CGTN Europe spoke to Enzo Weber, Head of Forecast at the Institute for Employment research of the German Federal Employment Agency.
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00:00Professor Enzo Weber is the Head of Forecasts and Macroeconomic Analyses at Germany's Institute for Employment Research.
00:08When you see the German economic situation, Germany is now in a stagnant situation for three years,
00:15and we already have severe problems in the manufacturing transformation.
00:20So that's another backlash, especially for German manufacturing,
00:27since the German business model is pretty much built on being a strong exporter,
00:33and the US outside Europe is the most important destination.
00:38So therefore, especially the uncertainty among the Trump tariffs, it's really critical for the German economy.
00:48And with tariffs upending global trade, what could that mean for Germany's labor market in particular?
00:54Well, from our simulations, we see that we can expect quite severe jobs in employment.
01:05So in the first year, it will affect about 90,000 jobs in Germany.
01:11In the medium run, it can be almost 200,000.
01:15And that comes in addition to a situation where German manufacturing is already losing more than 10,000 jobs per month.
01:24So this can be critical for the German labor market, because the manufacturing jobs, they are the most productive ones.
01:31They are paying well.
01:33They are well organized and highly established.
01:35So that would be a big loss.
01:38So Germany is really in need to innovate in its manufacturing sector also in order to secure this high-quality employment.
01:48And what kind of structural change do you think could happen in Germany as a result of these converging crises?
01:54So what we see is that the traditional manufacturing sector is coming under pressure.
02:03It began with the energy crisis, but now also in the general transformation.
02:10And the established parts are getting under pressure.
02:15But at the moment, we are not good enough in developing new business models in this transformation.
02:22But we can see that new business models would be possible, because they require technical qualifications, which are quite strong in Germany.
02:31For example, in the electrical sector, in machine building and others.
02:36So Germany has to use its fundamental strengths, technical strengths, in order to produce new products and business models.
02:45That's the transformation we have to do in Germany.
02:48It's possible, but at the moment, we are still weak in the whole development.
02:54Therefore, we're in the third year of stagnation, and the tariff conflict definitely sets the risk for a severe recession.