Germany Is Shrinking and Deindustrializing. You Can Thank the Greens.

The German economy experienced a recession in 2023. GDP for the full year was down relative to 2022. The factors behind this are continuing, and 2024 is set to be a second straight year of recession for Germany.

Of course, other economies, including China, Japan, and the UK, are either slowing or already in recession. The U.S. has held up, according to headline numbers on GDP and employment, but there is ample evidence behind the curtain, including GDI (Gross Domestic Income), labor force participation, alternate employment measures, and inverted yield curves that all suggest the U.S. may be in or near a recession now.

Still, Germany’s problems are partly unique and completely self-inflicted, as explained in this article.

As early as the mid-1990s, Germany fell victim to the Green New Scam. Former Chancellor Angela Merkel spent 14 years closing almost every coal-fired and nuclear power plant in Germany. She relied on cheap Russian natural gas to fill the gap while Germany went about building windmills and solar module panels to supply “renewable” energy in the future. This plan failed disastrously.

Obviously, solar panels don’t work at night or in bad weather (I own a large solar grid; believe me, I know), and windmills don’t work when the wind doesn’t blow and can fail catastrophically in extremely cold weather (when they are most needed) as the blades become brittle and the turbines freeze-up. More to the point, they cannot provide baseline power to maintain a modern power grid even when they do work.

On top of this, NATO or its allies in Ukraine blew up the Nord Stream 1 and 2 pipelines, and Russian natural gas exports to Germany have slowed to a trickle. The result has been much higher energy costs for German industry, including its two biggest export sectors: chemicals and automobiles. Industry has responded by outsourcing (I recently purchased a “German” sports sedan and learned the engine was built in Hungary. I’m fine with that, Hungarians are smart and productive. But someone in Germany lost a job).

This will not be easy to reverse. The world’s fourth-largest economy and second-largest export powerhouse lost its mojo due to dumb green ideology. The U.S. is going down the same path. Let’s hope the upcoming elections can change that trajectory.

Corporate leaders and institutional fiduciaries looking to incorporate state of the art predictive analytics to their risk mitigation and strategic analysis should click the link to learn more about Raven Predictive Analytics®.