Quote (Djunior @ 25 May 2023 19:25)
A technical recession of 0.8% during the height of an energy crisis is no big deal. Particularly since the gas and electricity prices have already come down from their peaks last summer/winter and are mostly close to their pre-war levels. The real issue for Germany is the long-term outlook: there is no political will to bring down energy prices any further or otherwise relieve consumers, there is also no will (from both politics and the capital side) to raise wages proportionally to inflation (meaning that consumer's real purchasing power is in decline), and there is strong political pressure on both businesses and citizens to invest a fuckton into climate measures which won't boost our long-term productivity or wealth (e.g. replacing all oil- or gas-based heating systems with heat pumps).
Energy sanctions against Russia were a failure, and for the record I was against them all along - but they're not the main culprit for the recession in Germany or the bad level of consumer confidence. Note that energy prices had already been soaring since mid-2021 - long before the onset of the war or the sanctions! - as a result of Russia messing with the markets in a clear preparation of the war that was to come several months later. Similarly, it was Russia which closed the gas tap starting in July 22; Germany was more than willing to continue to receive gas via Nord Stream 1 and had repeatedly blocked other countries' attempts at including natural gas on the sanction lists.
It's naive to think that the war and the economic decoupling between Russia and the West would have led to no turbulences on the markets and everything would be fine and dandy right now if only there had been no sanctions.
This post was edited by Black XistenZ on May 25 2023 08:15pm