Hate is not a substitute for policy as the Germans should have learnt from their Nazi Third Reich. They obviously didn’t.
Mathew D. Rose is an Investigative Journalist specialised in Organised Political Crime in Germany and an editor of BRAVE NEW EUROPE
Photo: Twitter German Chancellor Friedrich Merz leading Germany to victory on all fronts
It is conspicuous that while in US media the current economic situation in Europe is seen as grim, especially in Germany, France, and Britain, in European mainstream media the topic is relatively ignored. Europe’s disregard of this reality is comparable to its delusional behaviour regarding NATO’s defeat in its proxy war in Ukraine.
Germany is the largest and most important economy of the European Union accounting for round a quarter of EU GDP. It is regarded as the motor of the EU economy.
Fact is that since 2019 the German economy had hardly grown which becomes more obvious when compared to the rest of Europe and the US:
The above graph is rather generous. The current GDP of Germany is lower than it was in the third quarter of 2019. The above calculation is based on the fourth quarter where a small drop in GDP had occurred and rebounded in the next quarter. In other words, the German economy has not grown at all since the third quarter of 2019!
Currently Germany could be facing a third consecutive year of contraction for the first time in its post-war history. A third consecutive quarter of recession is likely, assuming that the German Office of Statistics (DeStatis) does not falsify the data to produce no growth or an increase of 0.1 percent, something I have suspected it has done in similar situations in the past.
The German economy has gone into reverse especially since the United States blew up the Nordstream pipeline at the end of September 2022 while other Western economies have grown, explaining the uppermost graph.
Germany’s economic success has in the past two decades relied on an aggressive mercantile policy of massive export surpluses.
That may be changing. The newest report by DeStatis was horrendous. In global trade, Germany’s export surplus fell in the first seven months of this year by €32.7 billion or 21.2% to €121.3 billion. Germany’s exports have been in decline since September 2022 with the loss of cheap Russian gas and oil that had provided it with a competitive edge on the world market.
This is only the beginning. The affects of the new US tariffs will become increasingly visible in the next couple of quarters. The situation could be further aggravated should the EU decide to introduce or increase its tariffs for nations like China and India as the US is demanding.
US Tariffs are especially relevant for Germany. The United States became Germany’s most important export nation replacing China in 2024, with round ten percent of German exports going to the US and providing Germany with a 70 billion euro trade surplus in 2024. This is now rapidly in decline. In July of this year exports (11.1 billion euros) to the US had fallen 7.9 percent compared to the previous month. That was the fourth month-on-month decline in a row and the lowest amount since December 2021. In the first seven months of this year Germany’s trade surplus with the US fell 15,1% to €34.6 billion, the lowest level for the first seven months of a year since Covid year 2021, despite a pre-tariff surge in January and February.
The situation for Germany will not improve. Initially relieved that the US had reduced tariffs for the EU to fifteen percent, Trump however announced a doubling of tariffs on imported steel and aluminium to 50 percent in June. This tariff affects foreign industrial imports of motors, tools and agricultural and construction equipment. Purportedly machinery accounts for some 30% of Germany’s exports to the United States.
Another problem for Germany’s exports to the US is the strong euro, especially against the US dollar:
In addition to tariffs, this has added almost a further almost twenty percent to the price of German imports for Americans, resulting in an additional dampening of demand.
One might expect that due to the strong euro reducing the cost of imports German inflation would be decreasing. The opposite is true:
The newest figures in from DeStatis revealed that in September inflation increased still again from 2.2 percent in August to 2.4 percent.
Another blow for Germany is that exports to China have been inexorably falling over the past four years:
while imports from China remain robust:
Germany’s import surplus in foreign trade with the People’s Republic of China amounted to €47.7 billion, an increase of €16.7 billion, or more than half (+54.1%), compared with the same period last year.
Germany’s export surplus also declined significantly with other countries from January to July 2025. After the USA, Mexico followed in the ranking of countries with the largest absolute decline in export surpluses with -1.8 billion euros (-32.6% compared to the same period last year), Italy with -1.6 billion euros (-19.5%) and Canada with -1.5 billion euros (-41.0%). This meant that the export surplus with Mexico amounted to €3.6 billion, with Italy €6.6 billion and with Canada €2.1 billion.
This is already affecting jobs. In August the number of unemployed in Germany was over three million (6.4 percent) for the first time since February 2015.
Foreign policy has added to Germany’s economic downturn. This has not only been caused by the NATO proxy war in Ukraine and sanctions against Russia, but its political policy towards China. After Germany’s previous foreign minister, Annalena “Butcher” Baerbock, led repeated political attacks against China including an interview with the US broadcaster FOX, labelling Chinese President Xi Jinping a ‘dictator’, chancellor Merz has repeatedly called for German firms to reduce their reliance on China, emphasizing that future trade relationships should be with markets considered more stable and secure, such as the United States and Latin America.
