Germany’s decline is about more than immigration: a growing sense of loss

Germany was once presented as Europe’s engine and anchor: politically stable, fiscally disciplined, industrially competitive and rich in jobs and social protections. That model no longer works as it did, this analysis argues, because the country has struggled to adapt to a world for which it was not designed.

The weakness is visible in the economy. Growth remains sluggish, while German industry faces intense pressure from increasingly sophisticated Chinese competitors. The automobile and machinery sectors are particularly exposed. Volkswagen is negotiating cuts of up to 50,000 jobs in Germany after the sector reduced its workforce by 5.3% in 2025.

The country’s reliance on Russian gas turned an industrial strength into a strategic vulnerability. A more uncertain international environment has added further pressure, with wars, trade tensions and energy costs making investment decisions harder. The government has proposed a 500 billion euro infrastructure fund, but the article questions whether the money will transform the economy or merely sustain existing habits for a time.

Politics has become another expression of the strain. Friedrich Merz leads a coalition of the CDU/CSU and SPD that must show whether the political center can still offer answers. Yet reforms take longer to produce results than discontent takes to generate votes.

The article says the AfD’s rise cannot be explained by immigration alone. It also reflects a sense of loss. The coalition faces increasingly difficult trade-offs, including plans to replace the Bürgergeld benefit, which supports 5.5 million people, with a system carrying tougher sanctions and changes to housing protections.