What Germans really need to do is work harder, according to Deutsche Bank CEO Christian Sewing.
“Let’s just go back to working as hard as the EU average,” he said at a Frankfurt conference on Wednesday, addressing the country’s current economic woes, Bloomberg reported.
Germany’s largest company, Volkswagen, has dominated the headlines this week after it said it was considering its first-ever factory closures. Separately, Intel, the American tech company, said it was rethinking its new German factory worth $32 billion.
These events are the aftereffect of years of sluggish economic growth, shrinking industrial orders, and historical underinvestment. Adding to the existing tensions, the country might also see political change on the horizon, with the far-right party Alternative for Germany gaining ground in regional elections.
Sewing is right to point out the disparity in EU and German working hours. Official data from 2023 suggest that the bloc’s average weekly work time is 36.1 hours, while Germany’s is only 34 hours.
Other European countries exceed the regional average, such as Greece, where the workweek lasts 39.8 hours. Workers at Germany’s industrial competitor, the U.S., labor for 36.4 hours on average—closer to the EU average.
Sewing has led the German banking giant since 2018 and has urged policy-level changes in the past to prevent the country from becoming known as “the sick man of Europe.” Now, he says, investors are beginning to question the country’s ability to fight back.
“Investors have been telling us for more than a year that they doubt Germany’s and Europe’s ability to perform, and even worse, the will to perform,” Sewing said. “We simply have to tell our fellow citizens that we have to do more again.”
Representatives at Deutsche Bank didn’t immediately return Fortune’s request for comment.
Sewing’s comments come just months after the Norwegian sovereign wealth fund chief, Nicolai Tangen, pointed out that Americans worked harder and were more ambitious than Europeans. While it’s challenging to link working hours to GDP growth, they contribute to economic output and feed into worries about Europe losing its competitiveness with the U.S.
Why is Germany facing a crisis?
Things weren’t always this way. During Germany’s golden days, it was an industrial powerhouse and the engine driving the EU’s growth. Its manufacturing heft could have given any other major economy a run for its money. Germany is also home to some of the biggest companies in the region, such as BMW, Volkswagen, and Siemens.
But its economy has limped through a string of crises in recent years. An energy crisis spurred by Russia’s invasion of Ukraine has caused prices to spike, while high interest rates have held back construction activity and hurt local spending power. Germany’s largest trade partner, China, hasn’t rebounded from COVID-19 as hoped, contributing to its economic plateau and sparking concerns of “deindustrialization.”
Other factors that have worsened Germany’s condition include stagnant labor productivity, an aging workforce, and government red tape.
The country has also inadvertently fallen behind China in the car-making race it was once leading. Its key automakers initially remained tepid but eventually announced big plans to expand into electric vehicles. They have since retracted those ambitions.
Germany has had a few rude awakenings. For instance, its chemicals behemoth BASF turned to China to make a whopping $10 billion investment in a new facility instead of staying home. One of the concerns the company’s then-CEO Martin Brudermüller cited earlier was that “profitability is no longer anywhere near where it should be.” The company also cut thousands of jobs.
An inevitable storm is brewing, but Germany needs to capitalize on its strengths to pull itself out of the bind. It helps that some key economic factors, such as unemployment, are at bay. But there’s a long way to go—and if Sewing’s assessment is accurate, maybe it starts with Germans working harder.
“Undoubtedly, Germany’s economic contribution is vital to the EU, especially as Europe seeks to quell concerns around weaker growth,” Capital Group economist Robert Lind wrote in a note earlier this year.
