Recession, crises, and protests Will the German economy continue to flounder in 2024?

The German economy is experiencing great turmoil, with the continued state of contraction it has been suffering since last year, in addition to the widespread protests that the country is suffering from and the political crises, which are hindering any recovery of that economy.

The German economy is experiencing a continuous recession, which accompanied it throughout the past year 2023. The expectations of government reports published by the German Ministry of Economy last August were fulfilled , stating that there would be no immediate and lasting recovery for the country’s economy, and that it would complete the year without achieving any growth.

While experts agree that the German economy will continue to contract during the year 2024, floundering between the widespread labor protests that are shaking the country, as well as the political crises that hinder any economic recovery efforts led by the ruling majority.

Continuous shrinkage!

According to what the German Ministry of Finance indicated last January, the current early indicators of the economy do not indicate a rapid economic recovery in Germany during the year 2024. This is after the wave of contraction that accompanied that economy throughout the past year.

In the last quarter of 2023, that is, from October to December, Germany's gross domestic product contracted by 0.3%, according to a report published by the German Federal Statistical Office, indicating that high inflation and fixed interest rates were the factors leading to the impact on the growth.

These results were consistent with the previous forecasts of the International Monetary Fund, late last July, which indicated that Germany’s gross product would continue to decline, and it was expected to decline by 0.3% during the year.

According to Kasten Brzeski, a financial expert and head of macroeconomic research at ING Financial Group, “At least during the first months of 2024, the many recent obstacles that have hindered the growth of (the German economy) will remain in place, and will, in some cases, have a stronger impact than It was in 2023.”

These obstacles are summarized, according to the same expert, "in the disruption of supply chains resulting from pandemic closures, the war in Ukraine, the energy crisis, high inflation, tightening monetary policy, and China's changing role, from a major importer of German products to a competitor that relies less on those products."

This is confirmed by Peter Bofinger, professor of economics at the University of Würzburg, saying: “The German economy suffers from structural problems, and what were previously considered strengths in the country’s business model have now become weaknesses.”

Boffinger adds, explaining that "Germany is more focused on exporting to other developed countries, and manufacturing represents a larger share of the economy, and the automotive sector has become highly dependent on China and has been slow to adapt to the growing demand for electric cars."

According to reports from the Federal Statistical Office, the manufacturing sector in Germany, excluding construction, witnessed a sharp decline of 2%, due to the decline in energy production and the high cost of the energy bill.

Crises and protests

In conjunction with this turbulent economic situation, Germany is floundering in a wave of widespread protests and political crises that are shaking its government. German farmers' protests have continued since January 8, in rejection of the government's decision to cancel the tax concessions that workers in the sector benefited from, including the support they were receiving on diesel supplies for agricultural machinery and the discount on the tax on those vehicles.

On Saturday, Frankfurt city police warned of "traffic disturbances around the airport" due to farmers' protests on the roads leading to it. Police estimates indicated that 400 tractors participated in the demonstration, while the Farmers' Association in the state of Hesse announced nearly a thousand agricultural machinery.

In addition to the farmers' protests, there is a massive strike led by transport workers in Germany. Transport workers in about 80 German cities and towns began a strike on Friday, according to the German News Agency.

This action comes a day after a strike by airport security employees at 11 German airports, and about a week after a strike by train drivers, which led to the suspension of the country's railway network for five days. According to the same agency, the demands of striking workers in various sectors revolve around raising wages and improving working conditions.

In the same context, the German government is experiencing repeated political crises and rifts, due to the debate over the 2024 budget. German Chancellor Olaf Scholz was forced to reduce public spending, after the Constitutional Court aborted his plan to borrow.

Among the austerity measures imposed by the Schulz government were those that farmers rejected. It came as part of the government’s effort to fill a financing gap of about $60 billion in the 2024 budget, which it had planned to allocate to finance a project to combat climate change and modernize the country. The Supreme Court ruling, issued in November, annulled this government financing plan .

Olaf Schulz acknowledged the confusion that his government was experiencing, and in his speech to the German press, he said that things would not go as planned, and that, as an advisor, he bore responsibility for the state of dissatisfaction prevailing within the government.

A Bloomberg report commented on these statements, saying that the German Chancellor has become skeptical and acknowledges the predicament in which his government is, and that "it will be difficult even for the professional optimist (Schulz) to ignore the problems facing his leadership."

Despite Schulz's success , on Saturday, in passing his budget plan for 2024 from Parliament. This budget, according to observers , will collide with popular rejection of it, and also threatens a new dilemma for the 2025 budget, with an estimated deficit between 13 and more than 20 billion euros.

"The Return of Wagner" How did Moscow exploit the Middle East crisis to encircle the West in Africa?

