German car manufacturers just had their worst quarter since 2009 and the dark days of the euro crisis. Combined, the earnings of Volkswagen, bmw and Mercedes-Benz fell by 76 percent for the third quarter of 2025. Financial consultancy EY labeled Germany the worst-performing car-manufacturing nation.<\/p>\n
Germany\u2019s chemical industry is operating at only 70 percent capacity, its lowest level since 2002, according to figures from industry group vci earlier this month. The industry is sending out an \u201csos signal,\u201d according to vci president Markus Steilemann. The European Union\u2019s share of the global chemical industry shrank from 33 percent in 2002 to 13 percent in 2023.<\/p>\n
Overall, Germany\u2019s industrial production is down 10 percent from its peak in 2018. Only one sector is growing: arms. Companies that once made car parts are starting to make weapons. That is huge news from a military perspective. However, the German arms industry generates around \u20ac50 billion (us$58.6 billion) in revenue annually; its car industry generates \u20ac500 billion. The rise of the German war machine can\u2019t make up for all the bad news everywhere else.<\/p>\n
And this is not just a temporary hiccup. All of Europe has major, long-term economic problems.<\/p>\n
Perhaps its biggest is its inability to create start-ups. The value of every EU company founded in the last century is dwarfed by just one of America\u2019s many successful start-ups.<\/p>\n
No European company founded in that time is worth more than \u20ac100 billion ($117 billion). Over the same time period, six companies founded in the United States are now worth $1.2 trillion.<\/p>\n
\u201cWhen you look at the U.S., most of their top companies didn\u2019t exist 30 years ago,\u201d said Xavier Niel, one of France\u2019s most influential businessmen. \u201cWhen you look at France, all of ours already existed back then.\u201d<\/p>\n
\u201cEurope is stuck in a static industrial structure with few new companies rising up to disrupt existing industries or develop new growth engines,\u201d warned Mario Draghi in a landmark report on European competitiveness published last year.<\/p>\n
It\u2019s not because Europeans are less smart or less entrepreneurial. Europe\u2019s regulations are so stifling that many companies move abroad. From 2008 to 2021, almost a third of European start-ups that went on to be valued above $1 billion moved to the U.S.<\/p>\n
In 2008, before the financial crisis, the EU\u2019s gross domestic product was about the same as America\u2019s. Now America\u2019s is 50 percent bigger. And that\u2019s not just because Britain left the EU; America\u2019s economy is growing steadily while the EU\u2019s barely grows at all. Thirty years ago, the EU made up 27 percent of the world\u2019s gdp; today, it is 17 percent.<\/p>\n
China is also a serious competitor. More patents are filed in China than in Western Europe and the U.S. combined.<\/p>\n
Why? There are several obvious causes, including:<\/p>\n
Regulation: In tech alone, think tank Bruegel estimates there are 100 laws and regulations administered by more than 80 agencies. The EU leads the world in regulating the tech industry. In one of the most dynamic sectors, it is far easier to set up shop abroad. The EU also leads the world in Environmental, Social and Governance (esg) regulations.<\/p>\n
Green policies: Standard business energy costs in the U.S. are half of what they are in Germany\u2014largely due to environmental regulations and fees.<\/p>\n
Ukraine war: Germany\u2019s manufacturing model was sustainable when it was getting cheap gas, raw materials and chemicals from Russia. Since Russia invaded Ukraine, however, those resources have been cut off.<\/p>\n
U.S. tariffs: These have been a double whammy for Germany. Germany is selling less to the U.S., as is China. China is trying to make up for lost customers by selling more to Europe at prices its domestic firms cannot match.<\/p>\n
The result is an economic collapse that would be a \u201ccrisis\u201d if it had happened overnight. Unlike the 2008 crisis, this isn\u2019t caused by banks, trading or hedge funds. It is entirely political.<\/p>\n
This means the solution must be political too. And politics aren\u2019t doing too well in Europe right now. France has gone through seven governments in the last three years. Germany is stuck with one unpopular, unstable coalition after another. Spain\u2019s prime minister has no majority in parliament. Under Spain\u2019s constitution, he can\u2019t be ousted unless parliament agrees on a replacement. So he continues in office but not in power.<\/p>\n
