Germany is in crisis.
Is this a failed European power? Not yet but maybe soon.
Germany, a very interesting nation. In the last 100 years it has experienced hyperinflation, economic depressions, war, fascism, communism, capitalism, genocide, break up, re-unification, a little bit of everything. Towards the turn of the century, things were on the up for Germany and it had one of the best economies in the world that was driven by impressive export figures. But here we are looking into 2024 and many of the world's top economists are asking is this nation once again the Sick Man of Europe.
Germany has been in recession for the majority of 2023 and once again is drawing attention for all of its internal problems. Outlook for the German economy has deteriorated and it's recovery efforts look bleak.
More so, I personally am starting to believe that its a country run by complete idiots. Lets look at some of their recent failures.
Deals with Russia: Remember how Germany and Russia colluded to create this ridiculous Nord-Stream pipeline, making Germany reliant on Russian energy? Poland and the other Baltic nations wanted Germany that it was a bad idea, but they did not listen. Completely stupid idea by the Germans.
Migrants: When the migrant crisis hit Europe in 2015/2016, the Germans were quick to take in as many Middle Eastern migrants as possible. What happened? Well, terrorist attacks in Germany became common, crime went up, and their right Right Wing nationalist parties (like AfD) started gaining popularity. There's a major Parliament election next year in Germany, and some predictions point to the right wing getting even more gains.... Germany and the right wing.... I think I read about this before somewhere.
Lets go back to Energy. So, Germany tries very hard to be a green nation. They have invested greatly into solar power and wind power. One issue though is that this aggressive investment into solar polar is not quite effective in North Europe. Studies have shown that Germany can get about 1,000 kWh per year per square meter of solar radiation, not particular high compared to Spain for example which easily gets over 2,000 kWh of solar radiation over that same metric. Yes, shocking, cold and gray Germany doesn't have enough sun to be sufficient on solar.
One thing that has always bothered me is Germany bullying Poland over our coal plants. They were telling us over the last decade that they are bad for the environment and that we need to shut them down. Yet, in 2022 Germany shut down their nuclear plants and started burning more coal. Currently they burn more coal than any other EU nation. Maybe the plan was for Poland to shut down our coal plants so we would be forced to buy German coal?
But then again, maybe moving back to coal makes sense for Germany. When it comes to overall technology, it seems they are lagging. A DW Report pointed out that Germany was one of the least digitized nations in Europe, and this makes sense seeing how they have underinvested in digital infrastructure over the years. And what's even more shocking, the government recently decided to cut their spending even more on digitization and infrastructure efforts by 99%. In fact, the new joke or stereotype of German trains is that they are always late. Also, this is not a joke but maybe should be.. 80% of German companies still use fax machines. Comical.
Is Germany ready for the future? Lets look at cars. German EVs seem to be trash based on online reviews and it seems even the big guys like VW and BMW are struggling to sell. I was personally shocked recently on the major discount you could get on a BMW 330e. Their traditional car sales are sluggish too, with global sales down among all major German manufacturers.
The severe lack of any large German tech giants also shows that they are lagging to keep up with this tech-focused world. It is a nation that lacks in innovation, they don't have companies rising and falling constantly, the majority of German giants were around in the 1990's, which is not the case with other economic powers like the US or China. There is no German Tesla, Google, or Alibaba.
Historically, Germany became an economic powerhouse in the 20th century because of the United States, the US forced Germany to push their top engineers away from the military and into consumer manufacturing. This was understandable since the Germans started two world wars in the 20th century which led to death of millions and the destruction of Europe. But now, with the US seemingly buddying up more to Poland, things seem to be shifting. Seeing how Poland kept warning Germany of reliance on Russia, and since Poland invested more into Liquified Natural Gas terminals to supply energy to Eastern Europe, it seems Poland is better prepared for the future and is making better decisions. Poland is even opening up a nuclear plant in the next decade.
One thing is for sure, with Germany being sick, this presents a problem and an opportunity for Poland. Germany and Poland are economic allies, as 28% of Poland's exports go to Germany, a slow down in Germany will have an effect here. But seemingly it provides an opportunity for Polish companies to take advantage of cost economics and position their products as better options to their expensive German counterparts. Time will tell but one thing is for sure, Germany needs to get its shit together.
