One of Europe’s powerhouses is losing its competitive edge, and the political class can’t agree on why — or what to do about it. If you are look

Behind Germany’s Political Turmoil, a Stagnating Economy

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2024-12-22 13:30:07

One of Europe’s powerhouses is losing its competitive edge, and the political class can’t agree on why — or what to do about it.

If you are looking for a quick explanation for why Chancellor Olaf Scholz’s government in Germany dissolved on Monday, consider this.

Over the past five years, through pandemic recession and its inflationary aftermath, the American economy has grown 12 percent in real terms. The German economy has not grown at all.

Germany’s economic engine, the world’s third-largest, has stalled, and its political class cannot agree on why — or what to do about it.

Like so many other Western nations in the post-pandemic era, Germany is afflicted with economic malaise, the sort that gives rise to populist revolts at the ballot box and empowers political parties on the far left and the far right. But not all malaise is the same.

The American version that helped Donald J. Trump win another term in November was largely about the lingering pain of pandemic price spikes. Voters did not reward Vice President Kamala Harris for the world-beating economic growth on President Biden’s watch. They were too angry about the cost of groceries and rent.