Recently the German economic minister declared that the country’s economy is doing “Dramatically Bad.” Out of all the major economies in the world, Germany’s GDP did the worst in 2023, shrinking by just 0.3%. Even worse, there is no indication that this dire scenario will get better. There were optimistic projections that growth would resume at a rate of 1.3% in 2024. Surprisingly, though, the German government is obliged to reduce this estimate to just 0.2%. This is not a transient recession, but rather a more serious structural issue with the German economic system. If you think that this is an exaggeration understand that a plethora of German companies have left Germany or at least partially relocated abroad with most sighting sky-high energy prices inflation, over-regulation, and endless political debates as their reasons for leaving. What or who is causing this catastrophic collapse of Germany’s long-standing economic and industrial prowess? The reality is far more terrifying than what the media has been presenting to us. The startling reality is that Germany continues to make mistakes in its efforts to address its economic issues while also being exploited by the United States. Germany’s economic crisis is caused by the following three key factors.

1)      Germany’s sky-high energy prices, which have played a tremendous role in the country’s dramatic decline. Following the Russian invasion of Ukraine in 2022 Germany and the EU introduced sanctions against Russia while Russia responded by sharply decreasing its delivery of natural gas to Europe. This skyrocketed Germany’s energy prices and severely damaged its economy. This is because before the invasion Germany imported an astounding 55% of their gas from Russia, and it’s precisely this cheap Russian gas that has been so important in enabling Germany to become an industrial and economic powerhouse. Of course, sanctioning your main energy supplier was never the smartest choice to begin with. The fallout cannot be understated. When the Ukrainian war started the market price for natural gas increased more than tenfold, while households and smaller businesses were somewhat protected from this massive spike through policy measures such as the infamous “gas price break” household gas prices still tripled at the worst point of the energy crisis in 2022. And even though gas prices have since come down they are still around double of what they were before the war. And shockingly it is estimated that this will remain the new normal for the foreseeable future. Thus, Germany’s price of electricity much of which is produced in gas power plants has fared even worse. Prices have been spiking ever since the war broke out and this trend hasn’t slowed. By now Germans pay some of the highest electricity prices worldwideIt is easy to understand why Germany’s industrial and economic dominance has fallen so quickly. Moreover, because Germany has the largest economy in Europe, when it falters, the EU falters too, and the consequences spread throughout the whole continent. Furthermore, the current lack of investment in Germany is having a dramatic effect on working communities; in the very industries that brought Europe to its current state, companies are closing and jobs are being eliminated. Needless to say, Germany and the EU were forced to find alternative and frankly far more expensive sources. One of those sources was the US which sold it to them at astronomical prices leading Germany and other nations to complain and accuse the US of profiting off the war and making Europe dependent on its gas. However, the US role in Germany’s energy crisis is much bigger than just ripping off the Germans Not only did the US openly wish to wipe out Germany’s energy relationship with Russia but the US shares significant blame for causing this war which led to Germany’s crisis in the first place. In other words, whether or not you believe Russia’s invasion of Ukraine was justified, it’s undeniable that it was sparked to a significant degree by NATO’s decades-long expansion eastwards, and in particular its potential expansion into Ukraine. This is because it’s widely understood that Russia perceives NATO’s eastward expansion as an existential threat to its existence. Russia is very clear that expanding to the Russian borders such as the case in Ukraine is a red line that cannot be crossed. Despite this, the US and its allies have always welcomed and even encouraged its expansion in what is commonly referred to as NATO’s open-door policy. Despite Russia’s adamant and persistent opposition, NATO’s borders have gradually drawn closer to its borders ever since the Soviet Union fell. There are several examples, including the time Russian President Boris Yeltsin attempted to get US President Bill Clinton to promise that NATO would not include any more former Soviet Union nations in 1997. Naturally, Clinton declined. Additionally, Lord Hastings Ismay, the organization’s first secretary general, is credited with saying that “the purpose of NATO is to keep the Americans in, the Germans down, and the Russians out.” Russia’s general sentiment towards NATO and its expansion was perhaps best captured by Russian President Vladimir Putin who in December 2023 at a news conference stated “You promised us in the 1990s that NATO wouldn’t move an inch to the East. You cheated us shamelessly”. However, once again Germany shares the blame again. Germany’s establishment in virtual lock step with the US has been one of the biggest cheerleaders for severing its energy ties with Russia, and once again even though numerous experts have advised against this warning it would lead to the utter demise of the German economy and industry. Germany passionately declared it should only do business with countries that are democracies and share the West’s superior democratic values, unlike those evil authoritarian dictators. From that point on, the German government scored goal after goal. German politicians triumphantly decided to close the nation’s final three nuclear power reactors, not because they were malfunctioning but rather because they had a long-standing antipathy for nuclear energy, following sanctions on Russia that resulted in the country losing its primary energy source. Naturally, this made the energy issue worse and worse. Eventually, Germany began pleading with other countries for natural gas, which it now pays for at a far higher cost. It’s just incomprehensible that Germany would pointlessly punish and enrage its primary energy provider, who provides 55% of its gas, while simultaneously adhering to ideology so steadfastly that doing business with like-minded nations takes precedence over preventing your citizens from freezing to death during the winter. It seems improbable that the German government will go off track and create workable answers to this massive energy problem.

