Germany — the End of Economic Innocence

These days Germany feels like it is experiencing the final moments of its golden age. The country has never done so well: order books are full, the unemployment rate is at one of its lowest ever levels, and Germany, which is now in its tenth consecutive year of growth, is experiencing its longest economic expansion period since Chancellor Ludwig Erhard. And yet, the economic miracle is coming to an end: economic storm clouds are gathering over the German sky.

This summer, industrial production fell by 5% and exports by 8% compared to last year. The business climate is worsening. More and more companies are using part-time work. Calls for stimulus measures are finding increasing echoes and everyone is talking about the upcoming recession. The term “recession” now appears in the Google search engine with the same frequency as during the 2008 crisis.

But this debate is falling short. Germany is far from being on the threshold of an economic crisis of unknown magnitude and duration. My concern is: Germany is entering a structural crisis. The country is living through a present that will soon become a thing of the past. The economic order from which it has benefited is disappearing. A new economic order is emerging and Germany has yet to find its place in it.