Germany, the Locomotive of the European Economy, has stepped on the brakes. Can it step on the gas together with Turkey?

The development of the German economy in the last quarter century has been very rapid...

Germany is the world's fourth largest economy in terms of GDP after the United States, China and Japan, far ahead of other Eurozone economies such as France, Italy, Spain and even economic giants such as India. Germany is considered the locomotive of Europe's economic train.

But Germany was not always in a privileged or powerful position. In the late 1990s and early 2000s, Germany was described as Europe's “economic sick man” as it endured the consequences of its reunification with East Germany as West Germany. However, it rose again very strongly and changed its geo-economic position significantly, making it the economic leader and industrial locomotive of the Eurozone in a very short time.

The resilience of the German economy began to break down. Germany is in Technical Recession. What are the reasons?

The resilience of the German economy appears to be breaking. Germany faces its biggest economic challenge since reunification in the 1990s.

Considering GDP growth data for the last quarter of 2022 and the first quarter of 2023, it appears that Germany has entered a technical recession (a country enters a technical recession when it has achieved at least two consecutive quarters of negative GDP growth).

Fundamentally, developments originating from Russia, China and the USA in recent years have damaged the export-oriented mega German industry, which is the pillar of the German economy.

The invasion of Ukraine, China's rigidity and the increasing protectionism of the USA negatively affect Germany's economic growth model.

Germany was benefiting from affordable imported energy until Russia's invasion of Ukraine. The sharp rise in energy prices has been a particular problem for Germany, as much of its industry is highly dependent on energy.

In recent years, China has become both an ally, an economic rival and a systemic economic threat to the Western world. Competition and competitive elements have increased in recent years, but it is undeniable that China remains an ally without which many global challenges cannot be overcome, and Germany is well aware of this situation. Well; It is no longer economically feasible to be neither with nor without China, a complete paradox.

The advantageous situation for Germany in its trade with the USA tends to turn into a disadvantage due to the subsidies applied by the USA to the market to support its own economy.

In fact, the German economy faces more structural challenges in areas such as digitalisation, education and demography. In the field of digitalisation, Germany is clearly buckling under its own weight. Its giant industrial structure dependent on heavy industry will not be able to easily adapt to digitalization. The flexibility, speed and man-hour savings brought by digitalization are far from making their contribution to Germany in many sectors.

Alright; The effect of the gradual aging of the population, which is a problem specific to European society in general and is also felt intensely in Germany? It's a complete nightmare. Germany urgently needs a young and dynamic population.

How Can Germany Take Advantage of Turkey's Dynamism to Step on the Gas Again?

It is not possible for Germany to access cheap energy immediately. It does not seem likely that it will accelerate with the young immigrant population, which it is very reluctant to integrate into its society.

The most optimum solution for Germany; is to shift industrial sectors dependent on energy and young and dynamic workforce to Turkey, which has relatively affordable energy access and an enormous young and dynamic population.

It will be able to access Russian energy resources, which it cannot access through Russia, through Turkey, it will work in Turkey with Turks it is used to working with, it will not have to accept too many young immigrants to its country, it will be able to turn German capital accumulation, industrial knowledge and experience, and the country's brand value into profit through Turkey.

The collaboration of Russia's energy, Turkey's production, and Germany's financial and industrial powers; It will create a tremendous economic giant and the whole world will be able to benefit from the industrial wealth that this economic giant will create.

Meanwhile; Some small and medium-sized German companies have started to shift their production to Turkey, their numbers will increase, and mega-level companies will also follow this pattern.