Recently, the European economy is suffering from new shocks: shrinking trade and massive unemployment.The economic crisis has brought new victims in European countries, highlighting the problems faced by exports and new energy industries.

German exports decline, industrial giants cut spending

According to the latest data released by the German Federal Bureau of Statistics (Destatis), in August 2024, Germany’s total exports to non-EU countries fell by 1.1 percent from the previous month to €58.5 billion. The United States once again consolidated its position as Germany’s most important trading partner, importing German goods and services worth €12.6 billion.

Although German automakers are re-evaluating their production and investment plans after the decline in the number of new cars registered, other German industrial giants are also starting to take measures to counter the economic downturn. Denis Grene, the new CEO of the German metallurgical giant ThyssenKrupp Steel, said plans for a massive restructuring of the company. In an interview with the West German Journal, he said: “We need to cut spending significantly and we must increase profitability.” Green stressed that the current market situation “has worsened again in recent months and unfortunately there is no sign of recovery.” A new industrial plan is being developed, which includes unprecedented cuts to the company.

France’s economy slows, shutdowns increase

In the first half of 2024, France announced the closure of 61 companies with more than 10 employees, an increase of 9% compared to the same period in 2023. In the same period, there were 79 newly established companies and an industrial land ratio decreased by 4%. While the net growth figure remains positive (the number of newly opened is 18 more than the number of closed ones), this figure has shrunk by 30% compared to the same period, showing a decline in economic vitality.

Swedish Economic Fortress Broke, New Energy Companies Cut Employees

Sweden, once regarded as a stronghold for economic prosperity, also fell down in the crisis. Due to an unprecedented shrinking in electric vehicle sales, Swedish battery manufacturer Northvolt announced that it would cut 1,600 jobs in Sweden. Among them, the Skellefte? plant will lose about 1,000 jobs, V?ster?s will cut 400 jobs, and Stockholm will cut 200 jobs. According to Swedish media reports, this cut represents 25 percent of Northvolt’s workforce in the Scandinavian nation.

The European economy faces multiple challenges

The decline in exports and job cuts in major European economies reflect serious challenges facing the European economy as a whole.The uncertainty of the global trade environment, the volatility of energy prices and the development of new energy industries have all impacted the European economy.

Germany, as the largest economy in Europe, has seen its decline in exports affecting the economic growth of the EU as a whole. The automotive industry, as a pillar industry in Germany, is affected by the decline in new car registrations and companies are forced to adjust production and investment plans. At the same time, industrial giants have announced cuts in spending and job cuts, showing concerns about the future market prospects.

The increase in the number of closures of enterprises and the decrease in industrial land use indicate a decline in economic dynamics.Though the number of newly established companies still exceeds the number of closures, the large contraction in the number of net increases shows a lack of economic growth momentum.

Swedish new energy companies should have benefited from the global shift to renewable energy, but Northvolt’s massive cuts reflect the shrinking demand in the electric vehicle market and the challenges facing the new energy industry.

Expert Opinions and Future Prospects

Economists point out that the current difficulty facing the European economy is the result of a combination of multiple factors: global trade tensions, rising energy prices, inflationary pressures and a slowdown in post-epidemic economic recovery have all had a negative impact on European economies.

To address these challenges, European governments and enterprises need to take positive action.Strengthening the dynamics of the internal market, driving innovation and technological upgrades, and finding new growth points may be the key to getting out of the current trouble.At the same time, Europe needs to look for new opportunities for cooperation in the global economy, stabilize trade relations and promote sustainable economic development.

Overall, the European economy is experiencing a difficult period. The decline in exports and the problems of new energy industries highlight the need for structural adjustments. In the future, how to maintain stable growth in the context of global economic volatility will be a major issue facing Europe.