(Last update Sep. 2025)
Since 2019, Germany has experienced a significant decline in its industrial growth potential, losing approximately 20%. This downturn stems from a series of strategic missteps made in the 21st century, including overreliance on Russian energy, underfunding critical infrastructure, avoiding deficit-financed budgets, and underestimating China’s ability to leverage partnerships to boost its own manufacturing. Additional challenges include phasing out nuclear power, heavy dependence on export-driven growth, bureaucratic inefficiencies, lack of modernization, failure to address an aging population, and the strain on social systems caused by high levels of migration.
Why is Germany’s economy so important? As the economic powerhouse of Europe, Germany’s performance directly impacts the entire continent, including peripheral regions such as Russia and Ukraine. If Germany struggles, the ripple effects will be felt across Europe.
Key Takeaways:
Germany, once the economic powerhouse of Europe, faces a profound economic and social crisis. Since 2019, its industrial growth potential has plummeted by 20%, driven by decades of policy missteps, including:
Overreliance on Russian energy.
Phasing out nuclear power without adequate alternatives.
Insufficient investment in critical infrastructure and modernization.
Heavy dependence on exports and underestimating China’s rise as a manufacturing competitor.
Compounding these challenges are demographic issues like an aging population, bureaucratic inefficiencies, and social strains from high migration levels.
Broader Impacts
Germany’s economic woes have significant ripple effects across Europe, particularly in peripheral regions like Russia and Ukraine. As Germany falters, the Eurozone risks prolonged stagnation.
Evidence of Decline
- Industrial Downturn: Major companies, including Deutsche Bahn, ZF, and Continental, are cutting thousands of jobs. Small and medium enterprises are quietly downsizing.
- Energy Crisis: Germany’s energy costs are soaring, with businesses and households paying exorbitant prices compared to other countries. Despite $1 trillion invested in renewable energy, the country relies heavily on imports and faces instability in supply.
- Social Unrest: Over 40% of Germans cite financial struggles as their primary concern, overshadowing issues like Ukraine and climate change. Public trust in political leadership is eroding, with dissatisfaction fueling systemic critiques.
Global Dynamics
Germany lags behind other advanced economies, including the U.S., which has grown by 11% in real terms since late 2019. Trade policies, particularly the prospect of U.S. tariffs under a returning Trump administration, further threaten Germany’s economic stability.
A Glimmer of Activity: Defense Sector
While most industries falter, Germany’s defense production is ramping up, highlighting a paradox in resource allocation amid broader economic decline.
The Outlook
Germany’s systemic issues—rooted in policy choices from over a decade ago—paint a grim picture. As the nation grapples with stagnation and industrial decline, its ability to recover and lead Europe appears increasingly uncertain. The rise of far-right extremism incl. AfD only deepens the urgency for bold and inclusive solutions.
Other perspective - in the 1980s, the EU and US share of global GDP was about the same…
The ripple effect: There have been 33 major corporate debt defaults in Europe this year, far surpassing the Global Financial Crisis and falling just short of the number seen in 2020 due to Covid.
Job Cuts in German Companies Reach Alarming Levels. Major German companies like Deutsche Bahn (30,000), ZF (14,000), and Continental (13,000) are planning significant workforce reductions. SAP (5,300) and Bosch (3,760) have also announced substantial layoffs. These examples are just the tip of the iceberg, as thousands of small and medium-sized enterprises are also downsizing - often without drawing much public attention.
Sources:
Full list of job cuts: https://files.insm.de/uploads/2024/09/20241128_Produktionsrueckgang-und-Verlagerung.pdf
Germany’s leadership is losing the public as the economy collapses into crisis. Over 40% of Germans now rank financial struggles as their top concern, dwarfing issues like Ukraine and climate change. Meanwhile, government-aligned media bombards viewers with narratives about global responsibility, climate goals, and solidarity with Ukraine, distracting from skyrocketing prices and declining wages. The disconnect between propaganda and reality is fueling public outrage, deepening distrust, and pushing the nation toward political and social upheaval.
The structural, regulatory, and economic advantages of the United States position its equity markets for sustained outperformance. The U.S.’s innovation-driven economy, robust venture capital ecosystem, and favorable demographic trends create a resilient foundation for growth. In contrast, Europe’s reliance on traditional industries, fragmented regulations, and demographic challenges constrain its market potential.
