Don’t Underestimate the German Economy 🇩🇪 

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I woke up today and decided to underestimate Germany's economy but this video set me straight

As a German it's interesting to see our economy analyzed from an outside perspective. Because I feel like we Germans hold our economy, education and welfare systems in rather low regard and view them as something that needs heavy improvements in many aspects. Yet when compared to other countries it apparently seems to be quite a high standard which is always interesting to think about.

As a German, I can confirm, that every German had a shiver, running down their spine, when you pronounced the word "Thyssenkrupp"

German here, The real challenge is keeping a manufacturing based economy going when energy prices went through the roof and companies are better off leaving the country - which many of them do.

Everybody gangsta until Germany suddenly increases military budget

An important German company that never gets mentioned is Zeiss. They produce the tools needed to produce modern microprocessors and have a monopoly on them.

I am from germany and had economics in school. The thing i missed most in this video about our economie is the principle "as much market as possible, as much state as necessary". It's the principle on which our economy was designed by and a great tool for understanding how the German economy works. Also we call "Rhine Capitalism" "Soziale-Marktwirtschaft - social market economy".

Moving to Germany was the best decision I have ever made. Even though I live in Berlin, the most cosmopolitan and lively city in Germany, there is a sense of security and serenity I had never experienced anywhere else before (I had lived in New York, Boston, and Istanbul before coming here). You get value for everything you purchase. I had never seen so much affordable stuff with such good quality in my life. Food tastes great. All local brands are much better than their global competitors. Public transportation is great. It is reliable and very well connected. The most important thing is that you don't have to be rich to live a decent life. Even without having any savings, you can live a much better life than the top 10% in the US. People have a very good understanding of morality here. Overall, you get the sense that there is no corruption at any level of government or business in the country. German people are very polite and helpful, and even though I am Turkish, I get no racism, which was something I honestly braced myself for before coming here. (Though I must admit Berlin is exceptional in many ways and you would probably witness more discrimination in another German city.) The no BS attitude that Germans have is an important reason why they were able to create this great economy and a decent life for the residents of their country. Paying taxes had never made more sense in my life before. I feel honored to be paying my taxes in Germany. Because I know that the system is not corrupt and is designed to benefit me and the society.

Germany has world-class workers. Partly because they have an excellent apprenticeship program where kids that are not college bound can get real world experience while being paid a training wage by their company. That is something we should have an America.

East Germany is poorer, but it’s not as extreme as you might think. Countries like France, Britain, the US and especially Italy have far bigger regional differences than Germany. Go to northern Scotland, Wales followed by Manchester in England and after that to cities like Schwerin, Dresden, Berlin followed by Dortmund and you‘ll know what I mean

