Wolfgang Münchau recounts that in German hospitals and police stations, fax machines are still being used, as if it were 1997 and not 2025. The image, as painful as a slap even in southern Europe, does not refer to precarity, but to an allergy to the new and inertia. Two evils that structurally affect the country and explain how the once continental locomotive now runs on a secondary track.
Münchau, former correspondent for The Times in Washington and Brussels, former founder of Financial Times Deutschland, and director of the Eurointelligence news service, is 64 years old and wears very well-graduated glasses. In his recent essay Kaput. The end of the German miracle (Plataforma Editorial), he analyzes the reasons why, in a short time, Germany has gone from being a model of economic success to one of technological delay. Despite having a cold, he passionately converses in Madrid on the occasion of a talk at the Rafael del Pino Foundation.
"Today, German schools are practically the same as they were 40 years ago".
Is Friedrich Merz the chancellor that Germany needs as portrayed in his book? Has Olaf Scholz been the worst chancellor since reunification?
In reality, they have all supported the same outdated model. Especially Angela Merkel, who never solved any problems. She always prioritized forming a coalition government over leading the country. There is a certain discontent in Germany with what she represented and what I call centrism. Germany needed a much more dynamic economy, and no chancellor stimulated that. Additionally, the country had bad luck with the changes that occurred in the world: Russia, China, the United States with Trump... The eurozone crisis helped because interest rates dropped, making it competitive. The supply chain revolution helped. Access to Russian gas and oil helped. Companies had access to capital, and politicians used the banking system to make deals with companies. In other words, they were part of the same system.
What would be the best and worst scenario the day after the elections?
The most likely scenario is that AfD (Alternative for Germany) will continue to grow and become the main opposition party. I do not see a coalition government providing any solution. It will do the same as before, with some cosmetic adjustments. For example, it will not stop the deindustrialization trend. So, AfD will grow. They received 10% of the votes in the last elections, will get 20% now, and reach 30% in the next elections. With that 30%, they might become the largest party. It is still possible to form a coalition against them, but it is becoming increasingly difficult.
Elon Musk says that Germany is entrenched "in the guilt of the past." The world's richest man and advisor to President Trump has encouraged voting for AfD on his social network and recently addressed his supporters at a rally. All this after generating controversy for his alleged Nazi salute at Trump's inauguration. How do you assess Musk's support for Alice Weidel, their leader?
It does not surprise me. Musk's main contribution - who is not very popular in Germany - is not his ability to influence votes but to incite many young people. AfD may experience greater mobilization of its supporters thanks to the X social network. It had a significant impact on Republican voters in Trump's victory, and the Democrats did not see it coming. CDU voters are not too excited about the prospect of another coalition government. They know that Merz uses aggressive language, but in the end, he will seek a grand agreement. He has only said that he will draw a red line with AfD, which means he has no other options. The more red lines you draw, the fewer options you have. I have to say that Germans are very supportive of red lines, but sometimes in life, you have to do things a little differently. I am not in favor of AfD. I think their economic policies are atrocious and do not contribute positively to the debate in Germany. What would make a difference is if Merz could implement his policies. It is very possible that AfD will support him. Merz's immigration policy is not so different from AfD's, although I personally think it is wrong. I am a strong supporter of immigration. But if I were Merz's advisor, I would tell him that this firewall is not the right one if he really wants to fix Germany. He understands some of the things I outline in the book. I do not think he has read it, but I have heard him share part of the diagnosis I make, such as the German economic model being flawed. It is not something you hear in Germany, not even from the most critical. He also talked about AI, he understands what it is about. But he has focused on immigration. So, what will happen? He will form a centrist coalition government, be the toughest on immigration control, and thus trust in weakening AfD. I do not think it will work.
In the epilogue, you write: "When an economy begins to weaken, people get angry and discontent, and if there is no opposition, they end up voting for extremist parties." How concerning is it, for Germany and the rest of Europe, that industrial decline may become the perfect breeding ground for radical ideas in politics?
