Why Europe Can't Fix Itself & Why It's Getting Worse with Wolfgang Munchau

A year after our first conversation, I went back to the man who wrote the book on Germany's decline to find out if things got better. They didn't. It’s actually worse, bordering on hopeless. Wolfgang Munchau laid it all out.

Germany stopped innovating long before the numbers showed it. Germany had strong technology through WW 2 and built an entire economy based on worldwide demand for their cars, chemicals and engineering. Scientific breakthroughs from the 1800s peaked somewhere around the 1980s and '90s and never resumed. Germans keep manufacturing but they stopped inventing. No matter how you look at it, when an economy stops innovating, the future looks bad even with great factories.

Germans are still selling BMWs and Mercedes and other popular brands. Wolfgang drives one. But China owns the electric car market. It makes them better and sells them cheaper than Europe and it stills makes a better margin. German electric vehicles are more expensive and just not that good. To compete, Germany has to take down the prices on its gas cars. Also, in China where German cars were always popular, German autos have basically fallen off the list of top-selling cars. In order to keep selling cars, margins have taken a beating. German car industry is not profitable and that’s a failing business model dying in slow motion.