Few western countries have seen their image abroad decline in recent years as much as Germany has. Once admired for its engineering prowess and putative efficiency, the country is now viewed as a giant with feet of clay. Germany’s role in both the 2008 global financial crisis and the subsequent one in the Eurozone, where Berlin amply glossed over the foolhardy investments of German banks while upbraiding less fiscally disciplined countries, was the first crack in the edifice.
The delay by nearly a decade in opening Berlin Brandenburg Airport did further damage, and when visiting football fans at the Euros earlier this year discovered the debacle that that Deutsche Bahn, the country’s once-prized rail network, has degenerated into, the stereotype of German efficiency was well and truly turned on its head.
Journalist Wolfgang Munchau, a former Financial Times columnist, chronicles the decline of his native country with acerbic aplomb in Kaput. He diagnoses the root of the problem as institutional complacency among both German businesses and successive governments, a failure to adequately plan for a changing world, and cleaving to an outdated reliance on exports, the boom years of which have proven to be merely a stay of execution.
Munchau decries underinvestment in the digital realm and a sclerotic bureaucracy that discourages high-skilled immigrants from settling in the country (or high-skilled Germans from staying). Germany thought that its exports of high-end consumer goods and engineering products would keep it perpetually in clover, leading it to develop a dangerous reliance on cheap Russian gas that was compounded by the folly of its phasing-out of nuclear power. Much of Germany’s elite, most notably former chancellor Gerhard Schröder, was effectively captured by Moscow, or, in the case of the auto sector, by China.
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The West in general has been proven extremely naive in its expectation that trade would liberalise China, and Germany has been the greatest patsy of all, effectively betting the house, as Munchau puts it, on exports to Beijing. German car-builders, having long neglected electric cars, are now finding themselves outstripped by Chinese competitors, both in China and internationally. The current crisis at Volkswagen, which is expected to close three factories after years of underperforming masked by illegally rigging emissions rates, is the perfect embodiment of the confluence of fallacies outlined by Munchau.