Why U.S. Equities Will Outperform European Markets in the Coming Years:
The structural, regulatory, and economic advantages of the United States position its equity markets for sustained outperformance. The U.S.’s innovation-driven economy, robust venture capital ecosystem, and favorable demographic trends create a resilient foundation for growth. In contrast, Europe’s reliance on traditional industries, fragmented regulations, and demographic challenges constrain its market potential.
While Europe’s path to parity will require significant reforms and investment, the United States remains the clear choice for investors seeking growth and resilience. As the global economic landscape continues to shift, the divergence between U.S. and European equities underscores the critical importance of innovation, strategic investment, and supportive policy environments.
Germany stands to lose the most from US tariffs, with a projected GDP drop that outpaces other major economies in the Eurozone, spotlighting its susceptibility to trade wars.
Source: GS, Link: https://www.goldmansachs.com/images/insights/2025-outlooks/Euro-Area-Outlook-2025-Under-Pressure.pdf
Germany — is everything lost irrevocably? Since the 4th quarter of 2019, the US economy has grown by 11% in real terms, the Eurozone by 5%, while Germany's GDP has remained at the same level over the last five years.
Following 5 years of stagnation, Germany’s economy is now 5% smaller than it would have been if the pre-pandemic growth trend had been maintained. Germany is probably reaching a point of no return. Business leaders know it, the people in the country feel it, but politicians haven’t come up with answers.
Germany Is Unraveling Just When Europe Needs It Most.
Why get excited about Germany's increased NATO spending? It's like applauding for more fuel when the house is already on fire. We need to think bigger - like, how about investing in not having to fight at all? That's the kind of disruptive thinking we need. Peace is the real innovation we should invest in.
German industry is sinking into crisis - except for one sector: defense. Germany’s weapons and ammunition production is ramping up.
Source of chart:
"We Are Facing a Systemic Collapse," Warns the German Chemical Industry Federation. This month, the price of one megawatt-hour in Germany reached €936 – a level of turmoil not seen even in 2022.
The crisis hasn't directly impacted citizens yet, as contracts are locked in a year in advance. However, even now, Germans are paying €400 per megawatt. In comparison, the average price in Russia is around €45 per megawatt.
Germany is preparing for potential long-term power outages as the share of renewable energy sources in the country drops to zero. Despite spending $1 trillion on energy modernization, the country is unable to provide a stable energy supply for its industry and is forced to import electricity, with prices spiking whenever the wind stops.
Sources: Oxford Economics, Bloomberg and https://www.theaustralian.com.au/subscribe/news/1/?sourceCode=TAWEB_WRE170_a_GGL&dest=https%3A%2F%2Fwww.theaustralian.com.au%2Fcommentary%2Fthe-german-chancellors-nightmare-revisited%2Fnews-story%2F4ee6703ece4c59cf89d97e78ec7855c2&memtype=anonymous&mode=premium&v21=GROUPA-Segment-1-NOSCORE&V21spcbehaviour=append
🪫 🇳🇴 “It’s an absolutely sh*t situation”: Norway’s Energy Minister Reacts to the Country’s Electricity Prices
🇩🇪 🪫 🇸🇪 “Frustration with Germany”: Sweden Echoes Norway’s Concerns Over Rising Electricity Prices 🇩🇪
1. Norway
Norwegian Energy Minister Terje Aasland, quoted by the Financial Times, described the situation as “an absolutely sh*t situation.”
As a result, Norwegian authorities are considering abandoning the construction of a power transmission line to Denmark. Additionally, there have been calls to reassess electricity supply agreements with the UK and Germany. The reason behind these moves is the high cost of electricity, which could rise even further due to low wind activity in the North Sea, pushing prices to their highest levels since 2009.
In Norway, some critics argue that the country should only export electricity after ensuring low domestic prices. This stance has raised concerns within the EU.“
This is a turning point for EU-Norway relations. Reducing electricity supplies to Europe will not be received positively,” said an EU ambassador in Oslo.
The sharp increase in electricity prices during recent winters has caused political upheaval in Norway. Polls predict that right-of-center parties, who aim to reduce Norway’s exposure to European electricity prices by renegotiating agreements with certain European partners, may come to power in the next election.
2. Sweden
“Frustration with Germany”: Sweden Echoes Norway’s Concerns Over Rising Electricity Prices
Sweden joined in expressing similar concerns. Deputy Prime Minister and Energy Minister Ebba Busch criticized Germany’s decision to decommission its nuclear power plants, stating that this move has significantly contributed to soaring electricity prices in Sweden.