Both the Christian-Democrat chancellor, Friedrich Merz, and Social-Democrat Finance Minister, Lars Klingbeil, at the helm of government are considered to have little competence in economic matters and not to be terribly intelligent. They are propagating massive austerity as a way out of the current crisis. Tax increases are not being considered, instead a reduction in corporate tax from 15 percent to 10 percent by 2032. Thus Germany is continuing the same economic neo-liberal policies that have caused the current crisis.
The government coalition is placing its bets on a one trillion euro spending spree on defence and infrastructure. Of course this violates the EU Stability and Growth Pact limiting member nations’ budget deficit within 3 per cent of GDP and public debt below 60 per cent of GDP. Germany not only threw its own strict debt rules out of the window but also dictated to the EU that defence spending at a level that was coincidentally the same level the Germans are initiating, would be exempt from these rules. Of course the other EU nations obediently acquiesced to their hegemon. Germany is expected to exceed EU debt rules the moment it starts spending its €500bn infrastructure fund, but by then Germany will surely arrange a further exemption.
The NATO proxy war is draining the government budget with Germany having provided Ukraine with aid worth just under 44 billion euros since February 2022 according to the German government. Merz would like to compensate this expenditure by plundering billions of euros from frozen Russian state assets. If a peace is ever concluded to the proxy war, this will have to be repaid, which might be a further reason why Germany is so vehemently against a peace agreement.
These war costs do not include the damage done to the German economy due to the loss of relatively cheap Russian gas, that had successfully powered the German export industries for two decades. This has now been replaced by significantly more expensive LNG. Previously, long-term contracts with Russia ensured adequate supply and stable prices, whereas LNG markets are subject to international demand and supply fluctuations, such as a a 54.84% increase from January 2024 at the beginning of 2025. This has however not only hit German industry, but also its domestic heating and electricity prices, resulting in dissatisfaction among a large swath of the German populace.
The economic problems of Germany keep piling up resulting in increased social hardship. The current coalition of Christian and Social Democrats, realising they have no fix for these problems, instead making the situation worse with their neo-liberal policies, keep trying to paper over the cracks by talking up a Russian military threat. Despite the inherent German Russophobia, an integral part of German fascist socialisation, many Germans do not appear to be convinced. Even the early German fanaticism for NATO’s proxy war in Ukraine is declining as the political reality of the endemic corruption and neo-Nazi political power there become increasingly visible, not to mention the myriad domestic problems of Germany.
Friedrich Merz appears to have a personal interest in the remilitarisation of Germany. Like Butcher Baerbock, his grandfather too was an avid Nazi. The mindset of this generation of Germans hoping to succeed where their grandparents’ generation failed, forsees the reinvigoration of a now decadent German society through the virtues of Nazi policies including strong armed forces including compulsory military service. Social Democrat Defence Minister Boris Pistorius declared last year that his goal is to make Germany “fit for war” (“Kriegstüchtig”).
The problem is that many young Germans do not see the world like old German men such as Merz and Pistorius with their nationalist fascist world view. Already too few young people are volunteering to serve in the German armed forces. The Social Democrats know they would see a radical drop in support if conscription is introduced and blocked this move by the far-right Christian Democrats. The first step however has been taken as the government proposed that all 18-year-old men would be required to fill out a survey to assess their suitability, availability, and willingness to serve in the armed forces. Germany’s economy however will not be saved with more soldiers and ramping up the production of tanks. German government arms procurement and military is slow, overly bureaucratic, and extremely corrupt.
The government’s half a billion euro infrastructure investment remains equally unclear. As part of its austerity programme to keep a balanced budget Germany neglected its infrastructure over decades. Already in 2024 it was estimated that 600 billion euros were needed to bring Germany’s infrastructure back up to scratch. Germany that prided itself in its railways has invested little in the past years:
One should add that France and Spain had previously invested heavily in their successful fast-train networks and today need to invest much less.
What the German government plans with regard to infrastructure investment is unclear – if it has any plans at all. Here too corruption of a political class losing power will be a negative factor in creating a positive economic effect.
In short, Germany’s authoritarian liberal political class has no real solutions for its economy. For anything for that matter. Voters realise this, which explains the poor showing of the current coalition in the polls. Both the far-right Christian Democrats and centre-right Social Democrats have lost ground since the general election earlier this year. In most polls another far-right party, the AfD, has surpassed the Christian Democrats. This does not mean that the other parties in the Bundestag have any solutions for Germany’s current problems. They all have retreated to traditional fascist German policies of hate: “immigrants” (anyone with dark skin), the Russians, and of course the Zionist holocaust in Gaza, which the German government fanatically supports. Ironically, much of the German population also hates the ruling political class, especially Merz. But hate is not a substitute for successful policy as the Germans should have learnt from their Nazi Third Reich. They obviously didn’t.
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