The German economy has become more dependent on the USA

[rose98734]

Twenty-five years ago, most German exports went to France and Britain, with the balance going to other members of the EU. After the Great Financial Crash of 2008 and the Eurozone crisis of 2011 - 2013 clobbered EU member states, Germany pivoted to exporting to China.

But the Chinese are no longer importing, they're making their own stuff. And both the French and British economies are faltering, which means they're not importing as much. So Germany has pivoted to exporting to the USA. Here is the chart:

source

This means the German economy is most at peril from the incoming Trump administration, and the tariffs it intends to put on other countries..

The rational solution to this is for Germany to revive the EU as a market.

But the EU has taken a dark turn since Brexit. The British had been the great brake on regulation. After they left on 31st December 2020, the EU churned out over 13,000 pieces of regulation, compared to just 4,500 from the USA and 2,000 pieces from the UK.

The effect of all this regulation is to strangle new businesses at birth. While old businesses are dying at the regular rate. If this carries on too long, the economy becomes hollowed out.

The EU Commission will obviously hoard it's power to regulate - it needs a member state to step into Britain's former shoes and push back. So far, no one has stepped up. To save itself, Germany might have to be the state that forces the EU to cut back on regulation.

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