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The question, however, is how the steel industry will survive given an additional challenge: lagging demand. Germany’s steel industry employs about 80,000 workers, but most producers have reduced output amid a growing glut, triggered by the weakness in Germany’s car and machinery sectors. ThyssenKrupp shares have dropped nearly 60 percent over the past year. Last month, several board members of ThyssenKrupp’s steel subsidiary, including former SPD leader and economy minister Sigmar Gabriel, resigned amid a dispute over management’s strategy for the business.
Trouble in the Social Democratic heartlands
A few months ago, it seemed like things could hardly get worse for the SPD. In the European election in June, the party suffered its worst showing in a national election in well over a century. Then, in state elections in Germany’s East earlier this month, the parties in Germany’s SPD-led coalition suffered big losses.
Now, the economic trouble is hitting particularly hard in what is left of the SPD’s traditional manufacturing strongholds, from Germany’s steel country in the West to VW’s base in Lower Saxony.
That means the task of turning around the Germany economy is likely to fall to the center-right opposition and Friedrich Merz, the leader of the Christian Democratic Union (CDU), which is currently polling far ahead of all other parties. This week, Merz, a former corporate lawyer with close ties to German business, announced that he will run as the conservatives’ top candidate, making him the likely next chancellor.
Merz is running on a platform to bring back the good old days of the Germany economy, including by saving the combustion engine and by boosting productivity.
“We want to and must remain an industrial country,” he recently said in Berlin.
But given the structural problems the German economy is facing, it’s unlikely any party will be able to spark an industrial turnaround anytime soon.
In other words, it’s about time Germans move on to the next stage of grieving over their once-great economy: acceptance.