It has been going on like that for more than a year.

A Country at a Standstill

Germany is stuck. And not only since the summit between employers, unions and the government. After the coalition’s sluggish, reform-free months, nobody can seriously doubt the current federal government’s incurable inability to reform.

Citizens are trapped by the failure of those in power to launch the necessary reforms. More than that, the country’s leading figures are plainly unable even to think through the necessary steps, let alone say them aloud or dare to take them. And that is before the question of whether anyone has the resolve to carry such a reversal through.

The concrete steps are secondary. First comes the will to change. What is needed now is not a bigger state, but a smaller one. That is exactly where the problem lies with the forces currently dominating politics. Whoever is asked, the answer is always that the state still has to pass this, create that law and introduce that rule.

No. The opposite is true. The state must unleash companies and households. The restraints on the country are precisely the reason for the paralysis gripping Germany. High social charges, high taxes, insane bureaucracy, technological diktat and crumbling infrastructure are only the rough outline of the problem. They are increasingly bringing what is still the world’s third-largest economy to a halt.

Records Only in Bankruptcy

The consequences are well known. Germany now sets records only for insolvencies, collapsing profits, job cuts, unemployment and, of course, the size of the state. More than half of every euro generated in the German economy ends up in some state or state-adjacent fund, where it is first administered and then redistributed.

Both cost money and massively devalue economic output. Mass layoffs are not needed in industry, but in public administration. The bureaucracy that should be lean and keep the state agile lies over companies and households like a suffocating blanket.

The Opposition Hits the Sore Points

While the chancellor remained stuck in announcement mode during his government statement, Alice Weidel of the Alternative for Germany (AfD) put her finger on Germany’s open wounds.

As an opposition leader should, she attacked the chancellor head-on and called his speech the “swan song of a failed man”. That is political prose, but she was also specific. The economy and industry were shrinking. Taxes, energy prices and bureaucracy were weighing on companies. Migration policy had failed. The government is making life easy for its opponents. Keeping lists of key words and reading them out in the chamber is the parliamentary work of our time.

The way out of the crisis lies neither in new laws, more debt, more Europe, more UN, more security nor more tax-funded projects to strengthen democracy. It would lie in something we do not have and will not get for the foreseeable future: a government determined to risk unleashing the country.

Action, Not Summits

For that, the first requirement is not another summit, whoever happens to be invited. What is needed is will and a parliamentary majority. It requires a leader unafraid of difficult alliances and unwilling to be pushed around by a coalition partner.

In practice, that might amount to a minority government under a strong chancellor. It might mean tearing down the much-invoked political firewall to the right. Whatever form it took, it would have to show an unconditional will to force a breakthrough. Ronald Reagan and Margaret Thatcher send their regards.

Maximum Debt and Minimal Reform

By now, it no longer matters whether this government remains in office for another month, another year or another three years. Germany is trapped in an immobility of maximum debt and minimal reform, at the mercy of the leading Social Democrats. How little will to govern must a prospective chancellor have if he asks an outgoing Bundestag, with which he will never have to rule, to approve a luxury borrowing package for him?

Shortly after the federal election and before coalition talks had even begun, the future chancellor struck a deal with the Social Democratic Party (SPD) and the Greens to have the old Bundestag approve a special fund. In essence, that meant debt of up to €1tn ($1.16tn). Because the Basic Law had to be amended, the measure required a two-thirds majority. The parties involved would not have had that majority in the newly elected chamber. Critics therefore called it a dirty trick.

A chancellor-designate who acts in such a way reveals his reluctance to govern even before his election and oath of office. To prevent such tricks, the old Parliament should in principle lose all power on the day of the federal election.

Meanwhile, every further day with this government is another day on which money borrowed from our grandchildren seeps into ever darker channels, while the federal finance minister discovers new budget holes and the state’s ever greater appetites. The fund was intended for infrastructure. Critics complain that it is disappearing into the ordinary budget.

In the end, all the so-called reform plans now being entertained by the government, whether in health policy, pension policy, energy policy, economic policy, security policy or whatever else may come, are economic and social poison pills because they will paralyze systems, multiply bureaucracy or lead to higher taxes and charges.

Everyone Is Heading for the Exit

Whether companies or households, those still here are at best holding out and waiting because they have not yet given up hope of better days. The rest are already looking for the exit, whether in thought or in fact.

Industries are leaving where they can. Citizens are emigrating. Roughly one in three Germans has already toyed with the idea of moving abroad. Alice Weidel rightly noted that more people left Germany last year than ever before and that many of them are well-educated young people who see no future in their homeland. Those who remain often do so only because structures and ties make emigration difficult. But once staying costs more than leaving, the bags are packed.

Social Democratic Finance Minister Lars Klingbeil, forever discovering new budget holes, is a key figure in the crisis. Not more money should pass through the state coffers, but less, far less. A country in Germany’s position can afford neither its excessive welfare systems nor the scale of its development aid and funding of the UN and EU. It can no longer afford migration into the welfare state. The money belongs back in the hands of citizens.

Private property is protected by the German constitution, but since the Merkel government it has been treated with suspicion or massively devalued, including through the scandalous heating law, which forces homeowners to convert their heating systems in the name of saving the climate, even when they cannot afford it.

Tax Hikes as the Only Innovation

The government’s tactic of taking money out of the system and redistributing it through the state, while devaluing property through bureaucratic requirements, makes the entire economy poorer. To fight the poverty created in that way, taxes are then raised again and the money redistributed. The cat goes on eating its own tail until there is nothing left. What is needed instead is the courage to leave citizens and companies with the fruits of their own work. That requires trust that citizens themselves know what is good and right for them.

Only when a government shows the unconditional will to set the state, citizens and companies free will anything change in this country. Only when, for an entire legislative term, most motions submitted to the German Bundestag read “Law XY is repealed without replacement” will the country be able to breathe again. People will roll up their sleeves, tighten their belts and get to work.

Until then, Germany remains trapped in lethargy and decline. It is the trapped giant.

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