Germany is in decline. Not just since Corona and the Ukraine war. Relevant performance indicators have been trending negative for a long time. Productivity improvements have been Germany’s hallmark for a long time – but unit labor costs have been rising for many years. Germany is no longer among the top ten countries in Europe in terms of gross domestic product per capita. We fell out of the list of the 20 most competitive countries in the world.
16 years as Chancellor of Angela Merkel were too much even for a country as strong as Germany. In the Merkel era there was not a single structural reform that would have made the country more efficient. However, two fundamental decisions will have a lasting effect: the energy transition and opening the borders to uncontrolled migration. The energy supply became much more expensive. The culture of the country has changed and social systems have come under pressure.