Southern Sweden is currently facing record-high electricity costs due to power being transmitted to Germany via underwater cables. Despite these challenges, Sweden is unable to halt electricity exports due to EU regulations.
Sources:
Germany’s industrial growth began lagging behind the EU average as early as 2015, well before the challenges escalated in 2022. This indicates that the issue stems from systemic errors made over a decade ago.
Challenges Ahead for German Industry Amid Trump’s Return to Power
The Economist presents a sobering outlook for Germany’s industrial sector in light of Donald Trump’s return to the White House.
Since the onset of the Ukraine conflict, German businesses have been grappling with several significant challenges: surging energy costs, weakening demand from China, intensified global competition, labor unrest, and a government perceived as ineffective and soon to be replaced.
The stock performance of German companies reflects these difficulties, with shares rising only 2% since early 2022, compared to a 16% average increase across other advanced economies. Now, The Economist notes, German firms are increasingly concerned about the implications of Trump’s re-election.
As the United States is Germany’s largest export market, the stakes are substantial. In 2023, Germany exported $160 billion worth of goods to the U.S. while importing $77 billion. Only China, Mexico, and Vietnam enjoy a greater trade surplus with the U.S., placing German exporters at heightened risk under Trump’s protectionist policies.
Research from the Munich-based Ifo Institute indicates that German exports to the U.S. could decline by as much as 15% if Trump implements his proposed 10–20% tariff on all imports.
In response to these risks, German companies have ramped up their investments in the U.S. Over the past year, they announced nearly $16 billion in U.S.-based projects—almost double the prior year’s amount. These investments accounted for 15% of all foreign investments by German firms in 2023, up from 6% in 2022, reflecting a strategic shift to mitigate potential trade disruptions.
Germany Rules Out Nuclear Energy Revival
Germany’s leading energy companies, EON SE and RWE AG, have rejected proposals to restart decommissioned nuclear power plants, positioning the energy debate as a central issue ahead of February’s elections.
The nation’s last nuclear reactors were shut down in April 2023, following a policy decision made 12 years earlier by former Chancellor Angela Merkel in response to the Fukushima disaster. However, the opposition Christian Democratic Union (CDU) has recently questioned the move, particularly as Germany phases out coal and delays plans for new gas-fired power stations. In a policy paper released last week, the CDU called for a reassessment of nuclear energy’s role.
Executives from RWE and EON have stated that reopening the plants is “highly improbable” due to
1. regulatory barriers,
2. a shortage of skilled workers, and
3. concerns about the economic sustainability of nuclear energy.
RWE’s CEO further highlighted that nuclear power and renewable energy are not a strong match, as the increasing share of renewables diminishes the profitability of nuclear power plants.
It is commonly believed that the European Union began to lag behind America only with the start of the war in Ukraine in 2022. However, looking at the stock market of the two macroregions, we see that Europe's lagging began immediately after the financial crisis of 2008.
During the period from 2009 to 2023, the S&P 500 Index grew five times more compared to Euro Stoxx. The financial sector of Europe is hindering economic growth due to the inability to inject sufficient capital and liquidity into European companies. In simpler terms, Europe not only prints fewer money compared to the U.S. but also spends it "incorrectly" (from the perspective of America's economic principles) - on social welfare and pensions instead of injecting money into businesses.
The €650 Billion Exodus at the Heart of Germany's Political Turmoil.
“Germany won’t collapse overnight. That’s what makes this scenario so absolutely harrowing,” states the Future Today Institute, which advises German companies on strategy. “It’s a very slow, protracted decline—not just of companies or cities, but the entire country, pulling Europe down with it.”
Germany continues to lose its energy-intensive manufacturing and export sectors. As living standards fall, voters search for scapegoats, and rising social tensions deter much-needed foreign investments. This toxic mix of caution and resentment could spread throughout Europe.
“The stability of Germany’s economic system, as we have known it for decades, is crumbling,” CEO of Thyssenkrupp AG, the country’s largest steel producer.
The current challenges facing German industry are comparable to those seen during the Great Financial Crisis and the Covid-19 pandemic — and this is occurring during a period of relative economic stability. Many Germans remain unaware of the potential societal consequences a future recession could bring.
