Germany is one of the best economic powerhouses in the world, and it is the economic engine of growth for Europe. It designs and manufactures the world’s best automobiles and many engineering products and exports through its massive big industries. But they are heavily dependent on Russian gas because of the low cost of transportation and best price.
The main reason behind the economic recession of Germany.
After Russia invaded Ukraine, the G8 and European countries implemented economic sanctions on Russia to cut its wings on wealth revenue to suppress its power in war.
One of the major exports of Russia is crude oil, petroleum gas and wheat. Russia has been an internal part of Europe for many decades; most European nations buy Russian crude because of less transportation they get the best price from other crude oil exporters. Europe depended heavily on Russia’s petroleum gas with gas pipeline infrastructure integrated with factories, power plants, and individual houses.
So, global crude oil prices skyrocketed to a record high after putting sanctions on Russian crude. But at the same time, China and India emerged as the biggest buyers of Russian crude for low prices. India’s gets crude oil at a discount low price from Russia, selling processed petroleum products to Europe at a significantly higher price. OPEC is doing more production cuts and playing trump card by Saudi Arabia helping a secret friend Russia and showing tactics to the USA.
Suppose we see Germany’s economy, the secondary sector, which contributes 28% of the total GDP. The primary sector, which contributes 69% to GDP half of the ratio is directly dependent on secondary sector revenue and business, and more than half indirectly depends on it. The gas shortage and price rises shook Europe and mostly industrial powerhouse Germany.
The war started on Feb 2022, and after the sanctions were implemented on every significant business revenue of Russia, it crunched wings and stopped the fight indirectly. From the graph of the consumer price index of Germany, we can see the apparent spike in energy prices in the country weakens its secondary sector and, indirectly, the service sector of Germany. They can’t manufacture goods with very high input costs and manufacturing halts in the power supply interruptions to sell goods domestically and cannot compete globally with rival products manufactured at less cost. It creates a significant gap in GDP figures, and soaring inflation prices start to panic in consumer spending, and it directly creates a worst scenario.
War started in Q1 of 2002; we can see Germany’s GDP’s noticeable shaking and downfall, leading to economic recession.
Any country’s foreign policy should be in the nation’s best interest, and there should be no permanent enemies or friendly countries that always look forward to grabbing the maximum pie of world trade. Recently Germany has been considering the limits of its chemical, which is exported to China, and used Widley to manufacture semiconductor chips; without that chemical, it is hard to manufacture chips. Everybody knows the aggression of Russia; because of that, only NATO evolved. But changing business dynamics geolocation, their economy was indirectly profoundly dependent on Russia. The diplomats failed to see the alternative solutions if this scenario were created. Europe is a neighbour in the middle east, with vast energy resources, but they failed to develop p friendly nations to solve future energy problems. India and China still import Russian crude oil at lower prices, but Germany could not import oil from Iran and Venezuela by convincing the USA. France and Italy, being NATO members, are best in business to do what their country needs and are even ready to change deadly enemy to friendly countries. By the unstable mindset lawmakers without considering the interest of nation failing to increase economy, growth, stranded of living they all together through great nation Germany into a recission.
