While the German economy will only grow by 0.1 percent this year, the Dutch growth forecasts are far above that. And although Germany is one of the Netherlands’ largest trading partners, the Netherlands will not notice much of the German stagnation, says Carsten Brzeski, chief economist for Germany for ING. “Germany has slept too much in the past ten or fifteen years.”
The Dutch economy is more strongly positioned than the German economy
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For a long time, the economic rule of thumb was that if Germany sneezed a little, the Netherlands would get a severe flu. That is no longer the case, but rather the opposite, says Brzeski. The economist thinks that the Netherlands is much better positioned in the field of services and high-tech. ‘In fact, all those new sectors (…) where Germany has slept a little too much over the past ten to fifteen years.’
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The Dutch economy has therefore become less dependent on the German economy, which has relied too heavily on the production and export of industrial goods to China for too long, which has now taken over that production itself. ‘Germany has focused on the old model, the traditional industry, for too long. It has also focused heavily on trade with China. And now China is able to make the same products that Germany made. The Netherlands has made a smarter approach to more innovation in the past.’
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‘Germany has focused on the old model, the traditional industry, for too long.’
Politics doesn’t get anything done
According to the economist, the political environment also plays a major role in the German economy, he points to a government coalition in Berlin that gets very little done. ‘Perhaps it is better to have no cabinet than to have a cabinet that gets very little done.’ In the short term, according to Brzeski, there is little that can turn the tide. “It seems as if the cabinet in Berlin is already working on the 2025 elections.”
The only thing that can help, he believes, is for the global economy to pick up more strongly before 2025. And for the business community to take steps and invest, despite higher interest rates and indolent policymakers.
