The Volkswagen plant in Germany has experienced a historic moment that reflects the critical state of the German economy. For the first time in its 87-year history, the company is considering to close two of its factories in the countryfacing increasing financial pressure. During a strike, workers booed management, something never seen before in the history of the auto giant.
This episode not only marks the internal crisis of Volkswagen, but is a reflection of the deepest problems facing Europe’s largest economy. At the end of 2023, Germany recorded negative growth, pulling down the European Union’s economic forecasts. Meanwhile, other countries such as Spain closed the year with growth of 2.5%.
The former director of the airline Air Berlin, who now lives in Spain, is clear on this: “They have to adjust their workforce to survive”he emphasizes, echoing a radical solution that is gaining ground in Germany.
One of the most controversial points of the debate was the question of working hours. Deutsche Bank CEO Christian Sewing issued a strong warning: “With an average of 28 hours per week and retirement at 63, we will not succeed.” And the figures prove him right. While German workers work an average of 28 hours per week, the European average is 36 hours and in countries like Spain, this figure reaches 40 hours.
The irony is that during the previous economic crisis, Germany had been the main advocate of the idea that southern European countries, such as Spain and Greece, were working less and retiring too early. The then chancellor Angela Merkel was categorical: “It is important that in countries like Greece, Spain and Portugal people cannot retire earlier than in Germany (…) They have a lot of holidays and others very little.”
On Thursday, former German businessmen living in southern Europe seem to have realized that their economic recipe is not as foolproof as they thought. As recession hits the door and industrial giants reel, Germany is facing the harsh reality that working harder may not be the only solution.
