Germany's Dual Policy Failures: A Cautionary Tale for Nations Worldwide
Business commentator Gwyn Morgan presents a sobering analysis of Germany's recent policy trajectory, arguing that the nation's economic and social decisions offer critical lessons for other countries. Once celebrated as Europe's economic powerhouse with the world's third-largest GDP, Germany now faces significant challenges stemming from what Morgan identifies as fundamental policy errors.
The Energy Policy Misstep: Nuclear Abandonment and Russian Dependence
Morgan begins with Germany's energy strategy, noting that reliable, affordable power forms the foundation of any nation's economic health. In 2002, nuclear plants generated more than one-third of Germany's electricity, complemented by coal and oil sources. The country subsequently invested heavily in solar and offshore wind energy with ambitious plans to phase out fossil fuels entirely.
The turning point arrived with the 2011 Fukushima nuclear disaster in Japan, despite the incident being triggered by tidal waves from an earthquake rather than a nuclear accident. This event accelerated Germany's shutdown of safe, reliable nuclear facilities, driven by what Morgan characterizes as unwarranted fear and environmental activism.
Within six months, eight nuclear plants closed, creating an energy vacuum that Germany filled by importing Russian natural gas through the newly completed Nord Stream pipeline. This decision effectively traded secure domestic nuclear power for dependency on infrastructure controlled by Vladimir Putin, establishing what Morgan calls a significant strategic vulnerability.
The Economic Consequences of Energy Transition
A Price Waterhouse report from last year revealed the substantial cost of Germany's nuclear phase-out. Had the country maintained its nuclear facilities, approximately 94 percent of power generation would now be emissions-free, with electricity prices averaging 23 percent lower than current levels.
These elevated energy costs have diminished German industrial competitiveness amid intensifying global competition. Chinese automotive manufacturers including BYD and NIO have entered European markets with innovative, affordable vehicles, eroding profitability and market share for traditional German automakers like Volkswagen, Audi, BMW, and Mercedes Benz. Production data indicates a 25 percent decline in German automotive manufacturing between 2017 and 2023.
Unlimited Immigration: The Social Policy Dimension
Morgan identifies Germany's immigration approach as equally problematic. During the 2015 Syrian civil war, large numbers of displaced Muslim asylum-seekers traveled through the Balkans into Europe, creating what Morgan describes as "huge, unruly waves" that alarmed local populations.
While nations including Greece, Poland, Hungary, and Belarus implemented restrictive measures, Germany adopted an exceptionally open approach. The country accepted 76,000 Syrian refugees in July 2015, followed by 170,000 in August. Chancellor Angela Merkel's famous "wir schaffen das" (we can do it) declaration further opened immigration pathways.
By year's end, Germany had welcomed 1.2 million Muslim refugees, creating what Morgan characterizes as profound social and economic challenges. Even as these difficulties became apparent, Germany continued accepting substantial numbers of Islamic migrants, with 300,000 asylum seekers arriving in 2023 alone, approximately 80 percent of whom were Muslim.
The Security Implications of Immigration Policy
Morgan argues that Germans are now paying what he terms "a terrible price" through increased Islamic terrorism. He cites a February incident in Munich where a 24-year-old Muslim man was arrested following a car-ramming attack that injured 39 people, two seriously.
These and similar incidents have compelled the German government to address Islamic extremism more directly. In November, authorities banned the organization Muslim Interaktiv, which had advocated for Germany to become an Islamic caliphate where Islamic law would supersede German legislation in regulating Muslim community life, including women's treatment.
Morgan concludes that Germany's experiences with energy transition and immigration policy offer valuable cautionary lessons for other nations. He suggests that policymakers worldwide should carefully examine these German case studies when formulating their own economic and social strategies, potentially avoiding similar outcomes through more balanced, pragmatic approaches to complex national challenges.
