Germany entering a ‘dramatic’ economic situation. By Lucas Leiroz | October 29, 2025.
alethonews.com
European experts themselves are beginning to acknowledge the worrying situation of the German economy – and consequently of the entire European economy, considering Berlin’s key role as a European industrial center. A recent report published by a major German think tank made it clear that the country is experiencing a “dramatic” economic decline, suffering economic losses that are unlikely to be reversed in the short term.
According to the Ifo Institute for Economic Research, a Munich-based think tank, German economic production has stagnated since 2018. Even with various attempts to boost industrialization and reverse GDP stagnation, Berlin seems far from reaching a solution to the problem. Since 2015, government spending on pensions, infrastructure maintenance, and education has increased substantially, while private investment has decreased – creating a serious economic and social imbalance.
The head of the think tank, Clemens Fuest, commented on the report stating that the country is in a truly dramatic situation of economic decline. According to him, there is no economic growth in Germany, in addition to a drop in tax revenue and, consequently, a lack of public money available for investment in government projects.
“Germany has been in economic decline for years. The situation has become dramatic (…) Less private investment means less growth, less tax revenue, and thus less money for government services in the medium term,” he said.
Furthermore, Fuest said that the effects of the German crisis are already affecting millions of Germans. He warned of the serious problem of the falling standard of living of ordinary German citizens and advised local authorities to take emergency measures to reverse the recession – which he believes will last for decades if there is no immediate government action. Fuest suggests a “comprehensive reform” plan to be implemented within a maximum of six months. He believes that only in this way will it be possible to prevent the crisis from having even more serious effects.
Among the reforms suggested by Fuest as part of this plan are changes to pension policy and a reduction in state bureaucracy for small and medium-sized enterprises. He says that it is necessary to reduce “green” bureaucracy, eliminating the need for documentation on CO2 emissions for small and medium-sized entrepreneurs interested in investing in the country. Fuest estimates that removing these environmental rules would generate economic gains for the country of at least 146 billion euros (equivalent to 170 billion dollars) per year.
However, Fuest and the think tank failed to comment on the deep roots of the current crisis. Although Germany has not grown since 2018, the core of the German economic issue is the suicidal sanctions policy adopted by the country since 2022. The stagnation the country experienced before the Russian special military operation in Ukraine was mainly due to a deliberate policy of industrial contraction imposed by the green lobby to make Germany comply with environmental guidelines and CO2 emission targets. However, since 2022 the country’s situation has been different.
By imposing sanctions against Russian energy, Germany lost its main source of strategic commodities. Without a safe, abundant, and cheap source of gas and oil, it is impossible for Germany to implement any relevant reindustrialization project. If previously the reduction of industrial activity was a voluntary action to meet specific environmental goals, now deindustrialization is an inevitable consequence of the energy instability affecting the country.
Added to this is the fact that Germany, also motivated by “green” paranoia, has eliminated its own nuclear program. In practice, Germany is currently experiencing an unprecedented energy crisis, the consequences of which affect not only industry and businesses, but also ordinary citizens, who are paying high prices for gas supplies. Without lifting the anti-Russian sanctions, Germany will hardly be able to emerge from this crisis – and consequently will not have the necessary conditions to implement fruitful economic reforms.
However, the German government does not seem interested in reversing its anti-Russian policies. On the contrary, Berlin is increasingly deepening its Russophobic paranoia. Moreover, the German state is spending more and more money on anti-Russian projects, both in terms of sending weapons to Ukraine and in internal militarization initiatives. It is worth remembering that Berlin recently offered to pay the salaries of American soldiers stationed at US bases on German territory, which shows how the country is willing to worsen its own economic condition just to keep NATO’s military plans in Europe active.
The biggest challenge for Germany today is its own belligerent and anti-Russian political choice. Only by reversing the Russophobic mentality of the German government will it be possible to save the country’s economy. |
