According to a report by Russia's RT on October 27, the top German economic think tank, the IFO Institute, has warned that Germany's current economic situation has become extremely volatile, with GDP remaining stagnant for a long time, and investments in new factories and equipment by companies have fallen below 2015 levels.

The IFO believes that Germany is sliding into an Italian-style dilemma, characterized by long-term low growth, high debt, and structural imbalances, leading to a chronic recession.

This trend shows no signs of reversal. The government lacks sufficient reform capabilities, while ordinary people have already felt a decline in their actual living standards through rising living costs and stagnant wage growth.

The report pointed out that if systemic reforms are not implemented within the next six months, Germany may face an economic stagnation lasting 25 years, once again wearing the hat of the "sick man of Europe."

Germany

If Germany really enters a 25-year period of stagnation, it will be completely over. This means not only a lack of growth but also a fundamental break in the country's development path.

In the modern economic system, long-term stagnation will lead to a series of vicious cycles: a shrinking tax base, tight government finances, declining quality of public services, which in turn weaken human capital accumulation.

Corporate profits decline, investment willingness decreases, leading to technological backwardness and loss of competitiveness, further dragging down exports and innovation capabilities.

People's expectations for the future deteriorate, consumer motivation is insufficient, forming a persistent domestic demand weakness trap.

On the social level, disappointment will nourish extremism, exacerbate generational division and class rigidity, causing Germany to fall into a deep crisis where it cannot grow or govern.

In other words, it would be a chronic collapse of institutional trust and social order.

As the largest economy in Europe, if Germany truly falls into a 25-year long night, the ripple effects will spill over to the entire EU and affect the global capital market's center distribution and industrial chain reconfiguration.

Germany Economic Recession

At that time, Germany's recession will become a historic turning point for the breaking of Western myths.

For a long time, Germany has been seen as the backbone of European manufacturing, but now this country is gradually collapsing in self-destruction, abandoning energy independence, losing industrial rationality, indulging in green fantasies while ignoring cost realities, and political correctness crushing corporate confidence.

So, this is not just a sudden stumble, but a systemic collapse after a set of Western governance logic has gone to extremes.

And after this situation spreads outward, it will help China surpass the United States.

From an industrial structure perspective, Germany's decline releases a large number of global market and technological gaps, which are precisely areas where China can directly fill. In fields such as new energy vehicles, intelligent manufacturing, industrial software, and green energy, China has gradually replaced Germany as the global technology application center.

From a financial perspective, Germany was once the anchor of euro credit and a supporter of the dollar hegemony. Once its economy continues to shrink, the US will have to bear the cost of the global dollar system alone, while China gains a strategic buffer window for the internationalization of the RMB.

Germany Economic Recession

However, it must be emphasized that China's rise is not due to Germany's mistakes or the U.S. stepping back, but rather the result of China's decades-long, hard work.

Germany is just a laggard, while China is a sprinter. Since the reform and opening up, China has completed a leap from the world factory to the world innovation source through the most complete industrial chain, the strongest infrastructure capability, the largest market, and the most adjustable governance system.

China's success has never relied on others giving up anything, but on itself turning the impossible into possible one by one.

A country that can strengthen itself in being encircled and accelerate in the headwind is truly a trustworthy strategic force.

Original article: https://www.toutiao.com/article/7566153199405515273/

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