Economic Challenges: „Die Antwort liegt in Europa“ – Warum Deutschland nicht allein aus der Krise kommt

In the latest episode of Economic Challenges, Handelsblatt Chief Economist Bert Rürup and Michael Hüther, Director of the German Institute of Economics, delve into the structural causes of Germany's growth weakness. Rürup identifies three major problems: the growth outlook may not be as dire as some claim, but it's not particularly good; the demographic aging surge caused by the departure of baby boomers acts as a growth brake; and the decades-old export model is hitting its limits due to trade pressures from US President Trump's tariffs and China's rise as a high-innovation industrial power.

Hüther, on the other hand, sees signs of stabilization: for the third quarter in a row, there has been robust growth of around 0.3 percent, and intra-European trade is partially offsetting the decline in trade with the US and China. The core question, according to Hüther, is what economic policy approach Germany and Europe should adopt to tackle these new challenges, from resilience against critical commodities to the overhaul of the steel industry.

One point of consensus is that the future lies not in national solutions. "We must move away from the category of national economy. The answer lies in Europe," Rürup asserts. The intraregional trade within Europe accounts for 63 percent of total foreign trade. However, Rürup and Hüther believe this strength is not utilized politically enough.

Central to their discussion is whether the euro could rise to become the global benchmark currency. The Trump shock and the weakening dollar are fueling this debate. Hüther sees an historic opportunity for the euro to become a reserve currency and advocates for a secure European investment product, possibly in the form of Eurobonds.

Rürup agrees, expressing surprise that it is Germany, with its highest dependence on foreign trade, that is so strongly resisting this path.