nation whose economy is expected to contract in 2023. our experts see this as the outcome of two developments in particular : the at times very high energy prices caused by the russian war against ukraine and a currently weak global economy. 1 / 3 bis - central bankers'speeches the bout of weakness in the german economy is not, then, primarily structural, as is being suggested by the debate on potential deindustrialisation. this, in turn, is consistent with most forecasts for germany for 2024, which are already predicting a recovery in economic activity. therefore, i cannot agree with the " sick man " diagnosis. 2 challenges to and opportunities for the german economy however, germany and its firms face major challenges – of that, there is no doubt. we discussed this in an article in the september issue of the bundesbank's monthly report. [ 1 ] i would like to briefly address two of the key challenges. for one thing, there is the decarbonisation of the economy. climate change is advancing rapidly and affecting all of humanity. for another, the high electricity and gas prices are continuing to show us in no uncertain terms how heavily we still rely on fossil fuels. transitioning away from oil, gas and coal and expanding renewable energy will therefore not only be good for the climate, but will also make us more independent and may potentially lead to lower electricity prices again in germany over the long term. however, another thing is clear as well : the era of at times very low energy costs is over for now. that's something that all consumers of electricity – be they big or small – will have to get used to. some parts of industry, claiming that they are at an acute competitive disadvantage to their foreign rivals, are calling for a rapid artificial reduction in the price of electricity for some firms. in my view, however, this will only delay the inevitable structural change. transitioning towards net zero means comprehensively restructuring our economy : prominent examples include energy generation, networks, new storage capabilities, heating technology and transport. all of these will require extensive investment : in new equipment, but also in research and development, in order to use energy efficiently. policymakers can play a supportive role in this regard : reliable and consistent climate policymaking will create planning certainty on the path to carbon neutrality by 2045. at the same time, government approval processes and judicial review procedures need to be sped up. at the european level, germany should campaign for further progress to be made

##ptive fate : why bother fighting if everything is going down the drain anyway? the other is to pull yourself together and ask : how can i get into the right kind of shape to face future challenges? there is certainly no doubt that action is preferable to resignation. even if i do not share the diagnosis of being the " sick man " of europe, it is a wake - up call. and it is launching a societal debate – including the one that's happening right here and right now. german industry and our society can adapt to a changing environment. this is something they have proven time and again. the staking out of clear and reliable political framework conditions can be supportive of this. i am sure that the current debate will help make our country stronger and fitter for the future. in my opinion, germany is healthy. but it faces challenges. footnote : 1. see deutsche bundesbank ( 2023 ), germany as a business location : selected aspects of current dependencies and medium - term challenges, monthly report, september, pp. 15 - 35. 3 / 3 bis - central bankers'speeches