The German "Rhine" economy is not just built on staving off Communism, it is also rooted in German mentality in general and old, medieval structures. The country basically still runs on basis of a medieval guild system. Most of them don't call themselves guilds anymore, but "chambers" and "associations" and the such, but they are still organisations that the state grants the power to decide who gets to do a certain job and who doesn't. Everyone needs to do a 2.5 to 4 year long apprenticeship with one of those guilds and pass their tests before they get a piece of paper from the guild allowing them to do a certain job. You can't even be a grease monkey in a car repair shop or a bank teller without doing a 3.5 year long apprenticeship and passing lots of exams. This has advantages and disadvantages, of course. The disadvantage is that it makes the job market inflexible. People have to chose what they want to do at age 16 and then stick to it, because switching careers later in life is incredibly hard. For one, nobody wants a 30+ year old apprentice and even if you would find a master to take you on at advanced age, what grownup with a mortgage can live off of the token salary of an apprentice for another 3+ years? Also, it makes integrating immigrants harder. People who think they can just come to Germany, span a awning over a side walk and start cobbling shoes are in for a rude awakening. You're not cobbling shoes without graduating from a 3 year apprenticeship with the cobbler's guild. You can imagine what that means for 30, 40 or 50 year old immigrants. Even the ones who want to work and want to contribute are pretty much forced into the welfare system, which makes mass immigration a suicidal lunacy in Germany and to Germany. The advantage of the system is that it keeps up standards. When you hire some handyman who passed all those guild exams, you can safely assume that he knows what he is doing. The standards of professionalism and detailed knowledge are pretty high in Germany, in pretty much every industry. It also makes people value vocational jobs more than they do in the English speaking world. There isn't that much of a difference between being a college graduate and being a non-university educated master in some field. People aren't clamoring to get into universities the same way they do in other places. That brings me to another thing that makes Germany special: It is a very egalitarian society. There are no elite ivy league schools. Rich people and poor people send their kids to the same schools where everyone gets tested by nation wide standards that only vary slightly from state to state. The point being that I think the fact that unions and capitalists, workers and bosses work together to achieve a common goal in Germany is at least in part rooted in that. They all were class mates and they played in the same soccer club together, to put it in a very simplified way. Another factor is the way German schools are set up. Kids are divided into classes randomly, according to their age. For example, when 100 kids enter a elementary school one year, they will divide them into 4 classes with 25 kids each, named "Class 1A, 1B, 1C and 1D" and then those kids stay together in those classes for the first 4 years, till they get sorted by talent and sent to 3 different types of schools, one for the average kids, one for the below average kids and one for the talented kids and on those schools they get sorted and remain in fixed classes again. Also, every class gets its own "main teacher" who will teach several courses to them and acts as a consultant and kind of as a Sheppard to the herd. The difference to US schools is that the kids in German schools develop more of a feeling of unity with their class. You don't really see the classical, stereotypical "clique" building you always see in US movies and shows about US schools. There aren't really "the joks" and "the cool kids" bullying "the nerds" and "the losers" or whatever. Of course there is bullying too on German schools, but it is pretty much limited to within those fixed classes. There is still a weird group coherency and sense of belonging within those classes. When for example a jock from Class 2B starts bullying a nerd from Class 2A, the jocks from Class 2A might even defend "their nerd" against the bullies from other classes. There is a sense of rivalry between the classes that strengthens social ties within each class. I think this mentality of "we belong together and we stick together, despite being different" that gets fostered in the schools also is reflected in the economy and in how workers and managers work together.

As good as "overtaking Japan as number 3" sounds, it's not because Germany is growing at a decent rate or has some particular plan for the future. It's just stagnation vs less stagnation, waiting for someone from behind to overtake both.

As a German who appreciates the WirtschaftsWissen channel, I still can’t imagine EconomicsExplained without English in that fine aussie accent, mate 👌🏼

It'd be interesting to see how Czechoslovakia and now the Czech and Slovak Republics ranked.

Many years ago while I was at Uni, I did volunteering work in small German town of Uberlingen. While it situated on pretty Bodensee it is actually boring and unimportant small town, where it seems only pensioners live. So.. us, 30ish international volunteers were doing renovation work on school. One day city Mayor also met us (they were all very supportive of our work) and I used the opportunity to commend him on a pretty town and asked what sort of economy they have. (This is the point of the stroy) well we have tourism (obviously): a small agricultural tractor factory, oh yes and a major Diehl factor. Diehl is a major avionics supplier both for civilian and military jets. In a small sleepy German town. And experience was similar (but not as striking) in other places I worked.

Germany despite everything, has a remarkable economic history, its bounce back following its dark past really is incredible.

Since we're on the topic of the EU I think a video on Romania's economy, the way it integrated into the European Union and the massive growth rate it's seen ever since, I think it would be a good case study for the effects of the EU

The strength the German economy derives from its automotive industry is i.m.o. often as overstated as the importance of its SMEs is understated. These SMEs are typically highly specialized, often family owned businesses operating in niche segments with a highly skilled workforce and a high level of vertical integration which even the Chinese have come to realise is very difficult to replicate.

How about exploring the 3 big boosts to the German economy: low spend on defence (massive peace dividend), low labour costs (thanks Turkey, Eastern Europe, etc.) And low energy costs (they loved Russia for a reason). Now that all three are more expensive how does this change the outlook for Germany?

You mentioned in passing two interesting points that would take up a lot of time. One is that Germans vote for policies and political parties slightly less emotionally than other nations. It's odd for me to see politicians arguing about extremely specific energy productivity policy parameters on national television instead of just saying "waah red team bad". The other one was the medium sized companies. It's interesting going around Germany to cities of less than 1m people and seeing companies that a global leaders in their fields headquartered there.

