Collapse is coming to Germany

Do I sound pessimistic? Not really! Any observer can detect number of signs over the horizon indicating slow but steady collapse of Germany is on the way. Pity that neither rulers nor the ruled read these obvious signs. Let me enumerate few:

My search is limited to economics and geoeconomics. When we say economics it covers mainly the domestic side whereas geoeconomics include both domestic status as well as international status. Here we go:

1. Dwindling propensity towards manufacturing and over emphasizing service sector is key indicator. Promoting service industry which by and large has become the mainstay at 70% of the GDP is the first warning sign. Loss of manufacturing capacity emerges due to neglect, diversification and establishing new factories that have ability to process raw material imported from elsewhere. Look at the EV industry. Nearly 39 of the 46 most relevant raw materials needed for this industry are imported. It is indeed double whammy!  In sum, domestic manufacturing eroded, dependency of input materials enhanced thereby it makes a dent in Germany’s geoeconomics clout.

2. A country creates wealth to strengthen domestic economy as priority and to enhance its own currency as follow-up matter. After getting rid of Deutsche Mark, Germany led herself and others into Eurozone whereby a common currency is being empowered often at the expense of the German public. This financial burden is very high indeed as it affects the quantum available for social security and other domestic welfare matters. Granted though this burden in a way avoids currency fluctuation of Euro the tangible benefit to German public is much less.

3. The debate between which is better, planning or innovation has not brought so far a worthy conclusion. Export drive with innovation & technology as focal points has forced Germany into rat race with China who has the capacity to duplicate, revers engineer and come with a more efficient product turned out at lesser price than the one Germany could afford to sell abroad. A proper planning process should be initiated that could spread risk among several sectors including farming, agriculture, animal husbandry, food processing, along with constriction of apartments, amenities and roadways.

4. A via–media has to be found between the extent Germany should be industrialized compared with the enhancement of human capital that needs to be sustained and developed. A good example is how much is robotics and how much is human welfare. The last thing any planner would allow is social degradation. A cursory glance shows the widening gulf between the Wessis vs Ossis. Instead of funnelling more funds to develop non-German European nations, the ruling coalition of CSU, CDU & SPD should do the utmost by bringing former citizens of East Germany into the mainstream.

You need not be a rocket scientist to discern that the points I have raised are definite signs of an impending collapse in terms of economy within and geoeconomics without. Navigating strategy amid geoeconomics is the vital necessity for the present day Germany to avoid such collapse.

 

Cheers!

 

Muthu Ashraff Rajulu

Strategy Adviser

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Strategy Adviser