Germany's manufacturing sector is showing signs of recovery, with industrial production increasing by 1.2% in October. This positive development indicates that Germany's economic downturn is easing [1f378186]. On the other hand, France continues to struggle, as its industrial production fell by 0.8% in the same month [1f378186]. Germany's recovery is attributed to strong exports, particularly to the United States and China, while France is facing challenges due to weak domestic demand and ongoing strikes [1f378186]. The diverging economic performance of Germany and France has implications for the broader Eurozone economy. Germany's recovery could help boost the overall Eurozone growth, while France's struggles may weigh it down [1f378186]. Germany's manufacturing sector has shown signs of stabilization in the past as well, despite challenges such as a global economic slowdown, higher interest rates, and waning demand for goods and services [2a5a8c90]. The country's long-term potential growth will depend on how it addresses its structural challenges, including an aging workforce and dependence on China [2a5a8c90].
France has attracted more than twice as much FDI as Germany in the past two years. France's economy has demonstrated resilience during the Covid-19 pandemic and the 2022 energy crisis, while Germany is struggling due to a severe political crisis. The French presidential system allows for quick implementation of reforms, while Germany is grappling with political gridlock. Germany's economic model relies heavily on exports, while France is catching up to Germany's economic boom in the 2010s. Both countries have pursued protectionist economic agendas and have robust social-welfare systems in need of reform. The escalating geopolitical rivalry between the US and China threatens both countries. France and Germany should work together to strengthen the EU and focus on their similarities rather than differences. Macron should not abandon his ambitions to reform Europe. Both governments should bolster the EU's single market, complete the banking union, pursue capital-market union, develop a joint industrial policy, and streamline regulation and bureaucracy. [22bcd035]