Germany’s economic decline is largely due to underinvestment in infrastructure, particularly in transport and energy sectors, which hampers growth and industrial competitiveness. The country faces energy challenges, with high reliance on outdated systems and the phase-out of nuclear energy, making it harder to keep up with modern industrial demands. These infrastructure shortfalls are critical in limiting Germany’s recovery, affecting not only its own economy but also the broader EU market.
Source of chart: StephaneDeo via Michel A.Arouet
German industry is becoming somewhat similar to Japanese, where rapid growth ended in the 1990s, with peak production in 2007, followed by a ~30% decrease to 1980s levels, including the impact of the Fukushima energy deficit and nuclear plant closures.
Bloomberg: Germany’s Days as an Industrial Superpower Are Coming to an End. Reasons:
- Competition with the USA: U.S. subsidies are increasing, and Germany is struggling to counteract this trend;
- Competition with China, which is becoming less of a voracious importer of German goods;
- Loss of cheap Russian energy, impacting energy-intensive sectors;
All of this is happening against the backdrop of political "paralysis" in Germany, a labor shortage, and a deteriorating education system. Subsidies are gradually diminishing, and energy prices for industry have more than doubled, now among the highest in the EU and growing faster than in most countries.
While the decline varies (some places closing production, others reducing volumes, and some relocating to other regions), recent production data indeed show a consistent trend of contraction -1.6% month-on-month and -3.0% year-on-year. On average, since 2023, the industry has contracted by 1.5%.
In energy-intensive sectors, production declined by 5.8% month-on-month and 10.2% year-on-year in December, with a 22.5% decrease since December 2021. Although this sector is not critically large (around 17% of production), the concern lies in the persistently negative trends in the overall industry.
Tsunami of Antisemitism: "open and aggressively expressed antisemitism in all its forms" is "stronger in Germany than ever before since 1945."
Source: The Federal Government's Commissioner for Antisemitism, Felix Klein
Democracy in German kind: Police Raid Pensioner's House, Drag Him To Court After He Retweets Meme Calling Green Minister "Idiot"
More details: https://www.zerohedge.com/political/germany-police-raid-pensioners-house-drag-him-court-after-he-retweets-meme-calling-green
The Euro Area’s global export market share has steadily declined since 2020, falling 4 percentage points below its 2015 average by 2024.
In 2025, the economies of the US and Europe will move in opposite directions. These are the forecasts from economists surveyed by Bloomberg.
China’s energy surge signals relentless economic expansion, while the EU’s decline hints at deindustrialization and stagnation. If trends hold, China’s dominance will reshape global markets, leaving the EU struggling to maintain relevance in a rapidly shifting economic order.
In the 1980s, the EU and US share of global GDP was about the same…
Study from Germany: Nearly half of the respondents believe that "true democracy" will only be possible "when capitalism no longer exists."
Only 42 percent of all citizens see their vision of democracy reflected in the political system practiced in Germany. This is one of the findings of the "Leipzig Authoritarianism Study 2024," titled United in Resentment, presented on November 13. The satisfaction rate with the functionality of democracy, a metric tracked since 2006, has reached an all-time low and, for the first time since 2010, has dropped below 50 percent. According to the study, many citizens are dissatisfied not only with the government but also with politicians and political parties. Politicians are most frequently accused of "greed, arrogance, and incompetence," as well as of "failing to represent the population's interests."
In eastern Germany, only 29.7 percent of citizens approve of "democracy as it functions in the Federal Republic of Germany." This figure had previously risen steadily from 27.2 percent in 2006 to a peak of 53.5 percent in 2022. However, the current drop of 23.8 percentage points marks an unprecedented decline.
According to the study, only 73 percent of the population considers democracy in Germany to be "legitimate." While 95 percent of respondents in eastern Germany support the "idea of democracy" in principle, the figure is slightly lower in the west at 89 percent. "People in eastern Germany seem to view the implementation of democracy, as defined in the Basic Law, as inferior," the study authors write.
Data shows that eastern Germans feel far more powerless in relation to politics than their western counterparts. A belief in political ineffectiveness is also more widespread in the east. Over 63 percent of the population nationwide considers political engagement futile, a sentiment unchanged since 2006. However, in 2018, only 56.1 percent of western Germans shared this view, compared to the current 61.7 percent. In eastern Germany, skepticism about political engagement has consistently been higher, with at least 65 percent expressing doubt. In the latest survey, this figure reached 71.8 percent.
