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What is at stake for Germany's economy if the world breaks up into blocs


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„In the event of a possible reorganisation of world trade as a result of the Russian war of aggression, Germany is threatened with the loss of important markets.“
Dr Michael Böhmer, Chief Economist

The German economy is strongly intertwined with the global economy. But instead of global interdependencies, regional trade blocks could determine world trade in the future. Our brief analysis shows what a deglobalised world economy means for the German economy. 

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Regionalisation instead of globalisation

For some time now, the end of globalisation as we have known it has been looming. In the wake of the Russian war of aggression, there is a growing risk that the world economy will disintegrate into different regional trading blocs - with strong economic exchange within, but significantly fewer intensive relations between the regions.

For Germany, which is strongly globally interconnected, such an end to globalisation would have far-reaching consequences. A new brief analysis shows how dependent Germany is on individual regions of the world in various economic categories. In order to establish dependencies, a team led by Prognos Chief Economist Michael Böhmer divided the world's regions into blocs based on geographical and geopolitical characteristics, as they could emerge in view of the Russian war of aggression on Ukraine.

The results provide information on the economic consequences for Germany of the formation of a bloc and an end to the global economic interdependencies that have developed over decades. Among other things, foreign trade, the associated employment in Germany, the dependence on raw materials, but also the international research cooperations were examined.

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The results of the brief analysis were first published in Handelsblatt on 6.5.2022.

A short conclusion was added to the analysis for download (PDF) on 9 May.

To the Handelsblatt report (€, in german)

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Dr Michael Böhmer

Chief Economist, Head of Corporate Solutions

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