Taking advantage of the complex web of conflicts sweeping the Middle East as the Israeli aggression on Gaza continues, the Wagner Group is once again working in Africa. So what's the story? How did the group play a role in shaping the geopolitical dynamics of these regions?

As the drums of war continue to beat across the Middle East, and with clashes in multiple countries raising fears of a broader conflict, The Independent said that Russian Wagner Group mercenaries have begun returning to work again, but this time under the name “African Legion,” which appeared in A number of conflict areas in Africa.

According to the British newspaper, the Russian African Legion appeared with the Kremlin’s blessing eight months after the failure of Wagner’s march to Moscow, in reference to the failed coup attempt, which was followed two months by the incident of targeting the group’s senior leaders, most notably the group’s founder Yevgeny Prigozhin, by shooting down the plane they were traveling in. In retaliation for Vladimir Putin.

The new name of "Wagner", whose fighters exchanged the snow and cold of Ukraine for sand in Africa, is reminiscent of the German African Legion led by the famous commander Erwin Rommel, who participated in the important campaign against the British forces and their allied forces in Libya in World War II.

Return to the Ukrainian arena

It has been several months since Wagner mercenaries were last seen in battle in eastern Ukraine. After withdrawing from the front lines following the capture of Bakhmut, they staged a short-lived and chaotic mutiny against the Russian Ministry of Defense. Subsequently, they were exiled to Belarus, or were offered the opportunity to sign contracts with Moscow's army.

Then, just as things seemed to be settling down, they lost their ruthless leader, Yevgeny Prigozhin, in a plane crash.

Prigozhin's death at the end of August led to speculation about what would happen to the mercenaries, especially as Moscow moved to assume more supervision of their activities around the world. US officials said on numerous occasions after the mutiny that Wagner would no longer support combat operations in Ukraine.

But after a long hiatus, the Wagner Group mercenaries returned to the battlefield at the end of September, with about 500 fighters from Belarus assisting Russian combat operations around Bakhmut, according to the Ukrainian army, which added that these fighters appear to be among the best fighters in Russia’s ranks. But the threat remains low without their leader.

The Russian private military company, Wagner Group, has been active in more than 20 countries across the Middle East and Africa since early 2010, participating in counter-terrorism missions and providing security assistance.

While reports from the media, Russian media and open source intelligence indicate that after withdrawing a small number of Wagner fighters from Libya and the Central African Republic to fight in Ukraine - and after suffering heavy losses in Ukraine - Wagner is refocusing on Africa with the aim of compensating for its financial and human losses.

Repositioning

Israel's ongoing assault on Gaza for more than three months has led to fighting across land, air and sea across the region, with continuing carnage in Gaza and missile strikes and targeted assassinations in the Gulf, Yemen, Lebanon, Syria, Iraq, Iran and even Pakistan.

Moscow is also said to be exploiting anger in the Global South over the perceived failure of the West, especially the US and UK, to condemn Israel for what happened in Gaza, which has killed more than 27,000 people so far.

As the Middle East continues to become increasingly chaotic, the former Wagner Group is strengthening its presence in Libya and Sudan, part of a highly volatile region, in addition to strengthening its presence in African countries, as it replaces the departing Western forces.

Moscow is keen to take advantage of the opportunities presented by the crisis, taking advantage of the current instability, say Western officials who monitor Russian activities in North Africa and the Sahel region.

There is renewed focus on the expected Russian naval facility in Port Sudan on the Red Sea, where the Houthis are fighting US and British warships to protect an important global trade route. Wagner carried out preliminary work on the port project.

Former Wagner commanders have allegedly been spotted in Libya, and have recently arrived at Al-Khadim Air Base in the east, and in Sirte and Al-Jufra in the central region, areas controlled by Field Marshal Khalifa Haftar.

Russian African Legion

Russia's Deputy Defense Minister, Yunusbek Yevkurov, and Major General Andrei Avrianov of the Russian Military Intelligence Agency are playing key roles in the Kremlin's new campaign in Africa. The two men traveled to Libya to meet Haftar in Benghazi, and also visited the Central African Republic, Burkina Faso, Mali, and Niger.

The announcement of the formation of the African Corps, to succeed Wagner, originally came from Russian military bloggers close to the Ministry of Defense in Moscow.

The Corps seeks to take over the role of Wagner, which had a keen interest in Africa in providing security to powerful regimes and rulers in exchange for payments, often in the form of lucrative mining rights.

In posts on the Telegram app, the African Legion offered a “recruitment opportunity” to potential recruits who showed up in Africa as countries moved away from the West. Among the examples provided are the withdrawal of French forces from Mali and Niger.

The recruitment campaign promised high salaries, paid in foreign currencies when necessary, competent and professional command and control, and medical care and social benefits, including generous compensation to the families of combatants who were injured or died while on active duty.