Eastern Germans also report feeling increasingly powerless in the workplace. Only 28.8 percent believe they can "make positive changes" at work, down from 55 percent in 2020. Nearly half of respondents believe "true democracy" will only be possible "when capitalism no longer exists." Over 60 percent think globalization benefits "only powerful economic interests," which the study's authors interpret as a growing "anti-American sentiment."
Naturalization in Germany? Only Possible Through the Courts!
Germany has earned a notorious reputation: anyone wanting to become a citizen must either wait endlessly – or take their case to court. The waiting times for a German passport are astronomical. While government agencies continue to stretch processing times from 18 months to as much as four years, there’s now a “golden route” to citizenship: filing a lawsuit. A naturalization process without going to court? Nearly unthinkable!
In major cities, the number of lawsuits is skyrocketing, thanks to § 75 of the Administrative Court Procedure Act, which gives applicants a powerful tool: if the authorities don’t respond within three months, they can sue. Lawyers have seized on this as a business opportunity, now offering “naturalization by lawsuit” as part of their services. And who foots the bill? The state covers court costs, attorney’s fees, everything. Applicants save money and fast-track their citizenship “the lawsuit way,” while everyone else waits for the administration’s decision.
The Berlin administrative courts are already overwhelmed. Instead of a single chamber handling these cases, four judicial panels now tackle naturalization lawsuits. Over 1,500 lawsuits are pending in Berlin alone – and the numbers are only climbing. Courts in Munich and Hamburg are also on high alert. The message is clear: if you want to become a German citizen, you have to sue. Traditional applications? They’re just an obstacle course for the most patient.
The federal government wants to speed up naturalizations, and Berlin’s administration has set a target of 20,000 cases – twice the previous goal. But instead of accelerating processing, the state has opened the floodgates for lawsuits. Lawyers profit, applicants achieve their goal faster, and other cases get delayed. Courts are groaning under the pressure, yet the “fast-track naturalization” through litigation seems unstoppable.
The reality is blunt: in Germany, if you don’t sue, you’ll wait. A naturalization system that forces applicants to go to court is anything but sustainable – but it’s a windfall for the litigation business. Germany in 2024: the German passport, once a privilege, is now being traded like a fast-track service.
Source: NZZ
2025: What's next?
My memory is a little fuzzy, but AfD rings a bell
A Brief Guide to Speculative Trading Ahead of a Nuclear Apocalypse - a five-step plan to profit from the anticipation of a nuclear doomsday:
German industrial sentiment is near COVID lows...
Tesla Overtakes Audi in Global Sales - EV maker delivers more vehicles than German premium brand.
Unemployment in the world's third-largest economy has risen for 24 months straight, the longest streak in at least 35 years. Germany has also likely experienced a 2nd straight year of contracting GDP, the longest stretch since 1999.
The German economy has contracted for the second year in a row. At this rate, Germany will join France and the UK as being poorer in GDP per capita terms than the poorest US state, Mississippi. Germany is already poorer than the second poorest US state, W. Virginia.
Germany hit by record wave of bankruptcies in 15 years. In 2024, 364 major German companies went bankrupt, up 30% from last year. This could rise another 25–30%, hitting levels unseen since the 2009 financial crisis.
Source: Handelsblatt
Link: https://www.handelsblatt.com/unternehmen/handel-konsumgueter/insolvenzen-experten-warnen-vor-firmenpleiten-auf-finanzkrisen-niveau/100088623.html
It's no surprise that bridges in Germany are collapsing when you look at the net investments in infrastructure over the years. The German obsession with the 'black zero' and avoiding new debt has clearly backfired, leaving the country with outdated and crumbling infrastructure. While the U.S. is pushing forward with a $2 trillion investment plan, Germany seems stuck in a cycle of underinvestment, which not only hampers economic growth but also endangers public safety. The government's failure to prioritize infrastructure has led to this point, where critical structures fail, and public trust in governance erodes.
Links:
The Dubai chocolate case lays bare the inconsistency of Germany’s legal system. One court bans it, another approves it—contradictions that undermine Germany’s reputation for precision and create chaos for businesses and consumers alike.
Sources:
https://www.dailysabah.com/business/dubai-chocolate-must-come-from-dubai-german-court-says/news
vs
https://www.yahoo.com/news/german-courts-split-dubai-chocolate-185618820.html
GERMANY’S ECONOMIC MODEL IS BROKEN, AND NO ONE HAS A PLAN B
Executives say Germany is missing out on the investments that could lay the foundations for new industries. Over a third of industrial companies in Germany are cutting investments in core processes due to high energy costs, according to Allianz. Two-thirds report that their competitiveness is at risk.
