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The German problem? It's an analogue country in a digital world

Germany was once an economic model to emulate but its reliance on industries past their sell-by date is costing it dear

Jim Callaghan snuggled up close to the chancellor Helmut Schmidt in the 1970s, and ever since there has been a sense among the social democratic left in the UK that there is much to be learned from Europe’s biggest economy. The Germans, it has been said repeatedly down the decades, have a superior model of capitalism: based on good design and skilled workmanship; stable, long-term funding arrangements between businesses and the banks; a more consensual system of industrial relations; a network of medium-sized companies, many of them family-owned; a top-notch system of vocational and technical training that ensures a steady supply of skilled, productive workers. While the rest of the eurozone’s big four – France, Italy and Spain – have been showing signs of recovering from the slowdown caused by the Ukraine war-induced energy shock, Germany has continued to struggle and is still flirting with technical recession.

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