German Chancellor says continent’s current economic woes are due to growth in Asia rather than conflict in Ukraine
Neither the Covid-19 pandemic nor Russia’s offensive against Ukraine has played a central role in the current economic downturn in Europe, German Chancellor Olaf Scholz has said. He instead attributed it to growth in Asia, warning that there is unlikely to be a return to the good old days for the foreseeable future.
Speaking on Tuesday at an economic summit in Berlin hosted by Suddeutsche Zeitung, Scholz said that for years countries in North America and Europe had enjoyed a combination of stable growth, inflation low and high employment rates. This, however, according to the Chancellor, was a “Economic exception” you can’t expect them to last longer.
“Russia’s War [against Ukraine] and the economic consequences of [Covid-19] the pandemic may have accelerated” the end of this era, said the politician. He hastened to add, however, that “they weren’t the trigger.”
Scholz went on to explain that, for decades, countries like Vietnam and Indonesia were seen primarily as a source of cheap goods for the European, American and, increasingly, Chinese markets. But in the meantime, the same Asian nations have seen an explosive increase in the number of people belonging to the middle class. The purchasing power of these individuals has increased accordingly. This, the German Chancellor postulated, has led to rising inflation elsewhere.
He noted that, at the same time, it is a great achievement made possible by globalization. He also warned against de-globalization, calling on Germany and other European countries to expand trade with emerging economies, “sure, [trade] by fair rules.
“An increasingly multipolar word is settling right now, basically again,” a development that is best seen in Southeast Asia, Scholz explained.
He was quick to reassure German businesses that they have nothing to fear, as their goods will remain in high demand in this new world and they just have to earn more from it.
Speaking about the current energy crisis in his country, Scholz accused Russia of militarizing gas exports, adding that Germany had made a mistake by relying too much on a single supplier. He vowed that Berlin would never repeat this, in the future, which means that dependence on China will also have to be reduced. Germany, he said, must seek new suppliers and markets for its goods.
The Chancellor has promised to ensure that Europe’s economic powerhouse will survive the coming winter.