For decades Germany was considered to be the economic growth engine of Europe generating growth between 2% to 4% per year. But growth has slowed sharply since 2000, averaging about 1% per year. In the 2024 IMD World Competitiveness Report, Germany continued to slide and is now ranked 24th out of 67 countries. The relative stagnation of the German economy is due to various factors: • Bureaucratic obstacles—complex regulatory frameworks and lengthy approval processes are stifling entrepreneurial initiatives, making it difficult for businesses to adapt swiftly to changing market conditions. • An aging population—this poses significant challenges for its workforce and productivity. With a shrinking labour pool, industries face rising costs and pressure to automate. • High energy prices—the country’s dependence on imported energy, particularly natural gas, has made it susceptible to price volatility. This undermines German competitiveness. • Low public investment—partly the result of strict fiscal rules (the “debt brake”) imposed on government, public spending has accounted for just 2.8% of GDP—below the EU average of 3.6%. • Outsized government—the…