Episode Idea. Please describe a theoretical economy that would be all 10 in your rankings. That would be an interesting thought experiment.

Of course germans would be so interested in economy to watch this channel in high enough numbers to warrant a whole channel in their language

I was waiting such a long time for this. Greetings from germany, love your Chanel and that you are willing to expand into german is really cool. Looking from the inside, we tend to only see the negatives. But your positive outside view is refreshing.

Amazing video as always, i am a italian student of economy and i would love to help you translate your video in my first language, you are amazing and keep inspiring me now for more than 3 years, and i hope you the best, thanks for your work

When you talk about the german central bank you actually show a picture of Deutsche Bank's headquarters which is kinda hilarious.

The model of the social marked is much older. You could say it started with Bismarck, who introduced social welfare programs hundred fifty years ago. People were protesting against the monarchy and started to unionize. To appease the people he initiates some social programs.

I'm having a bad year; TSLA is down by $40k, ALLP is down by $35k, Draft Kings is down by $6k, NIO is down by $15K, ABML is down by $8K, and my husband is unaware. I'm only clinging to Jim Cramer's advice regarding opportunities during erratic market conditions in the hopes that I can either wait for a recovery or choose profitable investments to make up for my loss.

this videos are awesome man, thanks for doing them

Iview Germany’s so-called endless challenges as an asset. I think it helps to keep the society fluid and flexible as an American. I think this is one of our greatest disadvantages. We have become very rigid in our thinking in our political stance. Change is difficult and hard, but necessary I believe. Germany’s probably seen more political change in the last hundred years than any other major industrialized nation.

As a Polish citizent, i can't wait for video about my country. As always good epizod :)

there are quite a few issues not mentioned that are really problematic for the german economy. currently we have a rather massive braindrain and overaging population which are partially linked. young people have problems finding housing with the current prices while wages stagnated in addition with all the berueacracy. As an individual, the best strategy at the moment is to get educated here and then work somewhere else, often swiss around here, and become a 'german export product' yourself. The mentioned Automotive Industry lost quite a lot of luster by staying the same. Car manufacturers abroad caught up by now and there is no real innovation in sight. Weird policies in regards of environment protection are in place (shutting off nuclear power plants while coal plants get more lifetime and not having any contingencies in place after the slowdown of russian oil and gas export)

Germany has good farmland, rivers, and coastline. Things that economists typically underrate.

Discussing German economy requires mentioning the unique position of Germany in the EU.

As a german, i can't understand that we should have an skilled workforce. If i'm looking at the problem in our education system, this skilled workforce is sadly not a regrowing resource. But as always we german love to complain. :)

First of: I have to admit, that i was anticipating this video for about 3 years and now i have missed it's existence forr 3 weeks... Then again, well scored in discribing the german economy in such a short video. As i am from germany myself: Thank you for the point of view from someone outside the country. Been loving your videos for the past 6-7 years now and i am allways looking forward to them. So, once again, thanks for the video, i allways enjoy a view in local topics "from the outside"

As a german manager I have to say, you give us more credit than we deserve. In the past it was true, that education was our main competetive factor. But nowadays with almost free education over the internet, I can hire a person from anywhere in the world and they would still be as much qualified as a person educated in Germany. You may have to go through language barriers, but thats it. Germany isnt as innovative as it used to be and many rest on previous successes and forget to keep striving for the next better thing. Thats why other nations will overtake our position in the world.

Interestingly I watched another video yesterday that talked about Germany's shrinking workforce and that less and less people are willing to live and work there compared to some other parts of europe. Mainly because of the amount of bureaucracy and not being able to adjust to german society. This does seem like a major threat to the economy.

Thanks, been waiting for this for a while

Okay so I am a German Viewer, let me tell you something. If there is a German Viewer watching this, they will keep watching in english, even if there is a German one, don't expect to draw too many of us over to the German channel.

