Germany is reaching a point of no return. Business leaders know it, the people in the country feel it, but politicians haven’t come up with answers.
That has set Europe’s largest economy on a path of decline that threatens to become irreversible.
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More worryingly, Bloomberg Economics estimates that the bulk of the shortfall will be tough to recover, due to structural blows such as the loss of cheap Russian energy and Volkswagen AG and Mercedes-Benz Group AG struggling to keep pace with China’s auto firms.
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Germany doesn’t collapse overnight. That’s what makes this scenario so absolutely gut-wrenchingly terrifying,” said Amy Webb, founder and chief executive officer of Future Today Institute, which advises German companies on strategy. “It is a very slow, very protracted decline. Not of a company, not of a city, but of the entire country and Europe gets dragged down with it.”
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What that looks like is Germany losing more of its energy-intensive manufacturing and exports sliding as unsettled companies rein in domestic investment. As living standards erode, voters cast around for someone to blame.
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