Shock has been caused by the warning from the Chancellor of Germany, Friedrich Merz, who foresees a severe economic crisis while simultaneously insisting on policies that strengthen state interventionism and central planning. This emerges from a letter to the members of the governing coalition, which has been made known only in fragments, but is enough to reveal that—despite the dramatic tones—it signals no substantial change of course. Exactly as happened in Greece in 2009, shortly before the country entered its painful decade of crisis. In his letter to the Union parties and the SPD, Friedrich Merz calls for a common struggle against the economic crisis and requests once again a "year of reforms," after the proven failure of last year's "autumn of reforms." However, once again, the Chancellor's rhetorical initiative risks being lost within the balances of the governing coalition, which, under the doctrine of "firewall" policies, is pushing Germany toward ideological choices that even the Social Democrats of Helmut Schmidt's era would have considered excessively detached from economic logic.
The "discovery" of the crisis
In his text, Merz recognizes—with a tone of surprised realization—that job losses have begun to spread across all sectors of the economy and that the situation is dramatic. He emphasizes that it is imperative to create conditions for new growth by strengthening competitiveness, reducing bureaucracy and energy costs, and preventing the destabilization of the labor market. These are findings that analysts and industry representatives have been repeating for years. However, the political and media environment of Berlin—a dense network of NGOs and government-friendly media—sustained the illusion that the "green transition" was being crowned with success. Thus, a crisis that has lasted over seven years and started at the core of German industry only now seems to be acquiring an urgent character in the Chancellor's office. The deindustrialization of Germany, as pointed out, is not a new phenomenon. It was fueled by ideologically driven green policies, over-regulation, and over-taxation. Although Merz seems to recognize the problem, the solution he proposes remains the same: more subsidies for politically promoted "green" structures, support for large industries with strong communication influence, and calls for "resilience," accompanied by indirect rebukes toward the Mittelstand.
What is left unsaid
The absence of critical issues from the letter is striking. No mention is made of the migration chaos that, for a decade, has burdened social systems and internal security. There is no talk of the naive belief that a complex economy can be guided toward a green planned economy, following the model of Robert Habeck's policies. Nor is it recognized that the German social state has led to tax and social security burdens that are no longer internationally competitive. Even from the geopolitical developments in Ukraine, Merz derives only the position of absolute and unconditional support for Kyiv, regardless of the cost.
Government without a course correction
The Chancellor has already shown that he is willing to make every concession to maintain the governing coalition. The renaming of "citizen's income" into a virtually unchanged "basic security" is considered a characteristic example. Meanwhile, the discussion for a substantial policy change on migration has essentially been buried. In the meantime, the economy is bleeding. Germany loses between 60 and 100 billion euros every year in net direct investments, as capital "votes with its feet" against unfavorable conditions. In response, Merz proposes the so-called "German Fund," a state investment fund that will direct private capital into selected growth sectors—yet another form of central planning, this time cloaked in innovation. Finally, the Chancellor avoids any reference to the upcoming debt crisis caused by the dismantling of the "debt brake," shifting the burden to future generations. According to the criticism being leveled, Friedrich Merz functions more as a central planner than as a champion of the ordoliberal tradition. And as long as Germany continues to move forward with slogans of resilience and politically directed solutions, the battle against economic decline seems increasingly difficult.
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