Kein Sommernachtstraum

Germany’s industrial slowdown can no longer be explained by COVID-19 alone. Production has been declining steadily, with energy-intensive sectors hit particularly hard. Output in these areas has failed to rebound and now stands about 20% below 2021 levels.

This is more than a cyclical dip — it is accelerating deindustrialisation. Germany’s competitive position as a manufacturing hub is eroding under the weight of well-known structural challenges: expensive energy, excessive bureaucracy, underinvestment in infrastructure, an overburdened welfare state, collapsing education standards, and a shortage of skilled workers, engineers, physicists, and chemists. Added to this is political leadership often detached from industrial realities.

Turning the German supertanker will be a formidable task, even with new government spending plans.