Sarah Muir

Is Germany becoming the new sick man of Europe?

Is Germany becoming the new sick man of Europe?
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It’s not going well for Germany at the moment. Their largest bank is on the verge of collapse while their second largest bank is laying-off staff. And Frau Merkel is having to cope with the political fallout of her open-door immigration policy – not least a rise in populist nationalism and a dip in her own popularity. Germans have also been told in recent months to stockpile food, while a leaked document suggested a return to national service, which stopped in 2011, was being considered. But that's not all: the country's economy recently slipped in the World Economic Forum’s competitive ranking. All this makes for a grim picture. So having lived for 14 years in Germany with my Venezuelan husband (who knows a thing or two about political instability and national crises), we decided it was time to up sticks and return to the UK.

My German colleagues, non-plussed by the Leave campaign’s victory, wondered why I would want to return to a foggy, rain-sodden island inhabited by inward-looking ‘Insel Affen’ who live on a diet of weak beer and fish and chips (yes, a lot of Germans think it’s still the 1970s in Britain). Indeed, many of my Euro-centric friends and relatives in the UK questioned why I would want to return.

When I moved to Germany in 2002, it was, in many respects way ahead of the UK – a strong, export-driven economy with efficient public services, good (albeit expensive) healthcare and trains that ran on time. But over the last 14 years, we’ve witnessed a steady decline in standards in Europe’s powerhouse.

Let’s start with the economy. Recent reports have shown a sharp decline in exports and Germans are a parsimonious lot, so don’t expect domestic demand to fill the gap. Sanctions against Russia, plus a general drop in global demand, have had an impact on the ‘Mittelstand’, the backbone of Germany’s economy. Meanwhile, public services are feeling the strain of an ageing population coupled with a sharp increase in the number of refugees arriving.

Reading reports that Germany is perceived as less competitive is also not a surprise; one of the reasons we came back to the UK is because, thanks to Germany’s byzantine bureaucracy, starting a new business involves endless red tape and excessive costs.

And as for the trains? Germany’s creaking infrastructure has been cited as one of the reasons for the country’s decline in competitiveness. Deutsche Bahn trains are frequently over-crowded and often late. While here in the UK, a recent trip to London on one of the smart new GWR trains was actually quite pleasant. Yes, even the trains in the UK are (sometimes) better than in Germany.

When asked about the state of their own country, my German colleagues’ responses usually fall into two distinct camps: academics, who enjoy a particularly secure, privileged position in German society, can see no problems. They often support Frau Merkel’s approach and see Germany as leading Europe by example. And they're at a loss as to why the rest of the continent doesn’t take a leaf out of Germany’s book.

But ask those working in companies and the response can be very different. People there have witnessed firsthand a small but discernible decline in the economy and are acutely aware of the drop in standards in a variety of public services. A spate of botched, over-budget public projects - most notably Berlin’s Brandenburg airport, mention of which will make Germans squirm with embarrassment - haven’t helped with this sense of disquiet.

Of course, Germany’s ability to reinvent itself shouldn’t be underestimated. The fact that it was able to reunite with its former-communist neighbour reasonably successfully indicates that when the country puts its mind to something, it can achieve it.

A lot will depend on how well Germany can adapt to a post-Brexit Europe. Can the country maintain its still-enviable welfare state while integrating large numbers of refugees? And how will Germany handle a previously unthinkable shift to the right in mainstream politics? For now, Frau Merkel is still in the driving seat. But her future is far from certain. And who will take her place remains unclear. To misquote Darwin, the key to survival is not just about being the fittest, but about having the ability to adapt to change. Right now, I have greater faith in the UK’s adaptability than in Germany’s.

Sarah Muir recently returned to the UK after living in Germany for 14 years and was short-listed for this year’s Timothy Garton Ash prize.