Avocet

Just look at these numbers. Germany’s industrial decline is largely self-inflicted. It is the clear outlier among its neighbors, while all have grown, or at least held industrial production, Germany’s has contracted. The causes are mainly bad left-green policy choices. The nuclear phase-out removed reliable, low-cost baseload power. Analyses estimate this raised electricity prices 20–25% above a counterfactual with the fleet retained, while increasing reliance on coal and gas. German industrial electricity prices remain among the highest in the EU, a clear cost disadvantage for energy-intensive manufacturing. Chronic overregulation and bureaucracy compound this. Industry surveys find 85% of firms cite bureaucracy, slow permitting, and regulatory uncertainty as major barriers to investment. The ifo Institute estimates the annual economic cost of excessive bureaucracy at up to €146 billion in lost output. Capital and talent are diverted to compliance rather than innovation or expansion. Complacency and arrogance also underestimated Chinese competition. German auto exports to China have roughly halved from their 2022 peak. Machinery and other core sectors face rising import competition as Chinese firms scale in EVs, batteries, and industrial equipment. What was once a reliable growth market has become a source of structural pressure. Chinese competitors are also rapidly gaining share in other countries. Neighbors faced the same global headwinds, China, energy shocks, supply chains, yet largely grew or held steady. Differences in energy policy, regulatory density, and the ability to attract or retain investment help explain the gap. Germany’s strengths, engineering talent, strong mid-sized companies, export culture, remain real but are systematically offset by bad political choices. Germany’s demise will one day be studied as the largest self-sabotage of a developed economy. Don’t be like Germany.