Germans have been branded the "world champions of sick leave" by an industry boss in a blunt assessment amid predictions the country is on the brink of a damaging winter recession.
Oliver Bate, Chief Executive Officer of Allianz SE, did not hold back in an interview with German media in which he pointed out that German workers take an average of 20 sick days annually - significantly more than the European Union average of eight days.
Mr Bate, speaking to Handelsblatt, declared: "Germany is now the world champion in sick leave.
“If we were only to reduce expenditure to the EU average [3.5%], we would save €40 billion, which could help the health system in another area."
He attributed the elevated rates of absenteeism partly to recent surges in colds and COVID-19 and expressed concern over the economic ramifications, warning that employers bear substantial costs due to these absences.
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In 2023, employers paid ￡58.6 billion (€77 billion) in wages during health-related absences, with health insurers contributing an additional ￡15.9 billion (€19 billion). The combined expenditure accounted for 6% of Germany's national social spending.
Bate proposed reinstating a policy, scrapped in 1970, requiring employees to present a doctor's note to receive pay for the first day of sick leave.
His suggestion was backed by some business leaders, including Ola Kallenius, head of Mercedes, who acknowledged the economic impact of Germany's high sick-leave rate.
However, the suggestion faced strong opposition from trade unions and political figures, with critics arguing that such a policy could foster a culture of mistrust and might exacerbate health issues by discouraging genuinely ill employees from taking necessary leave.
Hans-Jurgen Urban, a board member of the engineering union IG Metall, contended that improving working conditions would be a more effective approach to enhancing economic performance.
Germany's economic challenges further complicate this debate. The country was the only G7 economy to contract in 2023, and the International Monetary Fund projected zero growth for 2024, positioning Germany as the worst-performing economy among the G7 nations.
Car giants including Volkswagen and Mercedes, have announced job cuts, intensifying concerns about economic stability.
Germany, traditionally the economic powerhouse of the European Union, has faced increasing pressure in recent years due to a combination of cyclical and structural challenges. In 2024, the German economy contracted by 0.1%, with only modest growth of 0.7% projected for 2025 and 1.3% for 2026.
Additionally, the country is grappling with structural issues such as an aging population, underinvestment, and excessive bureaucracy, which hinder productivity and economic growth.
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Chancellor Olaf Scholz - currently gearing for elections after losing a confidence vote - has acknowledged these economic challenges, stating: "Germany needs a fundamentally different policy, especially in terms of migration policy, foreign security and European policy and economic."
Consequently, Germany is facing the prospect of a winter recession as recent economic indicators show a deepening manufacturing crisis. In November 2024, industrial orders fell by 5.4% month-on-month, contrary to analysts' predictions of no change, with foreign orders decreasing by 10.8%.
Retail sales also declined by 0.6% during the same period, unexpectedly underperforming despite anticipated boosts from pre-holiday promotions.
Such signs of weakness imply minimal growth in the euro zone during the last quarter of 2024, with Germany potentially experiencing negative growth again. High energy costs, following Russia's invasion of Ukraine, have particularly impacted the industrial sector.
Economists from Oxford Economics and ING note the lack of positive prospects, with private consumption also unlikely to help the recovery as households are saving more to rebuild wealth due to high inflation.