Newsletter XXIX

The German Model Has Collapsed, and the Merz Government Starts Strong to Change It

Germany has swallowed up its own growth and that of the rest of Europe. Its performance is weaker than that of other countries and the U.S. The totem of external account surpluses carries high risks: 20% of the savings accumulated over 25 years has evaporated. The powerful auto industry cheated with Dieselgate and is seriously lagging on electric vehicles. Public debt as a moral fault has become constitutional law, requiring a high majority to amend. Digital and green technologies, more Europe, and a revival of domestic demand are the right directions taken by the upcoming Grand Coalition government.

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