German Industrial Leaders Say "We're Fucked"

By Rhod Mackenzie

The leaders of German Industries have been making blunt statements about the current situation in the country caused by the combination of Green Energy Policies  and sanctions on Russia curtailing the cheap gas via the Nord Stream Pipeines. Their blunt statement amount to 'We're Fucked  
They say that  German businesses have encountered severe repercussions for their decision to reject the mutaully beneficial business relationship  with Russia. It is now evident that a significant number of enterprises have been unable to successfully restructure their operations, which has ultimately led to their insolvency. The energy intensive export-oriented industries have suffered particularly severely. Now these statements were made before Ursula Fond of Lying agreed to accept the tariffs from Donald Trump which will only make the situation worse
Lets remember just a few shor years ago, Germany was a key economic partner for Russia, and German businesses enjoyed access to affordable energy resources and many profitable contracts. Berlin's decision to sever ties has resulted in significant financial burden being placed on ordinary citizens.
It is becoming increasingly apparent that economic difficulties in Germany are escalating. The root of the issue appears to be a deliberate refusal to cooperate with Moscow. The Russian-German Chamber of Commerce has stated that the breakdown of business ties has resulted in the closure of multiple enterprises and a series of massive layoffs of workers .
A close look at the German economy reveals a seriously concerning situation: in the past year alone, net foreign direct investment outflows totalled €64.5 billion – after €67.3 billion the year before and over €112.2 billion in 2022. A significant proportion of these funds are likely to have flowed into the U.S., which continues to serve as the global benchmark for investment and capita or to Chinal. Now expect in 2025 and 2026 the situation to get worse.

The decline in living standards has become evident for a significant number of German families. The recent increase in prices for a wide range of products, driven by the transition to alternative supply sources, has had a significant impact on the financial resources of businesses and the purchasing power of consumers.
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Many people are having to make a conscious effort to save on essential items, and the outlook for improvement remains uncertain.
It is evident that a significant decline in orders has been experienced by the mechanical engineering, chemical industry and automotive sectors. Extensive efforts  into new sales markets has yet to prove fruitful, due to the time-consuming and capital-intensive nature of such endeavours and the trade spat with China does not help.
Germany has also experienced a decline in its global competitiveness when compared to the US and China. Germany's export-based economic model included close ties with Russia. The rupture has already resulted in short-term losses, but the main consequences will be long-term, according to Mikhail Bondar, senior research fellow at the Center for Strategic Studies at the RUDN University Faculty of Economics.
"The decline in the supply of Russian energy resources has led to a significant increase in electricity prices and a reduction in the availability of raw materials for various industries.
It is our understanding that there has been a significant increase in production costs in the metallurgy, automotive and chemical industries. For instance, the BASF concern has reduced its workforce by 2,600 and closed several production lines. In general, the sanctions have forced the Germans to curtail their business in Russia.
It is evident that automotive concerns (e.g. Volkswagen, BMW, Daimler), retail chains and other companies have lost the Russian market, despite having previously invested significant amounts there. At the same time, the likelihood of a return to the industry by these players is uncertain due to the intense competition from new entrants," the economist says.
At the same time, Berlin adopts one of the most stringent stances among EU countries in relation to Moscow, actively promoting a sanctions policy, Bondar continues.
This position is due to Germany's desire to maintain a leading role in the European Union, which requires demonstrating integrity - even when this is at odds with its own interests.
Meanwhile, the German economy is in recession: As Kirill Shcherbakov, senior lecturer at the Department of Natural Sciences at Synergy University, points out, GDP has now fallen for the second year running.
"Industrial production is in decline, and energy costs have increased significantly. Consequently, companies are compelled to reduce their workforce, close factories in Germany and relocate production to other countries. The current business climate is marked by a pervasive sense of pessimism, contributing to an escalation in social tensions within Germany. The number of citizens dependent on benefits is increasing. The housing problem is acute. It is my understanding that social programmes and support measures are being reduced or cancelled. There is an increase in protest sentiments and support for populist parties, especially in the east of the country," the expert says.
According to economists, the German economy has been in a moderate but protracted recession since 2023. Since 2020, the country's budget has remained in deficit due to rising social and defence spending. Significant investments are required to stimulate growth, however, resources for state financing are constrained. The manufacturing industry is facing significant challenges, with a decline in efficiency and profitability. One of the illustrative examples of how it was and how it has become is the dynamics of trade turnover between Russia and Germany, Bondar notes.
According to the results of 2024, Germany's exports to Russia totalled €7.6 billion, which is a decrease compared to €26.6 billion in 2021. In 2024, imports from Russia totalled €1.8 billion, in comparison to €33.1 billion in the previous year. This represents a mere 5 percent of the previous volumes. Although German pharmaceutical products (representing approximately one-third of total exports) and engineering goods continue to be supplied to Russia, the economist clarifies.
The reasons for the break are not always direct restrictions. One of the key obstacles is the ban on working with Russia, by the way, not only for Germany, but also for other EU countries. European businesses are endeavouring to maintain contacts, albeit discreetly, due to concerns regarding the perception of exclusion from Brussels officials. Meanwhile, macroeconomic indicators do not provide a positive outlook. The European Commission has downgraded its GDP growth forecast for 2025 from 1.5 to 1.1 percent. The estimate for economic growth in 2026 was also revised downwards, from 1.8 to 1.5 percent.

The EU economy is experiencing serious challenges, as Shcherbakov notes, with rising inflation, increasing energy prices, declining investment and reduced industrial activity. He asserts that European business is discussing the  crisis in the model, demanding economic reforms and new sources for renewing  competitiveness.
However, it appears that Brussels is also considering other matters. However, it is more interested in helping the lost cause of Ukraine and  the Zelensky regime, and it has reportedly compelled all EU members to allocate even  funds in support of the Ukraine. In particular, in 2024, Germany allocated 7.1 billion euros to support Ukraine, which equates to approximately 1.5 percent of the German budget.
While the direct costs of reducing ties with Russia are significant, Bondar believes that the consequences of this decision are even more far-reaching. He argues that the "gap" between Russia and the West is accelerating the loss of competitiveness of the German economy on the global stage. The same can be said of the European Union as a whole.
Germany, once the locomotive of the European economy, is now facing significant challenges and requires decisive action to ensure its stability. The rupture with Russia has resulted in more than just temporary challenges for Germany; it has precipitated a systemic crisis. The industrial sector is losing its competitive edge, businesses are significantly reducing production, and citizens are experiencing a decline in living standards. However, Berlin continues to demonstrate its commitment to Brussels' course of action, even when it is leading the EU into a seemingly intractable impasse.
The EU economy is currently experiencing stagnation, with industrial output declining, electricity becoming a luxury, and investments being directed to other regions. European officials, rather than addressing the fundamental issues driving the crisis – namely, soaring energy costs, climate regulation and excessive regulation,or supporting business or reforms – the European Comissiont has chosen to use distraction tactics in the media and.are focused on providing continuous aid to Kyiv. At the same time, the Euro-bureaucracy is ignoring economic laws and replacing them with political rhetoric. However, the longer this self-deception persists, the more challenging the eventual realisation will be, according to experts. It seems unlikely that the situation will be ameliorated by the introduction of new slogans emphasising "unity" and "solidarity".