Germany is the 'sick man of Europe' – Márton Nagy

Hungarian Minister for Economic Development, Márton Nagy wrote an opinion piece in Magyar Nemzet on the sanctions imposed on Russia and the effects of the policy of sanctions, saying that "the sanctions are working, but not in the way expected in Brussels: they are giving the economies of the East a boost that they may not have had on their own." Nagy goes on to say that because of the microchip sanctions, China, for example, had to develop its own 5G microchip, and that this year's Munich Motor Show "has been all about China showing its overwhelming superiority in the automotive sector."

According to Nagy, "with the war of sanctions, the EU ignited the structural bomb it's been sitting on for a long time, unaware", and the effects of the process "are best seen today in the example of Europe's ‘sick man’, Germany." He writes that Germany had unresolved structural problems even before the war, but industrial production and construction had by now plummeted and "economic activity fell back to the levels seen at the height of the epidemic. Nagy also said that the German economy has been unable to grow for nine months and this year will bring a recession."

Nagy believes that the industrial slowdown of the German economy was mainly triggered by the energy shock brought on by the misguided sanctions. According to him, the slowdown of its industry will put Germany in an even weaker position, "because its fertiliser production has already been shut down as a result of the sanctions, and they are now buying fertiliser from Russia (several times the pre-war volume). He also said that because of the forced closure of its nuclear power plants, Germany has been running its factories on French nuclear power, which has recently led to record high electricity imports."

German economic policy, Nagy wrote, does not yet have any solutions, so German companies are looking abroad for investment opportunities, "which also means that Hungary, along with America and China, could stand to gain from the onslaught of companies looking to relocate.

As a haven of economic peace, Hungary could save a significant part of the European industry by using its potential to keep European companies in the EU, while also offering them new perspectives."

According to the Minister for Economic Development, there's a process of re-globalisation underway, except that the cards are being dealt by politics rather than the market. "Our German economic ties with the incoming political and economic refugees are continuously growing stronger, while Germany's importance as our economic partner country may be proportionally diminishing, which is not in Hungary's interest," the minister wrote, adding that it is important to stress:

“it is in our interest that Germany and German companies, including car manufacturers, are successful, because then we will also be successful. Whether they are successful at home or here is only up to them.”

The German car manufacturer, Mercedes has a factory in the Hungarian town of Kecskemét, while Audi has a plant in Győr, and BMW is currently building a plant in Debrecen.

We updated the title of the article.