Would love more updates on Australia, there is rampant commentary on USA and EU all over RU-vid. How we sit in Aus, domestically and comparatively to the rest of the world would be much appreciated as all that is readily available is state (mass media) issued and not independent analysis. Any I am self educating thanks to channels like yours so I can position my finances and families future successfully. Current and 6-12 month outlooks on how we are tracking here would be great. If there are channels that focus on this I’d love to know who they are so I can follow them too. Thanks for your great content Cheers

Unasked for, but here's some feedback on the video. This seemed like a video without topic, compared to many of your other videos. Some stats and facts with little cohesion other than being about Germany and working towards the leaderboard at the end. They can't all be winners. Keep up the good work.

Consideration of the effects of baked-in demographic changes would provide a useful adjunct for your comparisons. It must be acknowledged that the challenge of quantification of how many people will be available, able, and willing to do how much of whatever might need to be done in whatever future probably militates against specific inclusion in your leaderboard comparisons.

Would love to hear your take on Nigeria (the largest economy in Africa), considering it just got a new president 2 days ago who has committed to removing its problematic petroleum subsidy literally a week after the richest man in Africa launched a brand new refinery in Lagos.

7:25 do not even need to watch that video, i’m Norwegian and Even I can tell you the Norwegian economy is so friendly because we never had an upper class only a lower class and a slightly poorer than average middle class so the oil did not do this to us, it only supported and made a system we already have even bigger. Also we have tons of plant and mineral production’s

Germanys success depended partly on buying cheap hydrocarbons from Russia and selling expensive products to China. Both is becoming increasingly difficult. We’ll see if the economy can keep up with the changes.

Third largest will be India 0:32 by every means. People in west might not like it but that's the reality. Not to mention that german economy is already in recession that not even mentioned in the video.

I think due to the population size and diversity of the economy, Germany is one of the few countries that could be compared to the US in terms of what might or might not work. I dislike it when people say "well Sweden does X so US should be able to do it". Germany, France, Italy, UK, Spain, Japan, South Korea are probably the only countries where comparisons are relatively easy.

No matter how well versed you are on a topic, you will always learn more or something new by watching an EE video. Amazing work on this one, both content and quality. Germany is fascinating, and the US can learn from them.

The German economy is facing major headwinds right now with de-industrialization due to high energy prices and competition from China with one of their main exports: automobiles. The German auto industry stuck too long with their ICE vehicles and are playing catch up with EVs now. While luxury German cars such as Benz, BMW, and Porsche might have some brandpower, I think budget and affordable luxury brands such VW and Audi are going to have some serious competition against Chinese EV makers globally.

Germany: our largest area of export is internal combustion engine cars Also Germany: we must stop the sale of internal combustion engine cars as of right now Germany: we need to stop buying energy from Russia and close our nuclear power plants Also Germany: we do not have enough energy now, reopen the coal plants Germany: **enters recession** EE: do not underestimate the German economy

Very interesting episode, although it's worth noting that in the last few days Germany has reported a 2nd quarter of negative growth. This means it's in a technical recession, it will be interesting how long it lasts!!

I am from DEUTSCHLAND and I learned for my economics exam with your videos only a couple months ago. Kinda funny that you are making this video now

Not sure, where you get the data from, but wherever it is, its not the latest. UK is no longer 5th largest economy, and hasn't been for few months now.

I'm American with German ancestry, and I'm happy seeing how Germany runs. I mean, at the end of the day, it really doesn't matter whether it's ranked 3rd or 7th on the global economic ranking. It has lots of jobs, great quality of life, vibrant democracy and lots of friends (EU, US, etc). Compared to just forty years ago, Germany has finally unified under a stable beaurecratic system essentially for the first time in its history. Hard to say Germany was a stable, prosperous state before now at any point except maybe the late 1800s - but it wasn't democratic. Economists are obsessed with GDP growth but as long as it's economy isn't shrinking I'm happy (and it doesn't lie about its figures like China)

Always interesting, thank you.

Being German and engaging in the scene of startups I wonder what your resource you are basing the statement that it is great for any kind of startup. There's a lot of hesitance in taking risky decisions in Germany which is a fundamental idea of a startup

Something that is very underrated is the city structure. Even tho Germany has one of the biggest metropolic regions in the world (rhein-ruhr region), comparable to the one of Paris and London, it is much more centralized. This means that you find many more great job opportunities without being reliant on the capital. This reduces the living costs by a lot - even the most expensive city to live in, Stuttgart, is far cheaper than the likes of London and Paris. This, combined with a cartel of supermarkets that drive the prices of food down reduces the living costs even further, increasing the living standard while not having an intact on the income.

