a telling sign of the times, Green economics minister Robert Habeck hosted a summit of Germany’s 20 leading arms manufacturers, including tank-maker Rheinmetall and Thyssen Krupp Marine Systems.

And Germany’s arms industry giants like Rheinmetall are in hot demand. A year ago, its chief executive, Armin Papperger, said that €400 per share was “realistic” for his firm which, in addition to tanks, builds anti-aircraft systems, munitions and military transporters. Rheinmetall shares ended trading last week at €521 a piece, up 472 per cent in the past two years.

In addition to the central bank’s proposal, the spring forecast urges a transition phase for reactivating the deficit limit “instead of an abrupt tightening”.

 

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