‘Germany is in decline’: a manager’s verdict on the Merkel era

Germany’s leading top managers have long kept silent or opportunistically acquiesced in the anti-capitalist environmental policies of the past two decades. The boards of major automotive

companies – including VW and Mercedes-Benz – applauded the “energy and mobility transitions” initiated by Angela Merkel. At the same time, they failed to speak out against the mistakes, such

as the ban on the combustion engine from 2035.

But now, many have had enough. Some have even decided to speak out. One of Germany’s best-known business executives, Wolfgang Reitzle (formerly of BMW, Ford and Linde), did so in the

clearest of terms last week. In an article in the German daily Die Welt, he declared, “Germany is in decline.”

His critique is persuasive. Productivity improvements have been Germany’s hallmark for a long time – but unit labour costs have been rising for years now. “Germany is no longer among the top

ten countries in Europe in terms of gross domestic product per capita. We fell out of the list of the 20 most competitive countries in the world.”

Germany is currently governed by a coalition of two left-wing parties, the SPD (Social Democrats) and the Greens, together with the market-oriented FDP, which is trying to prevent the worst

from happening. Reitzle, however, does not lay all of the blame on this government alone. Above all, he believes, the decline has its roots in the era of Merkel, who ruled Germany from 2005

to 2021: “16 years under Chancellor Angela Merkel were too much even for a country as strong as Germany,” says Reitzle, adding, “During the Merkel era there was not a single structural

reform that would have made the country more efficient. However, two fundamental decisions will have a lasting impact: the energy transition and opening the borders to uncontrolled

migration.”

He accuses Germany of having massively expanded its welfare system while failing to invest in the future. For a country as rich as Germany, Reitzle continues, the infrastructure is in a

“disgraceful” state. He also criticises the EU’s policy of constantly imposing new regulations on European companies. As an example, Reitzle cites the leading chemical company BASF, which

has to contend with 14,000 pages of chemical industry regulations.

The flaw in Germany’s energy and climate policy is the maxim: “All Electric – Renewables Only.” However, delivering on this policy would mean more than doubling the amount of electricity

generated, and doing so quickly. Capacities for wind and solar power would have to be more than quadrupled. Because wind and solar power are highly volatile, we would need huge storage and

back-up capacities. “However,” Reitzle explains, “this is neither technically feasible nor affordable for a country like Germany. It is simply insanity.”

In addition to Merkel, Reitzle’s criticism is also directed at the Economics Minister, Robert Habeck of the Greens: “Habeck’s ‘Renewables Only’ plan will fail. He and the Greens, together

with a large, quasi-religious community of left-wing environmentalist journalists, are on an ideological journey that can only mean gigantic losses of prosperity in Germany.”

Rainer Zitelmann is the author of ‘In Defence of Capitalism’ https://in-defence-of-capitalism.com/

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