Reform would also have to happen at an EU level\u2014and things don\u2019t look good there either. This week, the EU failed to approve a free-trade deal with the South American trade bloc mercosur, kicking the can down the road again and prompting disgruntled nations like Brazil to threaten to pull out. The \u20ac100 billion flagship Franco-German military project, the Future Combat Air System, is on the brink of collapse as nations squabble about who gets to make what. And the EU\u2019s plan to fund Ukraine by confiscating Russian assets has fallen apart because Belgium doesn\u2019t want to risk being forced to pay back the \u20ac200 billion sitting in its financial institutions if the program is later declared illegal.<\/p>\n
Is there a way out for the EU? \u201cOnly a full-blown crisis can save it now,\u201d declared the Telegraph over the weekend.<\/p>\n
\u201cThe Continent loves a good crisis,\u201d it wrote. \u201cJean Monnet, the man dubbed \u2018the father of Europe,\u2019 famously declared the bloc would be \u2018forged in crisis, and will be the sum of the solutions adopted for those crises.\u2019\u201d<\/p>\n
Former Finance Minister of Germany Wolfgang Sch\u00e4uble said in 2011: \u201c[C]risis represents an opportunity. I\u2019m not saying that I enjoy being in a crisis, but I\u2019m not worried. Europe always moved forward in times of crisis. Sometimes you need a little pressure for certain decisions to be taken.\u201d<\/p>\n
Many believe a sudden, urgent threat\u2014as opposed to the steady decline of the past decade\u2014will turn the EU around.<\/p>\n
\u201cThe way Europe behaves is that it takes really crisis events to force change,\u201d investor Lord Jim O\u2019Neill said. \u201cI know some people of my generation who sit in the middle of all of this in Europe, and they pray there\u2019s going to be a crisis so they can do it all.\u201d<\/p>\n
\u201cEurope needs to see more pain in order for politicians to perceive that they have a mandate to do what needs to be done,\u201d said Bank of America chief economist Claudio Irigoyen.<\/p>\n
Herbert W. Armstrong also forecast it would take a crisis to forge Europe into a superpower. In 1984, he warned that a massive banking crisis \u201ccould suddenly result in triggering European nations to unite as a new world power larger than either the Soviet Union or the U.S.\u201d (co-worker letter, July 22, 1984).<\/p>\n
Mr. Armstrong also warned that an empowered Russia would spur Europe to unite. In his Jan. 23, 1980, co-worker letter, he warned that fear of Russia \u201cwill be the spark to bring the heads of nations in Europe together with the Vatican to form a \u2018United Nations of Europe.\u2019\u201d<\/p>\n
Germany and the EU are feeling the pressure from this and more. Once shocked by a crisis, expect massive reforms to overhaul government, politics and the military.<\/p>\n
Mr. Armstrong\u2019s forecasts are based on Bible prophecy. Revelation 17 prophesies of a union of 10 leaders under a strongman. World events are forcing Europe in this direction.<\/p>\n
\u201cWe are now at the point where Europe as a whole must decide what it is to be,\u201d wrote Geopolitical Futures founder George Friedman. \u201cNow that U.S. interests have changed, Europe faces the crisis it has tried to evade for the past 80 years. I suspect that the Europeans will deny that there is a crisis or, in acknowledging it, insist there is nothing to be done about it.\u201d<\/p>\n
America is leaving an economically weak Europe to fend for itself. That \u201ccould force the Europeans to do something unlikely: rationalize their own situation by uniting.\u201d<\/p>\n
This is exactly what the Bible says Europe will do.<\/p>\n","protected":false},"excerpt":{"rendered":"German car manufacturers just had their worst quarter since 2009 and the dark days of the euro crisis.…\n","protected":false},"author":2,"featured_media":193939,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-193938","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/193938","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=193938"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/193938\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/193939"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=193938"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=193938"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=193938"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}