Germany’s economy is collapsing at an unprecedented rate. Investors have yet to wake up to this alarming reality – once they do, it could well mean a mass exodus of capital from the Eurozone.
This situation poses a serious threat to the stability of the euro currency and the EU itself. The problem is self-inflicted. For the past decade or more, German voters have overwhelmingly supported and elected the current policies at both the federal and state levels. Germany is essentially reaping what it has sown by democratic choice.
The consequences of a deindustrialization of Germany will be felt on a continental scale. It creates a perfect storm that will not only affect the country itself, but also send tremors throughout Europe, since the Euro depends on Germany’s economic performance and rating. Germany is not only Europe’s largest economy, it is also its economic hub, linking Europe’s diverse economies as its largest trading partner and as an investor in many of them.
The future of Europe depends on the homegrown decline of a once mighty economic powerhouse. I wonder why the other European states – from France to Italy and Spain – don’t put more pressure on Germany.
At some point, Germans will wake up to the situation. But I’m skeptical about immediate change. If there were genuine regret among the electorate, it would manifest itself in future elections. The country’s decline is likely to continue as long as public denial persists.
As conditions in Germany deteriorate, those who can flee will flee. The result may be that German companies are German in name only. Those who can’t flee, hope for subsidies, sell out, or give up.