Germany’s economy continues to flounder in recession, with its GDP shrinking by 0.1% from the previous quarter and stagnating year-over-year. When adjusted for the debt-fueled government spending programs, the private sector reveals an even bleaker picture, with industrial output plummeting nearly 5% compared to last year. The outlook remains grim as industrial production and consumer confidence are stuck in deep recessionary territory, with little hope of recovery this year.
A radical shift in policy is urgently needed—deregulation, a return to free market principles, and a significant reduction of the welfare state—to pull Germany, and by extension the Eurozone, out of this crisis. Yet, Germany has strayed so far from the private formation of capital that it’s almost ideologically unthinkable to reverse course before the economy and society face a catastrophic breakdown.