Germany is currently experiencing a labor shortage, which is adversely affecting their Gross Domestic Product. If current trends continue in Germany the country could find itself in a serious recession. This would not only effect Germany but all of Europe as well for Germany is the single most important trading partner for almost all of the European countries (Bogdanowicz). This is not a new situation in Germany, for the past seven consecutive quarters activity in the construction sector of the German economy has declined (German GDP). Not only did German industrial output fall, but this was also the lowest annual increase in Gross Domestic Product since the first quarter of 1997, when the Gross Domestic Product increased by 0.1 per cent. According to Berlin’s finance ministry, "Growth has come to a standstill. GDP figures show without a doubt that the risks to the economy have not grown any smaller." (Scally). Without drastic measures taken by the government Germany could find itself a victim of an economic recession.
The German government controls the flow of money in a country as well as various global trade programs. There are various political maneuvers a country can do in attempts to prevent a recession. However despite the decline of Germany’s Gross Domestic Product, the country’s political leaders are denying the beginning of a recession. Instead Federal Labour Office President Bernhard Jogoda claims, “We have a slowing economic growth - that's a big difference." (German Finance Ministry). German economist predict by the end of the year the economic momentum will accelerate considerably. Germany stands a chance of averaging 2% Gross Domestic Product growth this year, which is similar to the government's official forecasts (Bundesbank Rules). If a country ignored the evidence and denies a problem they cannot effectively handle the situation for it will not go away on its own.
Regardless of the government’s denial of a recession, there are several possible causes of the current economic situation in Germany such as the lack of skilled labor as well as a decline in trade. Due to the global economic downturn the German Finance Ministry blames the decline in global exports as a contributing factor to the unfortunate situation of the economy (German Finance). This lack of trading has led to the careful attitude of German investors as confidence in German business has declined for the fifth month in a row (Bogdanowicz).
The most probable origin of this state of economic affairs is the serious deficiency of German skilled workforce. The country’s birth rate is among the lowest in Europe. The German population is expected to fall from 82 million to less than 60 million people over the next fifty years and the workforce will be nearly cut in half (Germany Pressed). Interior Minister Otto Schily, “We must recognize that to secure our prosperity, out future, we are dependant on people from other countries...