Reviewing last week’s figures, economist Folker Hellmeyer said during his weekly podcast that the only hope for “brighter horizons for the industrial economy” is that if Hungarian Prime Minister Viktor Orbán’s exploratory peace talks in Kyiv, Moscow and Beijing bring “some steps in the direction of diplomacy.”
Italian industrial production figures and German trade figures, published yesterday, complete the picture of the catastrophic trajectory of the three largest EU economies as a result of self-inflicted sanctions and Green deindustrialization.
The Italian figures show a relative improvement month-to month, but a negative output year-on-year. Production in May grew 0.5% to April, not enough to correct a long negative trend: for the 16th consecutive month, the year-on-year manufacturing output is down by 3.3%. As we reported, year on year figures for Germany are −6.6%. France, which did not suffer the same energy price increases as its partners thanks to its more intense use of nuclear energy, shows a better year on year performance, but it fell 2.1% in May to April.
As for foreign trade, export champion Germany kept its current accounts surplus, but only thanks to a dramatic drop in imports (6.6% m/m and 8.7 y/y). Exports declined but not as strongly (3.6% m/m, 1.6% y/y). The strongest decline was in exports to China with −10.2%. The United States is Germany’s top export market, despite a decline of 2.9%.
Volker Treier from the German Chamber of Commerce is quoted by Handelsblatt saying that “It’s not just geopolitical uncertainties and trade barriers that are slowing down exports.… A high level of bureaucracy and costs” is also gnawing away at the competitiveness of companies. With “bureaucracy,” Green and climate regulations are meant, which make business life almost impossible.