Decades of government underinvestment have left Germany with a depleted transportation infrastructure, including trains that no longer run on time and a military that is a shadow of what it was during the Cold War. In May, the business-affiliated IW economic institute and the trade union-owned IMK think tank estimated Germany would need €600 billion in spending over the next 10 years to offset its investment gap, modernize the country’s education system, fix its transport networks, upgrade its power grid and digitize its public administration.
German consumers, meanwhile, are among the most highly taxed in the world.
Source: WSJ
More details:
Executives say Germany is missing out on the investments that could lay the foundations for new industries. Over a third of industrial companies in Germany are cutting investments in core processes due to high energy costs, according to Allianz. Two-thirds report that their competitiveness is at risk.
The German government has sharply lowered its growth forecast ahead of the snap election. It now expects GDP to grow just 0.3% in 2025, down from 1.1%, slightly below market expectations. The 2026 forecast was also revised down from 1.6% to 1.1%, slightly above consensus.
Source: HolgerZ, Bloomberg
Germany’s dependence on growing exports to China has backfired. The data shows that trade with China started losing momentum as early as 2017-2018 and is now in decline. Despite years of warning signs, Germany has failed to adapt or develop a new business model, leaving its economy increasingly vulnerable.
German automakers are getting hit with a triple whammy:
1) Losing out to Chinese EVs in China
2) Sluggish auto sales in Europe
3) And now tariffs on exports from their Mexico plants to the US
Sources: WSJ, Kyle Chan
Link: https://www.wsj.com/business/autos/tariff-threat-canada-mexico-prompts-automakers-to-find-new-suppliers-consider-higher-prices-13930394
Germany’s collapse, other perspective
From Economic Powerhouse to G7 Laggard
Germany’s Ministry of the Interior is setting up a hotline and advisory center to encourage people to report a family member or friend for spreading “conspiracy theories.”
Source in German: https://www.bmi.bund.de/SharedDocs/pressemitteilungen/DE/2025/02/beratungskompass.html
“US tariffs could cost Germany around 300,000 car jobs”
Germany is set to be the biggest loser in Europe due to the new U.S. trade tariffs, according to a study by the Cologne Institute for Economic Research. Analysts estimate that Trump’s tariff policies over four years will cost the 27 EU countries a total of €750 billion, with Germany alone bearing €200 billion of that burden.
The findings are based on export volumes to the U.S., where Germany is the clear leader, followed by Ireland and Italy. This makes Germany’s trade surplus a particular point of contention for Trump.
Experts at the Cologne Institute predict that by 2028, Germany’s GDP will be 1.5% lower than it would have been without these increased U.S. tariffs.
Germany is the European country the most sensitive to global trade. Dax and MDax have a beta of 1.9 to world trade growth — meaning they tend to move almost twice as strongly w/changes in global trade.
Source: GS
Germany: From Car to Weapons Manufacturer
https://www.linkedin.com/posts/christian-erras-74a940194_d-vom-autoland-zum-panzerlied-activity-7317767137652101121-dFqg
German job market is deteriorating: The number of unemployed people in Germany hit 2.96 MILLION in May, the highest in at least 10 YEARS. This is even higher than at the 2020 CRISIS peak. The unemployment rate sits at 6.3%, the 2nd-highest in 10 years.
Source: Global Markets Investor
Bleak times ahead in Germany, with one bankruptcy auctioneer in the business for 30 years saying it is worse than the 2008 financial crisis:
If you’ve ever wanted to witness the slow-motion collapse of a Ponzi scheme, you might want to keep an eye on Germany’s public pension system.
War as Germany’s reset button? That’s the sick logic some politicians seem to buy - often morally and ethically rotten, but a brutal way to blast out of the crisis!
Europe - Market Mispricing The Outlook - German Economic Activity Worrying Trend
Germany is experiencing a sharp rise in corporate insolvencies, as the country enters its third year of economic stagnation. The current environment is, by several measures, more concerning than during the global financial crisis of 2009.
