Opinion | Germany Is in Big Trouble

This is troubling enough. But with all the recent commotion, the country has lost sight of another problem that is just as pressing as immigration or the decline of the trans-Atlantic alliance: a faltering, flatlining economy. Two years into a recession, Germany is trapped in a vicious cycle of poor growth and low productivity, and nobody seems to know what to do about it. Whatever the result on Sunday, the country is in serious trouble.

There’s agreement, to be fair, on one point: The threat of permanent decline is real. Businesses are burdened by high energy prices, excessive bureaucracy and increasing competition from China. An aging population means that there are fewer highly qualified workers to fill important jobs. Years of underinvestment in infrastructure are taking a toll. In a looming global trade war, Germany’s export-oriented economy stands to lose more than others. A jury of economists and journalists, appointed to name the “business word of the year’ for 2024, considered the likes — translated into English — of “bureaucracy monster” and “transformation backlog.” In the end, it settled on “deindustrialization.”

Whatever the term for what’s happening, it’s clear that something has to give. Mr. Merz, in pole position to be the next chancellor, portrays himself as a reformer and promises sweeping tax cuts. Yet he hasn’t given a plausible explanation of how he’s going to finance them. He talks about innovation and growth, but he’s vague on plans to reduce government subsidies and social services. In an interview with the weekly Die Zeit, Mr. Merz acknowledged there are limits to how much he’s willing to do. “An aging society that has lived in peace and prosperity for years,” he said, “is less ready for change than one that is in flux.”

The Social Democrats, led by Chancellor Olaf Scholz, are even more conflicted. They want to loosen the constitutional debt brake — which places a strict limit on government borrowing — to increase spending on education, housing and infrastructure. But the party, historically rooted in the labor movement, remains attached to the country’s tradition of mass manufacturing, which it associates with high employment and social stability. Like the Greens, Social Democrats pin their hopes on low-carbon technologies that they believe will set off p an industrial renaissance. Thanks to climate protection, Mr. Scholz has said, the economy will “see the same growth rates as we did in the 1950s and ’60s.”

That’s not an accidental allusion. Both Mr. Scholz and Mr. Merz frequently refer to the economic miracle, or “Wirtschaftswunder,” of the postwar decades, suggesting that another could be right round the corner. Deep down, they must know that the 25-year boom — a period in which all boats rose together — was a historical anomaly. Still, they clearly want to reassure voters that gain can be had without pain, so they keep pretending.