Consequences for the economy
IW boss: AfD plans would cost 2.2 million jobs
January 28, 2024, 6:39 p.m
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The AfD’s economic plans are ringing alarm bells among economists. According to IW boss Michael Hüther, it would not only be exports that would suffer if we left the EU. An associated loss of growth would also have fatal effects on the labor market.
According to economists’ calculations, implementing the AfD’s economic policy plans would cost Germany dearly. A withdrawal from the European Union (“Dexit”), for example, would cause the export-oriented German economy to grow by an estimated six percent less within a few years, said the director of the employer-oriented Institute of the German Economy Cologne (IW), Michael Hüther, to the “Süddeutsche Zeitung” . He referred to experiences with the British exit from the EU (“Brexit”).
In ten to 15 years the minus would even be ten percent. “We are talking about a loss of 400 to 500 billion euros,” said Hüther. “That would be thousands of euros in lost wealth per capita.” No other nation has gained as much in exports through the EU internal market as Germany.
If the Federal Republic were to leave the EU, it would have to cope with significantly worse trading conditions than before. The monetary union also eliminated the previous exchange rate risk, which was very burdensome. “If we assume a growth loss of five percent in Germany, that would be 2.2 million fewer jobs,” said Hüther.
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, told the newspaper that the AfD’s planned curtailment of tenant protection would lead to higher rents. The party’s rejection of higher minimum wages would in turn result in lower income in real terms. This means that more people would be dependent on government support.
“The AfD plans would ultimately lead to more social spending,” said Fratzscher. AfD co-leader Alice Weidel recently described Great Britain’s departure from the EU as “absolutely right”. If EU reform in the spirit of the AfD is not possible, Germany should consider leaving.