In the second quarter of 2025, the number of corporate and partnership bankruptcies reached a 20-year high. While 1,420 insolvencies were recorded in June—slightly below May’s figure—this still represents a 23% increase compared to June 2024. The most dramatic spikes were observed in economically strong regions such as Bavaria and Hesse, where insolvencies surged by 80% and 79%, respectively.
In total, 4,524 business bankruptcies were registered in Q2 2025, marking a 7% increase over the first quarter. Economists point to two main drivers: the ongoing recession and a broad market correction following years of ultra-low interest rates set by the European Central Bank.
During the pandemic, extensive government aid had kept many fragile firms afloat. That support has now faded, and the market is undergoing what analysts describe as a long-overdue cleansing cycle.
Germany’s Industrial Output Hits Lowest Level Since May 2020!
War as Economic Reset: The Silent March to a Militarized Economy in Germany: Germany is not sliding toward confrontation by accident — it is actively preparing for it. Not defensively, not diplomatically, but operationally. This preparation hides in plain sight: under the banner of climate transitions, infrastructure renewal, labor policy, and defense realignment. Behind these technocratic facades, however, lies a darker logic…
“They want war. Their economy is collapsing. Without war, Europe is going to collapse”. Martin Armstrong Warns: Europe Faces War, Economic Collapse, and the End of the Euro:
In 2025, Germany imported electricity on 148 out of 203 days, a sharp rise compared to just 5 days in 2017 and 11 in 2018. 👀
How the "Great Reset" is destroying industrial production in Germany, update June 2025.
Germany's economy took a hit in Q2 2025, shrinking by -0.3% compared to Q1, a worse drop than the earlier estimate of -0.1%. The struggle is real - the German economy has contracted in 7 of the last 11 quarters, with two others barely holding flat. This ongoing slump paints a picture of economic stagnation.
According to the latest calculations by the Federal Office, there was still a mini-growth of 0.3 percent in the first quarter because business was brought forward for fear of the tariff threats from US President Donald Trump at the time.
German 30-Year Bond Yield jumps to highest level in 14 years.
This is the scariest chart: over the last five years Germany has seen essentially zero average real GDP growth, one of the lowest rates across the world...
Germany – the laggard of advanced economies. Since 2017, German GDP has barely grown (+1%), while:
🇺🇸 US is up +19%
🇪🇸 Spain +13%
🇫🇷 France +8%
🇮🇹 Italy +6%
🇪🇺 Eurozone average +9%
What was once Europe’s industrial powerhouse now trails far behind its peers. The chart shows it clearly: Germany has not only lost momentum after Covid, it has structurally fallen out of sync with the global growth cycle. This isn’t just a cyclical slowdown — it’s a sign of deeper problems in competitiveness, productivity, and investment.
If the status quo were to persist, German economic growth would likely remain well below 1% per year until the end of the decade. By comparison, the US economy is expected to grow by an average of up to 3% per year over this period. German per capita income—already a third below that of the US in current US dollars—would thus fall further behind. Over ten years, at current growth rates, German per capita income would be left at about half the US level.
Source: Deutsche Bank
German economic outlooks remains DIRE: In 2024 the world's 3rd largest economy FELL by 0.2% following a 0.3% decline in 2023. This is the 2nd time since 1950 that GDP contracted for 2 years in a row. German IFO Economic Research Institute expects just 0.2% growth in 2025.
German bankruptcies rising:
The Dark Side of Germany's Green Dream: The Influence of Germany's Green Energy Transition on Asia's Shift to Environmentally Harmful Energy: As Germany pushes forward with its ambitious "Energiewende" or energy transition aimed at decarbonizing its massive economy, the ripple effects are felt far beyond its borders, particularly in Asia, where the dynamics of energy consumption are shifting in response to global market changes.
Germany’s Federal Audit Office reveals IT collapse: billions wasted, goals missed, insecure networks — a decade of digital stagnation in Berlin.
The Silent Reserve Army: How Germany’s Migration Policy Could Be Part of a Wartime Economic Strategy. In the autumn of 2015, Germany underwent a dramatic demographic and political shift. Under Chancellor Angela Merkel’s famous banner of “Wir schaffen das” (“We can manage this”), the country opened its borders to hundreds of thousands, and eventually millions, of migrants from the Middle East, Africa, and parts of Asia. The public rationale was built on …
West Germany and A Moral Failure: The BND, built on the ashes of Nazi intelligence, shamelessly employed war criminals like SS officers and Einsatzgruppen murderers, while Adenauer’s government turned a blind eye with cold-blooded pragmatism. Backed by the U.S., the young Federal Republic sold its democratic soul for Cold War gains, shielding these atrocities for decades. Even today, hidden files and half-hearted reckonings expose a democracy that buried its Nazi past rather than confront it.