Despite net immigration of 1.5 million last year (Population is now 84.2 million), there still is a massive shortage of workers. That's why the current government now announced a simplification of immigration bureaucracy for people from outside the EU, a shorter track to citizenship (5 instead of 8 years) and a general recognition of dual citizenship (currently this is only recognized with EU and Schengen states plus a dozen others). The massive shift in energy production, heating, gas infrastructure and military build-up is making things interesting. Despite a technical recession last quarter - mainly due to lower consumption as a result of inflation, so far the impact has been rather small. And energy prices have now come back to pre-war levels. Not sure I would watch a channel that simply translates into German. Most people sufficiently interested in EE usually understand English. But maybe it gets more attention in German youtube. But I would definitely watch it if it has different topics.

Their tech setup for bets is so advanced yet so user friendly, love it 🖥️💕

10:25 As well as a lot of so called "hidden Champions", small and medium sized companies you've never heard of but that fill important spaces in the economy and have large international dealings. For example in the municipality I'm from we have a company that produces solid paperboard packaging with (technical) design, print, die-cutting and folding done in-house. They produce packaging for global giants like _Panasonic_ (batteries) so much so that whenever they get a large order from them, they produce the packaging for a single _Panasonic_ product for weeks or sometimes even months on end with thousands upon thousands of large solid paperboard sheets turned into the back of the battery packaging you likely see in the supermarket regularly. And that company isn't like a singular exception. Germany has a good number of these hidden champions without some of which the world as we know it simply wouldn't work. You may have heard about the fact that Taiwan is the world's biggest producer of high-end semiconductors but what you might not know is that the machines you need to produce these microchips come from the Netherlands and contain high-tech mirrors that have to be produced to with in literally microscopic tolerances because their surface has to be absolutely to specifications since the transistors on these high-end chips are to unimaginably tiny that even the tiniest imperfection in the mirror used to reflect the laser on the chip to create those microscopic transistors would ruin the chip entirely. Guess where those mirrors are made. That's right: Germany. Without that single German company alone our world as it is now couldn't exist...

Can you do a video on the economy of portugal? Would love if you gave an in-depth look at the problems and strengths the country has

please do more videos on developing economies

Great video, keep up the good work

The so called Rhine Capitalism (aka Ordo Liberalism) is not just a thing they invented to hold communisim at bay. It's a improved version of German economic and social values which originated in the late 19th century (with high value products and social securities like pension and health insurances). Also a country like Germany has not a strong economy despite its challenges but rather because of them. A country that has to readjust every so often is more likely than a country that can ignore problems until the pile up and its to late. There is a certain fear that Germany may loose its position and thats why politicans and people from the economy do have an eye on the current developments. That does not mean every trend is managed successful (the internet and public digitalization for a bad example).

i cant wait for the Afghanistan economy vidioe

Great Video! Greetings from Germany

waited for ages for this video

I loved your conclusion: "Conmon goods, like defence are something that everyone can use" :)

“If a random person was asked what Germany is best know for today” oh…no “Engineering” oh right, of course 😅

Few things i cant find the sources for anymore ^^: Apart from the large companies you named, germany has a few more "hidden champions". I specifically know about the chemistry industry in this regard. Germany is home to BASF, the biggest chemical company in the world. Its also home to Bayer, another chem company that owns a lot of patents for really basic medications that are needed everywhere. Aalso its home to merck, ive heard, that they have made a lot of the liquid crystal stuff that was and still is used for lcd displays, so this company probably made some profit of many many screens that are around today. Another thing about the pension reform stuff: germany has already increased the pension age ^^. Even with the rise that macron signed into law, germany's pension age is 2-3 years higher than that of france. germans were just a bit sluggish to protest against it. (especially compared to the french ^^) super cool btw that you are making a german version of your channel 👍the german youtube scene is a little small, and now the imo best economics channel on youtube is getting in there! youll definitely do well 👍

Thank you for setting me straight on that!

