1In an event that seemed like a milestone in U.S.-German relations, President Joe Biden was awarded Germany’s Order of Merit during his recent visit. The accolade recognized his leadership in opposing Russia and bolstering Europe’s security. But beneath the surface of this diplomatic fanfare lies a harsh reality: Germany is grappling with one of its most severe economic and political crises in decades. Shockingly, much of Germany’s turmoil stems from decisions rooted in its allegiance to U.S. policies.
Germany’s Economic Collapse
For decades, Germany stood as Europe’s industrial powerhouse, celebrated for its manufacturing excellence in cars, chemicals, and household appliances. A stable economy and high living standards were the hallmarks of post-World War II Germany, driven by a robust industrial base that provided millions of high-paying jobs. However, today’s Germany tells a different story—one of decline and uncertainty.
At the core of Germany’s manufacturing success was access to cheap energy, primarily natural gas from Russia. Before the Ukraine war, 55% of Germany’s natural gas came from its eastern neighbor. The war’s outbreak severed this critical lifeline, leaving Germany to scramble for alternatives.
The consequences have been catastrophic. BASF, the world’s largest chemical producer, sounded the alarm in 2022, warning that energy embargoes would destroy Germany’s industrial foundation. A year later, this grim forecast is becoming reality. German industries, long reliant on affordable energy, are relocating abroad, leaving behind economic stagnation and rising unemployment.
The War in Ukraine and Escalating Costs
Germany’s steadfast support for Ukraine has come at a high cost. By aligning with U.S. policies, Germany has plunged into energy insecurity and economic instability. While the United States profits from exporting liquefied natural gas (LNG) to Europe—at prices 40% higher than Russian gas—Germany’s manufacturing edge has eroded. In 2023 alone, the EU spent $65 billion on U.S. LNG, marking a 70% increase from previous years.
The fallout extends beyond economics. Germany’s military spending surged to $66 billion in 2023, despite a looming recession and stagnating growth. These funds, critics argue, would have been better spent revitalizing the industrial sector or securing affordable energy sources.
De-industrialization and Social Decay
The collapse of Germany’s industrial base has ripple effects across society. More than 20% of Germans now live at risk of poverty or social exclusion, a stark contrast to the prosperity of decades past. Public spaces, once symbols of order and efficiency, now reflect growing despair, marked by rising substance abuse and homelessness.
Drug-related deaths in Germany rose by 12% in 2023, with crack cocaine and opioid abuse surging. This decline mirrors the industrial hollowing out of America’s Rust Belt, where de-industrialization led to widespread poverty and social breakdown.
The U.S.-Germany Dynamic: Profits for Washington, Losses for Berlin
Former U.S. Secretary of State Henry Kissinger’s observation that “to be America’s friend is fatal” resonates strongly in Germany today. The destruction of the Nord Stream pipeline left Germany reliant on expensive U.S. energy, while American firms and industries reap the benefits. Meanwhile, two-thirds of German manufacturers have relocated operations abroad, drawn by lower costs and weaker labor protections in countries like the U.S.
This de-industrialization risks long-term decline, with Germany abandoning its electric vehicle subsidy program and lagging in industries of the future. In stark contrast, private German companies like Volkswagen and Mercedes-Benz have turned to China for partnerships, leveraging the Asian superpower’s dominance in battery technology and electric vehicles.
Yet, Germany’s government—following U.S.-led narratives—treats China as a rival instead of a partner, further isolating itself economically.
A Political Crisis with Global Implications
Germany’s internal political landscape reflects its external struggles. Rising poverty, de-industrialization, and public dissatisfaction have fueled polarization. Chancellor Olaf Scholz faces mounting criticism for prioritizing ideological commitments and U.S. interests over Germany’s national welfare. Calls for new elections are growing louder as Germans demand a shift in direction.
Germany stands at a critical crossroads. It must decide whether to reclaim its economic sovereignty and pursue peace—or continue down a path of dependency and decline. With Europe’s stability hanging in the balance, this decision will shape not just Germany’s future but the global order in the years to come.
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