It’s no coincidence that in Germany, even emigration requires a government form. We are the country of insurance policies, certificates, and the sanctified Thermomix. But beneath that polished surface: exhaustion, quiet frustration, a collective paralysis. Welcome to the Constancy Trap – Germany’s national illness, dressed up as rationality.
A Strategic View: Could This Be the U.S. Playbook for Europe?
Germany’s radical fiscal shift is being hailed as a necessary step to revitalize growth, strengthen defense, and modernize infrastructure. But at what cost? By abandoning its traditionally conservative fiscal policies, Germany risks opening Pandora’s box of uncontrolled spending, mounting debt, and economic fragility. The supposed economic boost may turn out to be a short-lived illusion, while the burden of fiscal expansion falls on future generations.
A Warning for the Future
Germany is at a crossroads. One path leads to the reaffirmation of democratic values and a renewed commitment to unity. The other leads to division, isolation, and the erosion of freedoms.
Deutsche Bahn: Germany’s National Embarrassment on Rails. One in three long-distance trains delayed. A national railway system in chaos. For a country that prides itself on engineering excellence, Deutsche Bahn’s performance in 2024 is nothing short of a disgrace.
The Dependency of German Automakers on China
In recent years, it may have seemed that the German automotive industry had no alternative to its strong focus on China. It appeared clear that the industry could only grow and achieve good profits if more cars were built and sold there. However, an analysis by Handelsblatt of data from the information service provider Marklines shows a different story.…
The downturn in German industry is picking up speed, with almost a quarter of a million jobs lost in the sector since 2019, according to an EY study released on Tuesday. German industrial firms generated revenue of over 533 billion euros ($623.98 billion) in the second quarter of 2025, down 2.1% year on year, EY found, citing official statistics office data. This followed a 0.2% decline in the first quarter.
Germany's air travel is still lagging far behind where it was before the pandemic. Passenger numbers crept up slightly to 99.4 million in the first half of 2025, a 2.8% bump from last year, but that's still 15.8% lower than 2019. Berlin's main airport, BER, is struggling even more, handling 30% fewer passengers than the old Tegel and Schonefeld airports did together back in 2019.
The economy isn't doing much better. Big sectors like construction and manufacturing are operating 12-15% below 2019 levels. Aviation has lost about 24% of its jobs - 60,000 out of 255,000 - and across the country, nearly 700,000 jobs have disappeared. Strict regulations, high taxes, and a rough economic situation are the main reasons. Factories are only at 77.7% capacity in Q2 2025, well below the usual 83.4%, showing weak demand at home and slowing exports.
Airlines are frustrated with heavy regulations and local taxes on top of strict EU rules. Ryanair is pulling out of Dortmund, Leipzig, and Dresden entirely, while cutting flights from Hamburg by 60% and BER by 20%. They say if the government drops the air transport tax, they’d invest $3 billion and create 1,000 jobs, potentially boosting passenger numbers to 34 million a year.
Since 2019, Germany has lost 60 civilian planes, going from 190 to 130, along with 10,000 jobs and over €4 billion in yearly economic value. The government isn’t doing much about it. One official mumbled something about maybe lowering the air tax, but the 2026 budget has no real support for the industry.
Taxes and fees are brutal, especially on domestic flights, where they can eat up 35% of the ticket price. The air tax alone jumped 25% in 2024 and now makes up 10-12% of a ticket. Add in CO2 fees, airport usage, security charges (another 10-15%), and airport services (8-10%). In places like Poland and Italy, total fees are more like 10-15%, way less than Germany.
Germany plans to tap into citizens’ savings. Chancellor Merz: "There are 2.8 trillion € in German accounts, savings accounts and current accounts. Just imagine for a moment if we were able to mobilise only 10% of that, at a reasonable interest rate, for public infrastructure."
Source: https://apollo-news.net/auch-aus-den-verfgbaren-einkommen-merz-will-mehr-fr-sozialsysteme-tun/
Over the last 5 years Germany has seen essentially zero average real GDP growth, one of the lowest rates across the world.
If you have gained a foothold in Germany and learned the language so well that you feel like a local:
Are We The Baddies? Germany after Elections 2025
