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Gianni Berardi's avatar

I apologize for going off-topic. I came across this study (https://www.iwkoeln.de/presse/pressemitteilungen/christian-rusche-geldabfluesse-in-deutschland-so-hoch-wie-nie.html) which reveals that in 2022, Germany made foreign direct investments of 125 billion euros, compared to only 10.5 billion euros of foreign direct investments in Germany. The causes identified include American subsidies, non-competitive energy costs, excessive reliance on old-school engineering tradition, limited political and commercial responsiveness to sectors with greater growth potential, a single technological champion (SAP), and a static and fragmented financial system. According to the latest forecasts from the IMF, Germany is projected to be the only G7 country to experience a contraction in growth in 2023, at a rate of 0.1 percent. Out of the last five quarters, only two have shown positive signs.

While the situation is evolving, if we add the following factors to the ones listed above:

1- The end of the internal combustion engine and European de-risking in China

2- Challenges and costs for low-income groups in the ecological transition

3- Having to contend with ideological impulses that lead to irrational choices such as rejecting nuclear power

Then the risks of triggering a vicious circle increase, in which anti-European voices gain strength. At the same time, a weakened Germany drags down Italy, whose economy can be considered closely intertwined with that of Germany (as exemplified by the production chain involving northeastern Italy), and subsequently affects the entire continent in a cascading manner.

What could be possible solutions?

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