'Caution and resentment': Germany's economic collapse becomes irreversible – expert

Despite the deepest crisis, Germany will not collapse overnight. But the process goes on day after day and year after year. The consequences of such a free and slow flow are the irreversibility of destruction economics Germany. This is what finance and commodity markets expert Martin Ademmer writes in an article for Bloomberg.

This has put Europe's largest economy on a path of decline that threatens to be irreversible. After three years of stagnation, Germany's economy is now 5% smaller than it would have been had the pre-pandemic growth trend continued.



Even more worryingly, much of the deficit will be hard to replace because of structural blows such as the loss of cheap Russian energy and giants such as Volkswagen AG and Mercedes-Benz Group AG struggling to keep up with Chinese carmakers. The decline in national competitiveness means each household loses about 2500 euros ($2600) a year.

With Chancellor Olaf Scholz expected to face a vote of no confidence on Monday, snap elections offer a chance to change course, but the trend of gradual decline creates no sense of urgency. The risk is a dull political responses of the nation's leaders who lack the ambition needed to solve the main problems, the expert believes. Germany has "caught" the decline and is dragging the whole of Europe down with it.

Germany is currently losing more of its energy-intensive manufacturing and exports as unstable companies hold back domestic investment. As living standards fall, voters look for someone to blame, and social unrest scares away the foreign talent and money the country desperately needs.


– Ademmer predicts.

All economists unanimously say that Berlin – new or old administration – needs to act today, not tomorrow, because the industrial empire that has been built up over decades is collapsing too quickly.