Renaissance Europe Institute@reieurope
Europe cannot recover structurally without Germany recovering first.
Germany is still the industrial core of the EU and the largest import engine inside the single market, accounting for around 21% of EU GDP and roughly a quarter of EU industrial production.
When German demand weakens, the shock is transmitted directly to Italy, France, Spain, Poland, the Netherlands, Austria and Czechia through exports, components and industrial supply chains.
Germany’s current-account surplus fell from 7.7% of GDP in 2021 to 4.2% in 2022 after the energy shock, and has only partially recovered to around 4.5–4.7% of GDP in 2025.
This is what happens when an industrial superpower spends years underinvesting in energy sovereignty, infrastructure, grids, renewables, nuclear capacity, defence production and strategic technologies — while becoming deeply dependent on Russian gas.
Europe will not fully recover until Germany recovers — and that means restoring its industrial competitiveness, investment capacity and export strength in an economy where exports still represent over 40% of GDP.