The economy that Germany stopped pretending about: the campaign’s arithmetic

With the election three weeks away, the German campaign has finally told the truth about the economy that the country spent a decade not discussing, and the truth-telling has the particular character that German debates acquire when the numbers force the issue. The industrial base that built the postwar miracle has been shrinking for years, the energy costs that the war in Europe made structural rather than temporary, and the export model that financed the welfare state is being revised by events that no government can wave away. The campaign has stopped pretending, and the honesty, painful as it is, is the most useful thing the election has produced.

The industrial numbers are the part of the story that the campaign has been forced to confront. The manufacturing sector, the country’s largest and its most emblematic, has been shedding output and jobs for two years running, and the causes are the ones that the economists have been describing since the energy shock: the gas prices that the domestic industry pays, the competition from the producers with cheaper energy, the transition to electric vehicles that arrived faster than the German automakers’ timelines and slower than the Chinese competitors’ ambitions. The industries that survived the postwar era by engineering excellence are being tested by the economics of the present, and the testing has moved from the trade journals to the campaign trail.

The energy question is the part that the parties have danced around for years and now cannot avoid. The country’s decision to abandon the nuclear plants and to shrink its dependence on the cheapest gas has produced an electricity price that its industry pays at a premium to its competitors, and the premium is the arithmetic that every manufacturing investment decision now carries. The debate is no longer about the energy transition in the abstract, which the country supports; it is about the cost of the transition in the particular, which the industry pays, and the parties are offering the usual menu of subsidies, price caps and accelerated build-out, with the honest part being the admission that none of them will restore the old prices. The old prices are gone, and the campaign’s recognition of that fact is the progress.

The election’s economic debate has also finally named the social stakes that the statistics had been hiding. The welfare state that the postwar model financed, the pensions, the health system, the vocational training, was built on the assumption of a growing industrial base and a growing workforce, and both assumptions are now failing, with the population ageing faster than the immigration that could offset it. The parties’ plans for the coming term are all, in their different languages, plans for managing the gap between the entitlements that the country has promised itself and the revenue that the economy can produce, and the plans are the honest recognitions of a country that has begun to talk about limits. The limits are the election’s real subject, underneath the debates about the debt brake and the taxes.

The campaign’s honesty about the economy will not win the election by itself, because the voters are deciding on the full range of issues, and the honesty will not solve the economy, because the problems are structural and the solutions will take a decade. What the honesty does is change the terms of the country’s politics: the parties that for years promised to restore the old model without saying how are now arguing about the shape of the new one, and the argument is the beginning of the adaptation that the economy requires. Germany stopped pretending about its economy in the winter of 2025, and the election will be the first test of whether the country can pretend less and plan more, which is the test that the next government will face on its first day.