Germany’s business model is breaking down due to growing fears of deindustrialisation. The southern German state of Baden-Württemberg, home to major companies like Bosch and Mercedes, is feeling the strain. Finance Minister Danyal Bayaz warns that Germany has squandered its “globalisation dividend” over the past 15 years by underfunding public infrastructure.
The country’s economic woes are exacerbated by an energy squeeze, increased competition from China, and the prospect of tariffs imposed by the US on imports. As a result, Bayaz fears that Germany’s business model is “collapsing”. The upcoming election could further destabilize the situation, potentially even removing Chancellor Olaf Scholz from office if his party does not reform first.
Source: https://www.economist.com/europe/2024/11/20/once-dominant-germany-is-now-desperate