The Current State of the German Economy

With the support of the American Council on Germany, IES welcomed Timo Lochocki, Transatlantic Fellow with the German Marshall Fund, on October 28. In his lecture, Lochocki shed light on Germany&rsqou;s economic involvement within Europe and its response to the refugee crisis. In the upcoming years, Lochocki believes Germany will regain center stage in Europe and look to form alliances with more liberal-minded nations. He identified Germany’s hesitation to lead globally as a byproduct of its self-reliant economy, disappointment with key alliances, and exposure to nationalist discourse. As Lochocki observed, Germany has a limited labor supply and a population that is expected to decrease from 87 million to 75 million in the next 30 years. With the median age of German residents currently sitting at 46 years old, the reserve army of labor to which Germany has become accustomed has begun to dwindle away. In short, the majority of those expected to work (which he classified as those aged 19-65) will be working within the next one or two years.

Furthermore, Germany’s dependence on imports and exports doubled within the last year, signifying how reliable trading partners are vital to the country’s economic success and global influence. Some speculate that Germany’s open borders and allowance of immigration stem from a need for imported skilled labor. Lochocki challenged this claim, however, and pointed out that the popularization of anti-immigration rhetoric in Germany hints at underlying sentiments against such trends. To conclude, Lochocki offered insight into the upcoming German elections, predicting that Germany will be left with a stable, pro-European government that will actively combat the rhetoric of the far-right opposition.