With that cut off, costs have soared, hollowing out the industrial base. Even worse, Germany complacently closed down its nuclear industry, and refuses to contemplate fracking (even though the Ruhr has as much shale gas as anywhere in Texas or Canada).
A hyper competitive Poland right on its border is now building the nuclear generators it needs to fuel factories that are gaining ground on German rivals.
Finally, the euro is no longer the advantage it once was. When the single currency was launched in 1999, the Deutschmark locked in an artificially low exchange rate. Coupled with wage restraint, that allowed German factories to effortlessly undercut rivals in France, Italy and Spain.
Much of the rest of the continent was ruthlessly deindustrialised, but Germany boomed. It was great while it lasted, at least so long as you were a worker in Stuttgart instead of Seville. After two decades of painful adjustment, however, that process has come to an end. Indeed, countries such as Greece that suffered mightily from German competition are now out-performing it.
None of those trends can be reversed easily. The debt brake stops the government from spending, and there is no sign that the hapless coalition led by chancellor Scholz has any idea how to create a leaner, digital, entrepreneurial economy.
Instead, the Greens prevent it from working out how to lower energy costs, and the trade union dominated Social Democrats prevent it from winding down traditional heavy industries. The result? Years of stagnation lie ahead.
And a weak Germany means a weak Europe. The stagnation of its major economy poses two major problems for the whole of the bloc. The major driver of growth – which was pretty feeble to begin with – is stalling.
Sure, Greece and Portugal are doing a lot better, but they will never be the locomotive for the whole continent. Without the German engine, the whole zone is condemned to another decade of zero growth.
What’s more, Germany was the paymaster for the entire European project. France doesn’t expect to pay any bills, and Italy can’t afford to.
The result? Plans for huge spending on “green industries” will come to nothing. The EU will descend into undignified squabbling. The continent was propelled by a healthy German economy. Without it, the outlook will soon turn very bleak.
