https://sputnikglobe.com/20240209/germanys-economic-dilemmas-deepen-as-corporate-distress-takes-hold-1116662356.html

Germany's Economic Dilemmas Deepen as Corporate Distress Takes Hold

Germany's Economic Dilemmas Deepen as Corporate Distress Takes Hold

Sputnik International

Germany's economic woes keep building up, as 2024's gloomy early surveys show a bumpy road ahead for the country.

2024-02-09T11:30+0000

2024-02-09T11:30+0000

2024-02-09T11:30+0000

world

bloomberg

deutsche bank

world economic forum

ukraine

russia

germany

business

https://cdn1.img.sputnikglobe.com/img/07e7/08/18/1112856658_0:171:3035:1878_1920x0_80_0_0_10efb046d586ce0da75687c5dc89dfc7.jpg

According to Bloomberg, investors lending money to German companies are now demanding higher interest rates than companies in the rest of the Eurozone. This is due to several factors, including the struggling economy, real estate troubles, and Germany's reputation for having the highest corporate distress ranking in Europe.This predicament came about due to surging energy prices, which began after Germany joined the West's anti-Russian sanctions. Consequently, the country had to cut off its supply of cheap gas to its energy-dependent manufacturing sector.There has been a marked decline in borrowing by businesses to invest in factories, machinery, and technology. This shows that Germany's economic growth is impeded in the long term, since companies are currently more focused on tackling their problems.The bigwigs at the World Economic Forum (WEF) in Davos last January were feeling quite despondent. It was evident that Europe's largest economy was experiencing instability and grappling with fierce competition from other market players in the fields of machine and car production, particularly in the domain of electric vehicles (EVs).The problem is further compounded by interest rate hikes over the last two years, revealing setbacks in the German property market. In January, more than $13.6 billion in loans and bonds doled out by companies in the country were distressed, which is13 times Italy’s level, according to data gathered by Bloomberg. A report by Alvarez & Marsal, a consulting company, says that roughly 15 percent of firms in the recession-hit nation are in trouble.Additionally, Germany is facing a budget crisis. Despite Chancellor Olaf Scholz's coalition government managing to overcome the difficult challenge of passing this year’s budget, there's still a €20 billion gaping hole in the budget expected in 2025, sources familiar with the budget calculations disclosed.Germany's budget problems have caused a decline in approval ratings for Scholz's SPD, Habeck's Greens, and Lindner's FDP. The AfD now polls at 19 percent and shows no signs of losing ground, just trailing behind the Christian Democrats (CDU) with 32 percent.

https://sputnikglobe.com/20231210/majority-of-germans-disapprove-of-scholzs-performance-amid-worsening-economic-struggles---poll-1115504029.html

ukraine

russia

germany

2024

News

en_EN

high interest rates in germany, german companies under economic distress, german businesses, europe's economic powerhouse, europe’s biggest economy, german property market, european central bank.