The most important German law that has prevents outsourcing of the heavy industry of Germany, is the "Mitbestimmungsgesetz" law! This law requires companies of over 2000 employees to have half the supervisory board of directors as representatives of workers, and just under half the votes (really clever 🤔). Another reason for the strong innovative German economy, are the small local and community banks (according to Prof. Richard Werner), that are investing in innovation and modernization of small enterprises. ...is just my opinion as an, in Germany born, non German. By the way, I really love Germany 🙂

EE: Don’t underestimate German economy Literally nobody: “scornfully underestimating German economy “

Wreszcie odcinek o Polsce. Będę czekał!

In Germany our economy works for others! Every good company is finally owned by US oder Chinese parents, where the money flows. The rest is eaten by enormpus taxes which again go into foreign countries. A German would have to work just 50% for the same wealth.

The biggest issue and bottleneck for businnesses in Germany is the inefficency of the governmental apparatus. The bureaucracy is insane. All processes in various fields are being seveery slowed down as the ruling and controling is insanely detailed, which also discourages entrepreneurship and development.

Thank you for these videos EE, I occasionally show them in my Business and Finance class and my kids always love it and say the learn something every time.

Guten Abend! Ich bin hier um sie zu informieren das diese Kommentarsektion nun Eigentum der Bundesrepublik Deutschland ist. Wir möchten sie daher bitten umgehend ihren Rundfunkbeitrag und ihre Steuern zu bezahlen.

I don't think anyone has underestimated Germany since 1939, great video.

Congrats on the second channel! Fingers crossed we get a French one, too ^.^

They've really shot themselves in the foot with Energiewende. Whatever your opinion on the so called carbon crisis, it's prohibition on nuclear power is insane.

You forgot the biggest economic problem Germany have now - Energiewende. Lots of ecoterrorists thinks that closing down nuclear power plants is clever 😁

Quite surprised to see a video on Germany made in 2023 that misses out on the massive challenges faced by no longer being able to import cheap Russian natural gas. For some heavy industries this resource still cannot be replaced by renewable electricity, either because natural gas is used as a direct input instead of just an energy source, or because it's the only way to get something like a furnace hot enough.

as a Suisse, our nrothern neighbour is working very efficient. they do things right in Germany. You can trust in their workmanship and their products. Aside of Fc Bayern München, they are quiet alright.

It would be nice if you specified if the gdp and gdp per capita figures are nominal or ppp so i dont have to google it

They're having problems with the EV transition. Germany might be a nation-sized Detroit within 10 or so years.

Germany has an excellent apprenticeship Program.They have created a wellspring of Technocrats who help create quality Goods for their industry. Germany has good planners.

Germany's economic structure (capitalism combined with a strong social safety net) is very similar compared to other northern and western European countries, but of course it is by far the largest and therefore the most influential.

I will never watch the German version, simply because I love the original Australian accent and very unique delivery so much. If phonebooks still existed, EE could make a whole video channel reading them aloud and I would watch it.

I'm surprised you didn't list BASF as a company example.

You are the best counterindicator.

As you make a video about Poland, will you make videos about the other Central European countries? (As a Hungarian, I am very interested about what you think of the region’s economies)

Hey I know its easy to find but it would be nice if you would put the link to the german channel in the description or in the video at that minute (you even said you would do so in the video (13:55))

Germany Deserved a 8/10 for stability, cause let's be honest it's the most stable European superpower.

Germany just overtook Japan! So “end of the decade” became “before middle of the decade”.

I would like to see your/your Teams take on Peter Zeihans predictions over the coming deglobalization and if you see his spekulations in geopolitiks and demographics as accurate or if there is a flaw in them.

Well the leader board makes it very difficult to compare countries . There are a lot of 7.8 countries

Seems like this was way too weighted due to the unfairly low “growth” score. 9,8,8,10 seems amazing, but add the 4 and you just get 7.8. I think when making the growth score you should take into account that richer countries are far more likely to just grow more slowly in terms of percentage- it is much easier to double the size of an economy when you are doubling almost nothing to begin with.

Good video as always Economics. Could you next time do a video about balkan countries?