Germany Can Find Exit Ramp Off Road to Nowhere
As Trump’s shadow looms over Europe, Berlin should try a dose of self-help that Paris can’t.
What would an economic reboot entail?
Photographer: Krisztian Bocsi/Bloomberg
Of all the “sick men” of Europe filling up the ward in various stages of economic malaise, it’s Germany’s symptoms that look the most visible, as automaker Volkswagen AG attests. Yet Germany also has the best shot at self-medicating — provided it wakes up to the fact that its failures are as much fiscal as industrial.
A perfect storm of competitiveness seems to be battering German industry, which accounts for about a fifth of economic output. Key firms are suffering from tougher global competition, pricier energy and a lack of innovation: Volkswagen, the country’s biggest employer, plans to shutter German factories for the first time, while chemical-sector jewel Covestro AG is being acquired by Abu Dhabi investors after two straight years of losses. The onshoring of critical technology like semiconductors and batteries, fueled by ambitious industrial policy and gobs of state aid, is hitting stumbling blocks from Intel Corp. to Northvolt AB.