European Capital Partners - No Wirtschaftswunder no more Discover this fund | European Capital Partners
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No Wirtschaftswunder no more

Jan 25, 2024

The German Wirtschaftswunder has lost some of its shine, and this already before the Ukraine conflict. This can be seen in the drop of industrial production that is back to 2012 levels. We see different reasons: 1/ an economy overly reliant on its car industry that has missed out on the EV trend 2/ the catch-up of Chinese competition delivering cheaper products at good quality and 3/ the importance of China as an export market. 4/ a certain lack of innovation, administrative and tax complexity. 5/ an overreliance on cheap Russian energy. While Germany is certainly not the sick man of Europe, it is, as German Finance Minister Lindner expressed it in Davos this year, a tired man in need of a “good cup of coffee” of structural reforms.

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