Siegfried Russwurm head of the BDI the umbrella organization of the German industry said that “the German government argues endlessly and almost dogmatically about the problems instead of coming to solutions together and discoursing of factual arguments. This has led to uncertainty among companies and citizens alike”.                         

2)      Germany’s reduced exports to China. Until recently Germany was Europe’s exporter of machinery, cars, and chemical products. Until recently China has been Germany’s trading partner every single year for the past eight years. Including being an essential and massive export market for German goods. Simply China’s market is indispensable to Germany’s economy. However, the US is actively attacking this important partnership. Think about Volkswagen and BASF, two of the biggest businesses in Germany in terms of yearly revenue and consequently two important drivers of the German economy. The US government forced both companies to close their factories in China’s western region in 2024. For many years, the US and its military-industrial complex have promoted the myth that China has forced labor and ethnic cleansing on the local Muslim population, even though there is abundant evidence to the contrary. Allow me to demonstrate the mechanism of coercion used by the US administration. Initially, the “Interparliamentary Alliance on China” threatened to harm BASF. This is an international group of Western politicians founded by anti-China hawks, and its purpose is to pressure governments into containing China.  The “Interparliamentary Alliance on China” is funded by the National Endowment for Democracy which is a CIA front, and its objective is to finance regime change operations in countries deemed to be hostile to the US. It also is funded by George Soros’s “Open Society” whose purpose is to help counter the threat China’s growing influence poses to the rules-based order.    

The threat BASF received read as follows: “The credibility and integrity of your company are at stake, and we believe you must take swift and decisive action in addressing this matter”. There is no need to elaborate when a company or a country does not comply with the US government or the CIA’s wishes. Not surprisingly, these two institutions sent their ultimatum to BASF to leave China or face commercial and financial consequences. BASF has always conducted regular due diligence measures ever since opening factories in China including internal and external audits. Yet has not once found any evidence of any human rights violations. Finally, BASF pulled the plug on its operations. Furthermore, the USA executes the same playbook with other big German companies like Volkswagen, Audi, Siemens, and many others.

The US is pressuring everyone from companies to countries to fall in line and do the same even if it will destroy their economy. If you refuse or show reluctance the US government employs threats coercion, and even sanctions. For example, in 2022 the US government banned the sale of advanced microchips to China in  order to cripple China’s growing microchip industry. It then coerced chipmakers across the world to comply. One of the most notable examples is the Dutch Semiconductor company ASML. This has hurt chipmakers significantly including American ones such as Nvidia as China has typically been their biggest customer and represents a huge portion of their revenue. It also must be pointed out that companies coerced into pulling out of China have led to major job losses in China. Thus, it also hurts local workers the most because they have lost their livelihoods.    

As much as the US is to blame here astonishingly almost all of Germany’s political elite mainstream media and the general population have eagerly obeyed America’s wishes to demonize and decouple from China. Of course, this is stupid from the side of Germany because that decoupling will destroy the German economy. However, the sad truth is that much of Germany, especially its political and media establishment has a long history of blindly talking about US foreign policy narratives at face value even when they are the ones getting screwed. The best example is the bombing of the Nordstream pipeline, whose sole purpose was to transport natural gas from Russia to Germany, and the rest of Western Europe.  After all, Joe Biden had said that if Russia invades Ukraine, there will be no Nordstream because America will put an end to this project. Also, the severing of Germany’s energy dependence on Russia has been a long-standing openly stated American objective. Also, investigative journalist Seymour Hirsch published a bombshell report that meticulously describes how the bombing was planned, prepared, and executed by the US. You would think that this would have dominated German News but shockingly in the aftermath of the bombing this received virtually zero airtime. Instead, German media uncritically repeated US Government denials and focused on destroying Hirsch’s reputation. Sadly, most Germans naively believed that Western countries are just not capable of such agrarian acts, much less war crimes because they are democratic, and they have Western values. In short, Western nations are the good guys and they would never do such a thing.     

3)      Germany’s increase in military expenditures is accelerating its decline as well. Over the past decade, Germany has increased its military spending by 42% according to a new report commissioned by Greenpeace. But given its new economic dilemma and industrial collapse Germany cannot afford to continue throwing money at its military because the money is desperately needed elsewhere. The Greenpeace report highlights that spending it almost anywhere else yields a better ROI in terms of economic growth and job creation to name a few. And once again the US is squarely to blame here. A key driver of Germany’s increased military expenditures has been the war in Ukraine which as it is explained the US shares considerable blame for. But it has also been driven by the US’s recent erratic policies towards NATO. President Trump frequently threatened to withdraw from the treaty during his administration, and he came dangerously close to doing so during the 2018 NATO summit in Brussels. Trump recently threatened to incite Russia to attack European partners if they failed to reach NATO-mandated military spending targets. Trump has always seen NATO as a European freeloader that uses American resources without paying its fair share. After consistently failing to meet this goal, Germany has now effectively been coerced into raising military spending by the EU and Germany out of concern that the US may eventually become less dependent on it for projection.