Recession has reached German doorsteps, warn senior economic analysts

Berlin: The German Commerce Minister had warned a month ago, ‘The United States was hit by recession following the Lehman Crisis in 2008. If Russia cuts off fuel supplies to Germany, the situation in the country will be similar to the Lehman Crisis. Repercussions of this will be felt all over the world.’ This German fear is becoming a reality, and Russia has started a blockade of fuel supplies to Germany. Senior economic analysts are warning that the German industry sector will be hit hard, and the country will suffer losses of 240 billion pounds. In that scenario, Germany will be hit by a severe recession.

Germany is known as the economic engine of Europe. Germany, along with France, is the two biggest economies in Europe. Germany had a major influence on the decisions of the European Union. The country had become strong under the leadership of former Chancellor Angela Merkel. According to analysts, Germany feels the effect of the wrong decisions taken during the Merkel tenure.

Germany was totally dependent on Russia for fuel for 15 years while Merkel was in power. Germany signed the Nord Stream fuel pipeline agreements with Russia during Merkel’s tenure. There had been strong opposition to these agreements between Germany and Russia. Analysts are accusing that the fuel crisis is developing because of excessive dependence on Russia for the country’s fuel requirements. Germany has taken a tough stand against Russia in the Ukraine conflict. This is having a direct effect on the German economy.

Russia has reduced the gas supply to Germany, forwarding the reason for repairs to the pipeline. This could result in a severe fuel shortage during peak winter. Analysts are pointing out that in that scenario, the large factories and industries in Germany will have to shut down, which will impact the German economy. The German government is making efforts to avert the fuel crisis. But according to analysts, Germany is on the brink of economic recession given the faulty decisions of the Merkel government.