Deutsche Bank CEO Warns of Looming Economic Challenges for Germany

Deutsche Bank CEO Christian Sewing issued a dire warning for Germany's economic future at the Handelsblatt Banking Summit 2023 on Wednesday.

by Faruk Imamovic
SHARE
Deutsche Bank CEO Warns of Looming Economic Challenges for Germany
© Getty Images News/Pool

Deutsche Bank CEO Christian Sewing issued a dire warning for Germany's economic future at the Handelsblatt Banking Summit 2023 on Wednesday. "We are not the sick man of Europe," Sewing asserted, "but there are structural weaknesses holding back our economy and preventing it from developing its great potential." His comments resonated with a palpable urgency, sending a clear message to banks and policy-makers: Address the underlying issues now, or risk Germany becoming the "sick man of Europe."

Banks at the Forefront of Change

According to Sewing, the banks have a crucial role to play in ameliorating the current macroeconomic challenges facing Germany. "We are more in demand than ever as risk managers and advisors.

This is a great responsibility, but also a great opportunity to create new trust," Sewing said. He conceded that German financial institutions are lagging behind their international counterparts. While he acknowledged that the special economic situation influenced by interest rates may disguise this to some extent, he emphasized the importance of catching up. "We must not deceive ourselves: we are still lagging behind our international competitors," Sewing admitted.

Structural Weaknesses Exposed

Sewing didn't shy away from outlining the contributing factors to Germany's faltering economic condition. He identified high and unpredictable energy prices, slow internet connectivity, an outdated railway network, a lag in digitization, a dearth of qualified workers, and excessive bureaucracy as significant challenges.

He argued that these structural deficiencies pose a real threat to Germany's status in Europe and could eventually paint the nation as the continent's "sick man." Peter Oppenheimer, Chief Global Equity Strategist and Head of Macro Research EMEA at Goldman Sachs, echoed Sewing's sentiment, albeit with a global context. "The predicament that the economy is facing at the moment is really down to a number of factors," Oppenheimer told CNBC on Tuesday.

These factors include challenges in the manufacturing sector, a disappointing boost from China's reopening, and escalating energy costs. Oppenheimer clarified that Germany's recession is "not deep," but nevertheless cautioned that the country is grappling with "obvious headwinds."

A Call to Action

As Germany confronts a myriad of challenges, Sewing's admonitions serve as a wake-up call.

His impassioned plea at the Handelsblatt Banking Summit points toward a critical juncture for the German economy, signaling that the time for complacency has passed. Sewing believes that by tackling these challenges head-on, especially the banks, Germany can turn its fortune around.

Deutsche Bank Germany
SHARE