Saturday, February 10, 2024

Deindustrialization 24, UK and Germany degrowth and high food inflation

Germany and UK are Europe's two biggest economies and they -- plus many other Europeans -- are in degrowth economic trend. Germany contracted in Q3 and Q4 2023 at -0.2% while UK has a crawling growth of only 0.3%.

Food inflation, until Jan. 2024 Germany has 4.2% and UK has 8% in Dec. 2023. An industrial country is not supposed to have this situation because... they are industrialized. They can mass produce, mass transport, mass storage food. But their climate-energy policies are simply leftie greenie, and they suffer high energy and food prices while pursuing degrowth econ, the worst that any country can hope for. And this trend is replicated in Italy, France, many other European countries.

Source: Trading Economics.

The Philippines and other developing countries should never follow Europe's climate and energy policies that are leftie-greenie, stay the usual route and attract companies leaving Europe.

Meanwhile, some recent reports I saw.

(1) Britain is on the brink of another 1973-style disaster
SAM ASHWORTH-HAYES  18 January 2024

Between the race to net zero, the failures of the Bank, and the dysfunction of the British state, we could be well on our way to a repeat of 1973.

Right now, Britain makes it through dark, windless days by turning to fossil fuel generators – mainly gas power plants. These could be manipulated into net-zero compliance through carbon capture and storage, but as intermittent renewables account for an ever larger share of generation and demand grows – particularly as gas heating is phased out for heat pumps – we may find we need more than the existing capacity to back up our grid.

(2) ‘Very worrying’: Trade unions alarmed by EU’s industrial collapse
By Thomas Moller-Nielsen | Jan 17, 2024

Fears were compounded after a Eurostat study published on Monday (15 January) found that … Year-on-year industrial output was also down 5.8% in November after declining by 5.4% in October.

“We are facing a very worrying situation,” European Trade Union Confederation Confederal Secretary Ludovic Voet told Euractiv. “

Judith Kirton-Darling, the acting joint general secretary of industriALL Europe, similarly told Euractiv that her organisation, which represents some seven million European workers, “has been raising the alarm about industrial decline and the threat of deindustrialisation in Europe for some time”…

“Deindustrialisation is a clear and present danger, especially for energy-intensive sectors vital to downstream ecosystems,” said Tobias Gehrke, a Senior Policy Fellow at the European Council on Foreign Relations…

Ben McWilliams, an energy policy analyst at Bruegel think tank, agreed that high energy prices bear most responsibility for Europe’s industrial decline.

(3) Sickest Economy In Europe: Green Policies Corrode Business, Germany’s Economy Plummets
By P Gosselin on 16. January 2024

Green policies causing energy shortages and price rises

The truth behind the country’s demise has much more to do with the government’s green policies, which are driving the prices of energy up and industries out of the country.

(4) Germany 'in permanent crisis mode' as two-year recession looms
Economy shrinks as country rocked by high rates and energy costs
Tim Wallace  15 January 2024

Germany’s economy shrank by 0.3pc last year after it was hit by higher interest rates and elevated energy costs, with economists warning that the industrial powerhouse faces a two-year recession.

Carsten Brzeski, an economist at ING, said Germany has been “in permanent crisis mode” ever since the pandemic, as it has suffered from an “energy crisis, surging inflation and tightening of monetary policy”.

Germany was the worst-performing major economy in the world last year
Financial Times (pay-walled) 

(5) Number of UK households failing to pay energy bills jumps by 39%
The Direct Debit failure rate in December 2023 increased by 15 per cent when compared to the previous year
Joe Middleton January 13, 2024

This was mostly driven by increases of 39 per cent in the “electricity and gas spending category and 20 per cent in the “mortgages” category, the Office for National Statistics (ONS) said.

At the beginning of the year Ofgem increased the energy price cap by 5 per cent from the previous £1,834 for a typical dual fuel household to £1,928. By comparison the energy cap was £1,277 per year in October 2021.

(6) Davos Devotees Deindustrialize Europe
In the name of green utopia, political leaders are quietly killing vital energy-intensive industries.
By Peter Huntsman  January 12, 2024 

According to a recent report from the think tank Agora Energiewende, German greenhouse-gas emissions dropped 20% in 2023 to their lowest levels in 75 years primarily due to a collapse in energy-intensive manufacturing….

To stop this Continental calamity, business and government leaders must redouble their focus on basic economics and science. It will mean European governments increasing their domestic extraction of fossil fuels and minerals, as well as the refinement of these elements into chemicals, steel and the products that power advanced economies.

(7) German Industry Shrinks for Sixth Month as Recession Looms
Industrial production declined 0.7%, economist est. 0.3% gain
Economy probably contracted in final quarter of 2023
By Sonja Wind 9 January 2024

Production declined 0.7% from October, led by capital goods, and intermediate goods, the statistics office said Tuesday. That’s the sixth consecutive drop and defies economists in a Bloomberg survey, who’d predicted a 0.3% increase.

See also:
Deindustrialization 21, UK update, Net zero religion, November 13, 2023
Deindustrialization 22, EVs impracticality, Energizing growth series, December 19, 2023
Deindustrialization 23, Germany economic decline, January 14, 2024.

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