De-Industrialization is Destroying the German Economy

9 August 2023

The German economy is crumbling before our eyes. It has exhibited virtually no growth over the past couple of decades and is now firmly in yet another recession. But even worse than the current state of its economy, is the country’s economic outlook. As the economic analyst Adam Button recently noted: “I’m struggling to see a way forward for the German economy.”

This is because industrial production in what has long been Europe’s economic engine continues to fall rapidly, dropping by 1.5% in the month of June alone, according to the latest data. Yet Germany simply continues to shut down its own industry in an attempt to bring down its energy usage in the name of “going green.” Soaring energy prices caused by the conflict with Russia and even more importantly, its recent phasing out of nuclear power, are driving up production costs.

For decades Germany has relied upon its automotive factories to power its export-driven economy. But all of that now seems to be coming to an end, as more and more German companies are moving factories to China. China’s automotive industry is continually eating away at the margins of Germany’s key high-wage industry, and on top of that even the German chemical giant BASF recently announced that its new $10 billion production plant will also be opened in China. This comes as it is cutting down production in Germany itself. In light of the energy crisis, the German government also recently announced that controlled electricity blackouts or “load shedding” could be introduced in the country from next year as a means to control the national supply and demand of electricity.

Things are definitely not looking good for Germany, but given that its own de-industrialization agenda lies at the heart of its economic destruction, it really only has itself to blame.