The second part of the trade issue is China. Germany seems to be learning twice that relying on authoritarian, genocidal, dictatorial, and warlike countries for trade is not sustainable. China's industrial boom allowed Germany to sell machinery, but now, the two major trading partners—Russia for raw materials and China for industrial goods—are no longer reliable. While there are signs that Germany is injecting some morality and strategic thinking into its trade relationships with China, these changes should have happened 20 years ago. Post-Cold War, Germany tried to maintain relations with both Russia and China, but this has proven ineffective.
Germany's second major problem is demographics. The country is one of the fastest-aging societies in the world, and by 2030, a large part of its skilled labor force will be retired, diminishing the quality and size of its workforce. This will also severely impact Germany's ability to fund its own industrial capacity and consumer demand.
Some compare Germany's situation to Japan, which has found a way to mitigate demographic challenges by diversifying its trade relations. However, Japan began this process 35 years ago and retains design and production in-house, while Germany has not had the same foresight or trade partners to make such a transition.
The third problem is energy. Germany's system relies on cheap, reliable energy, primarily from Russia, which is no longer available. Though Germany is now getting liquefied natural gas from the United States and crude oil from the Middle East, these are far from secure. With nuclear power mostly shut down, Germany is left with lignite coal, which accounts for 40-55% of its electricity needs. Ironically, under the leadership of the Green Party, Germany has seen an increase in carbon emissions due to its reliance on coal and lignite, despite heavy investment in solar and wind energy.
In reality, only about 10% of Germany's electricity comes from green sources, despite official claims of much higher percentages. The rest is supplied by coal and other non-renewable sources, making the energy system unsustainable. Coupled with its demographic and trade issues, Germany faces a future where it may no longer exist as an industrial power within the next 10 to 15 years.
This decline seems inevitable, regardless of policy changes, and assumes that no additional crises occur, such as the unresolved European debt crisis or worsening energy shortages. The situation in Germany has been building for a long time, and most of us will live to see the end of Germany as we know it.
One unexpected development occurred early in the Ukraine war when Russia shut down the Nord Stream 1 pipeline, which was Germany's primary source of natural gas. The Russians demanded that Germany abandon Ukraine in exchange for restoring gas supplies, forcing Germany to choose between energy security and its Western alliances.
Germany chose to side with the West and face the energy crisis instead of giving in to Russian demands. This choice shows that Germany may prioritize morals and ethics over convenience and wealth, suggesting that it may quietly accept its decline rather than resort to aggression as it has in the past.
