Green economic policy and de-industrialization: an economist's assessment

Green economic policy and de-industrialization: an economist's assessment

The Greens and business have a complicated relationship. Many business owners blame the Greens for bureaucracy, high energy prices and excessive regulation. Roland Berger, founder of the management consultancy of the same name, even goes so far as to claim that the Greens' policies endanger Germany as a business location and lead to de-industrialization. But is that really the case?

Industrial associations do not like to comment on green economic policy. An economist, Joachim Ragnitz from the Ifo Institute in Dresden, sees de-industrialization as exaggerated. He points out that there is already a climate protection law that was passed before the last federal election and has the goal of making Germany climate neutral by 2045.

However, the situation changed due to the Ukraine war. This conflict made energy scarce and expensive in Europe. According to Ragnitz, this means that many industrial companies and private households may be unable to make the necessary adjustments. Ragnitz is of the opinion that the Greens are too ambitious and are trying to make Germany a pioneer in the energy transition. If other countries do not follow suit, this will have little impact on climate protection, but will lead to high energy costs and possibly the departure of energy-intensive companies.

The Federal Association of Medium-Sized Businesses also criticizes the Greens. They leave the potential for making energy cheaper unused, which harms the economy. The electricity tax in Germany is many times higher than the minimum level set by the EU. A reduction in energy costs could be achieved by reducing VAT on electricity. There is an urgent need for action on the part of those who have prevented this so far.

However, the Greens reject this criticism. They argue that the government has curbed rising energy prices through price caps and that natural gas has not become scarce this winter. Sandra Detzer, economic policy spokeswoman for the Green parliamentary group, emphasizes that wind and solar energy are already the cheapest forms of energy and that the phase-out of coal and nuclear energy should continue consistently. This opens up new opportunities for industry, such as the construction of solar or battery factories.

Detzer also points to a change of opinion within the economy. Former management consultant Roland Berger accuses the Greens of de-industrialization, while the new head of the management consultancy is calling for speed in the energy transition.

Overall, the relationship between the Greens and business is complex. The Greens have ambitious climate protection goals, but these can have an impact on the economy and energy costs. Some industry associations and medium-sized businesses are calling for measures to reduce energy costs. It remains to be seen how the Greens' policy will develop and what impact it will have on the market and the financial sector.

Source: According to a report by www.mdr.de.