A Broken Germany: Europe Confronts Its Economic Suicide

The year 2026 opens on a truth that no one can conceal any longer. The industrial matrix of the continent, the bedrock of European prosperity for three decades, Germany has entered a structural recession. The Financial Times put it in black and white at the end of 2025: Europe’s leading economy will only with difficulty regain its pre-earthquake level of 2020–2022—that Germany of before the pandemic and the war in Ukraine, anchored in cheap energy, globalized value chains, and a geopolitical stability that is now gone.

This is not a cyclical pause. It is a regime change.

But be warned: it is a model that is collapsing. Germany is not suffering from a shortage of skills, nor from technological obsolescence. Germany is the victim of an accumulation of political decisions—German and European—that have methodically undermined its productive foundations. The question is no longer whether Berlin is going through a rough patch, but whether the European Union has, through ideological blindness, engineered the systemic weakening of its economic heart.

Industrial Agony

The figures are unequivocal. In 2025, crude steel production fell by roughly 10 percent. Iconic sites are closing or being hollowed out. Steel giants all cite energy costs that have become incompatible with any heavy industrial activity. The automotive sector, the pillar of the Mittelstand and the showcase of German expertise, is following the same trajectory. From 5.6 million vehicles produced in 2017, Germany fell to just over 4 million in 2025. The 2026 outlook slides toward 3.4 million.

This is not about defending a bygone past, but about recalling a material reality. A decarbonized economy requires more steel, more copper, more chemicals, more machinery, more infrastructure. One does not build hydrogen, smart grids, batteries, or wind turbines on an industrial desert. The green transition presupposes a robust productive base. Yet in 2026, Germany is destroying more capacity than it is creating.

The pathology is imported: energy shock, geopolitical uncertainty, regulatory inflation. The engine is not seized; its fuel has simply been taken away.

A Political Failure

Germany obviously bears its share of responsibility: the hasty nuclear exit, the illusion of eternally cheap Russian gas, chronic administrative inertia. Errors that could have been corrected were frozen in place, then amplified by a European architecture that has become incapable of arbitrating between morality, geopolitics, and economic survival.

The break with Russia after 2022 was a historic turning point—morally defensible—but managed with staggering carelessness. The destruction of the Nord Stream pipelines—whose responsibilities remain taboo—sealed a lasting dependence on American liquefied natural gas, structurally more expensive. In 2026, German industry is still paying for this shock: costly energy, chronic volatility, loss of comparative advantage.

Layered atop this is a green transition conceived in Brussels as a normative liturgy rather than as an industrial policy. Climate objectives are not in question, but their implementation is undeniably dogmatic. Carbon taxes, environmental standards, and transformation mandates pile up without a credible productive strategy. Factories close faster than they transform.

This headlong rush is assumed and embodied by Ursula von der Leyen, expressed in prolonged sanctions, regulatory hardening, and strategic centralization. Capitals follow suit—Berlin foremost among them—despite Germany, the continent’s leading economic power, behaving as a disciplined executor.

The contrast is stark: while Washington, under a protectionist Trump II administration, massively subsidizes its industry, Europe constrains its own. German companies invest more in Texas than in the Rhineland.

The Social Fracture

The consequences are no longer abstract. Exhausted municipalities, devastated industrial basins, anxious middle classes. Political anger swells. In North Rhine–Westphalia, a historic CDU stronghold, the AfD exceeds 25 percent. In the East, it is hegemonic. Among young urban voters, radicalism swings left.

This is no accident, for deindustrialization destroys more than jobs. It shatters the German social contract founded on stability, competence, and shared prosperity. Elites open a highway to anti-system forces the moment they explain that “pain is necessary” in the name of abstract objectives. A union that promises prosperity and delivers decline does not retain the loyalty of its peoples. By weakening its engine, the European Union may be irreparably weakening its own project.

Escaping Blindness

At the end of 2025, Chancellor Friedrich Merz launched an investment plan of up to €500 billion to “save industry.” The intention is sound and laudable. Alas, this plan collides with the European architecture itself. Without a lasting relaxation of fiscal rules—an investment golden rule, partial mutualization, an expanded role for the European Investment Bank—everything will remain symbolic. Europe can mobilize hundreds of billions to stabilize finance, yet hesitates to do so to save its productive base.

Three breaks are required.

Energy pragmatism. Not to abandon the climate, but to sequence priorities over time. Secure abundant and inexpensive sources—including nuclear—in order to preserve the productive apparatus during the transition.

Strategic de-escalation. Not to capitulate to Moscow or abandon Ukraine, but to recognize that one does not wage a long war while sabotaging one’s own energy base. Autonomy is not morality; it is its material condition. Morality does not produce kilowatt-hours.

Debureaucratization. Not to dissolve the Union, but to restore political primacy over norms, and to replace regulatory religion with a genuine industrial policy.

The European illusion does not end with Russian energy. It extends to a growing dependence on China for rare earths, permanent magnets, and the components of batteries and wind turbines. Europe claims geopolitical emancipation while entrusting Beijing with the sinews of its green transition. It replaces one vulnerability with another and confuses strategic virtue with real fragility.

Germany is not testing Europe’s patience; it is revealing its strategic failure. A union that sacrifices its industrial heart on the altar of moral posturing and poorly mastered geopolitical calculations condemns itself to impotence.

Germany’s collapse is not a fatality. It is the product of political choices.