Germany's economic challenges are coming to a head, as years of misguided policy decisions now bear fruit. Tax revenues are plummeting, a direct consequence of the state's relentless war on key industries such as automotive and energy. This is a stark lesson for those who believe a state can micromanage a complex economy—it inevitably ends in disaster.
Germans will soon have to face the reality of scaling back their overgrown welfare state. In the meantime, the government will likely squeeze every possible tax avenue dry, further burdening citizens and driving the economy deeper into recession. The latest report from the Federal Ministry of Finance reveals a 7.9% drop in tax revenue compared to the previous year, totaling just €63.8 billion. The sharp decline in VAT, down 9%, highlights Germany's ongoing consumption slump, despite recent wage increases.