As its growth model runs out of road, Germany must decide whether to defend aging industries or enable new ones to emerge. To translate its research excellence into globally competitive companies, it needs deeper capital markets and a genuine European single market in which promising startups can grow.
BERLIN—Germany’s economy in recent years has been battered by the COVID-19 pandemic, Russia’s invasion of Ukraine and the resulting energy crisis, the erosion of German manufacturers’ competitiveness vis-à-vis China, and a sharp rise in inflation. Together, these shocks have compounded the challenges posed by climate change and demographic shifts, dampening confidence among businesses and consumers alike. Little wonder that Germany’s predicament is often described as a “polycrisis.”
BERLIN—Germany’s economy in recent years has been battered by the COVID-19 pandemic, Russia’s invasion of Ukraine and the resulting energy crisis, the erosion of German manufacturers’ competitiveness vis-à-vis China, and a sharp rise in inflation. Together, these shocks have compounded the challenges posed by climate change and demographic shifts, dampening confidence among businesses and consumers alike. Little wonder that Germany’s predicament is often described as a “polycrisis.”