Restructuring Germany’s economy: Challenges and prospects

Abstract

The German economy is assessed to be facing serious and systemic structural challenges, including three major issues: the loss of its cheap energy base from Russia; the changing role of China from a strategic trading partner to a technological competitor; the decline in national competitiveness due to outdated infrastructure, slow digitalization, and persistently low investment. The weakening of the German economy is not a short-term cyclical phenomenon, but rather the result of systemic bottlenecks. The article analyzes the long-term structural challenges facing the German economy, while also showing that the prospect of growth recovery exists but requires strong consensus within the political and social systems.