What needs to be done would be enough to write another book (laughs). I do not propose to end the industry but to diversify it and do other things. There are many things that engineers and scientists are still capable of doing. They can design machines instead of manufacturing them. Look at the Americans: they design chips, and the Taiwanese manufacture them... New business models can be found. There are many opportunities in the 21st-century world to make money. Germany would have to open up, which means becoming more friendly with companies and entrepreneurs. It means less bureaucracy and fewer taxes. It means leaving companies alone and accepting that sometimes bad things happen, and not everything needs to be regulated to the point of strangulation, which is what is happening. The problem is that many regulations are European. For example, in AI, cryptocurrencies, or big data. Germany should be analyzing what business opportunities there are in data, not just in its protection. Although, as I said, it is a European problem. And if I may say, something very similar is happening with the media as with the automotive industry. Newspapers used to tell everyone what to think because that was our job, there was no one else doing it. The media did not see social media coming because it emerged from a completely different environment than the news. They were not interested in them or thought they could have anything in common. Now these platforms are information channels.
What would you do to try to prevent the German economy from being limited to competitiveness? What specific measures would you implement to create startups and try to re-engage in the race for digital development, now that Europe is falling behind the United States and China in areas such as AI?
It would probably be necessary to do something similar to what Javier Milei did in Argentina. I do not believe in half measures. At the very least, each startup should be given five years of tax exemption and exemption from labor regulations. Let them be and see how successful they are. Then maybe the same policy should be applied to larger companies. Regulation has destroyed everything and needs to be relaxed on a European scale because if it is so strict, it has no chance of working. Companies cannot thrive if they are treated as hostile. The German AI industry is comical. Just like the mobile phone industry. We have the worst network in Europe. It was not invested in because for all political parties, it was never a priority.
"Today German schools are practically the same as they were 40 years ago"
Your book can be summarized in six words: the world changed, but Germany did not.
That's right. Germany has been stagnant since the 90s. It maintains the same debates, uses the same technology, develops the same structures, operates with the same export-based industrial model... It is very strange. Germany was a very advanced country. When I grew up, it was at the technological forefront. Germans were scientists and engineers. Technology and mathematics were talked about all the time. Our schools were good. Today, schools are practically the same as they were 30 or 40 years ago. If I look at what children are taught, the curriculum is old, while in England, it has completely changed. We are still training mechanical engineers. We have not incorporated a statistical and data-driven approach to education. Nor any of the things needed for modern life.
The decline of your country as an industrial giant in the midst of technological transition is due, as explained in your analysis, to a combination of factors: cheap energy, globalization, leadership in the analog era... Which of them has contributed the most to Germany mismanaging industrial capitalism and making terrible decisions in technology and geopolitics?
I go through all the factors: finance, energy, technology... What they have in common is the need to reach a consensus and not allow market mechanisms to interfere. Let's look at the automotive industry, for example. No one is investing in it. It is a giant industry that moves a lot of money. Well, German car manufacturers chose not to invest in electric vehicle development. They preferred to invest in software to disguise carbon dioxide emissions [referring to the Dieselgate scandal, the scandal over Volkswagen's CO2 emissions]. At the very least, they could have done as the British did at the end of the imperial era and become passive investors. Admit that Chinese manufacturers are better and become minority shareholders. Or buy half of Tesla. But no. Instead, they thought that this industry would not succeed. Or that if it did, it would not have serious consequences for them. Or that if they were serious, they could deal with them... In the book, I talk about the famous case of Smith Corona in the 1980s. It was the leader in typewriter manufacturers and tried to integrate the personal computer into them... until laser printers appeared, and they lost their business. They did not see it coming. It is the same thing that happened in Germany. Car manufacturers were able to sense what happens when a new technology emerges. They did not imagine that an electric car is not actually a car but a digital device. The future of the electric car - and therefore the economic benefit - lies in AI and data. Not in the engine, nor in the tires, nor in the braking system, but in the data that will allow the vehicle to analyze traffic and communicate with others. The Chinese will always have an advantage in this industry because they also own the supply chain, but the Germans will not put up a fight. They do not understand it. Neither the manufacturers, nor the government, nor the media.