This is where the countries most dependent on German industry are located, which is now slowing down and putting everyone in difficulty.
The economies of Eastern European countries – such as Hungary, Romania, Poland, the Czech Republic and Slovakia – are starting to show signs of slowing down due to the German economic crisis
Germany is the most important trading partner for more than half of the member countries, with which it has integrated its industry and shared processes, raw materials and workers, and Eastern European countries are among the most exposed.
These countries have a relatively recent economic development, achieved largely after joining the European Union, which gave them access to the common market and significant benefits: above all, it made them become destinations for large amounts of foreign investment by those companies that were looking for places with low-cost labour where they could open new offices and transfer certain activities, especially industrial and largely German. Now industrial production is falling and the Gross Domestic Product, the best estimate for observing the general trend of the economy, has lost the momentum it had in recent years, when these countries grew a lot.
This has happened especially in the car sector, with large European companies building factories to transfer less specialised processes. Today, the car sector accounts for about 15 percent of GDP in the Czech Republic, Slovenia, and Hungary. A special case is Slovakia, where the share is close to a third: it is the country that produces the most cars in the world in relation to its population. Volkswagen and Stellantis, among others, have large plants in Eastern Europe, but these regions have now also become interesting for large Chinese car companies, which are looking for producers close to the European market also with the aim of circumventing the duties imposed by the European Union on electric cars from China.
The most recent estimates from the European Commission show a decline in economic growth in these countries already in 2024, while it should increase again next year. Growth rates, compared to those of larger countries, are still good: in 2024, Poland will grow by 3 percent, Slovakia by 2.2, Romania by 1.4, the Czech Republic by 1. Hungary is the worst performer, growing by 0.6 percent.