Germany

The Reichstag in Berlin under a dramatic evening sky
Points of viewGermany grew rich on sound money, competition and hard choices. For two decades, it has been living off that inheritance.

I was born in West Germany in 1975 and left for London in 2004. I still think in German, yet Germany’s political psychology feels increasingly alien to me. I have spent two decades explaining to readers in Australia and New Zealand what went wrong.

Core beliefs

Merkel governed but never led

In the 2005 election campaign, Angela Merkel offered Germans radical economic reform. Instead of winning an outright majority, she narrowly defeated the Social Democrats and had to govern with them. It was the last time she talked about economic reform.

She managed crises for 16 years and retired of her own volition, which few leaders manage. She left behind a country that badly needed reform and a political system that was fractured and polarised.

Read: Angela Merkel governed Germany for 16 years, but never led (The Australian Financial Review, 2021)

Balanced budgets hid an unpaid bill

For years, Germany worshipped the “black zero”, a balanced federal budget, and Merkel told the world to emulate the Swabian housewife. Meanwhile, Berlin spent money on retirement at 63 for long-serving workers and higher pensions for older mothers.

By 2030, pension subsidies, defence and interest alone could absorb roughly two-thirds of federal spending.

Read: German leaders erase the big black zero they once worshipped (Newsroom, 2026)

Wishful thinking is not a foreign policy

For three decades, Germany indulged the dream of a special relationship with Moscow. It treated Russian gas as ordinary business and let its armed forces decay until it had no ships that sailed and no planes that flew. Russia’s invasion of Ukraine in 2022 ended decades of pacifism in a day.

Read: Decades of pacifism gone in a day (The Australian Financial Review, 2022)

When the centre fails, the extremes grow

German democracy rested on a contest between two big parties of the centre. The Social Democrats never explained Gerhard Schröder’s reforms to their own voters and then fell silent on immigration. They now poll 14 percent nationally.

Their voters went elsewhere. In September 2026, the AfD won nearly 44 percent in Saxony-Anhalt.

Read: I’m a liberal now but I still mourn the slow death of the Social Democrats in Germany (Newsroom, 2026) and Moscow wins east German elections (Newsroom, 2026)

Germany is a lesson for New Zealand both ways

Some German institutions are worth copying, such as North Rhine-Westphalia’s directly elected mayors and the competition between German cities for residents and jobs. Germany’s mistakes are just as instructive. Like Germany, New Zealand has put its economic interests ahead of its security.

Read: German solution for New Zealand’s local government woes (Insights, 2024) and The foreign policy lessons NZ should learn from Germany (The Australian, 2022)

How I came to this

Among the scribblings in a calendar I filled at the age of four are three letters in red ballpoint pen: SPD. I stopped supporting the Social Democrats long ago, but the calendar is still in a box at my parents’ house.

The Berlin Wall came down when I was 14. I studied in Bochum, wrote a doctorate on competition law and left for London in 2004. From abroad, I have written about Germany for Business Spectator, The Australian, Newsroom and Quadrant, among others.

I still vote in German elections when the post allows. In 2025, my ballot papers arrived the day before the election.

  1. 1975I am born in Gelsenkirchen, West Germany.
  2. 1989The Berlin Wall falls.
  3. 2004My doctoral thesis, Wettbewerb, Werbung und Recht, is published. I leave for London.
  4. 2010After the Wall looks back on 20 years of German unity.
  5. 2014I write about the strange death of liberal Germany.
  6. 2015Merkel’s “We can do it” opens Germany’s borders to refugees.
  7. 2021Merkel retires after 16 years.
  8. 2022Russia invades Ukraine. Germany announces €100 billion for its armed forces.
  9. 2025Friedrich Merz loosens the debt brake and becomes Chancellor.
  10. 2026The AfD wins nearly 44 percent in Saxony-Anhalt.

What happened next

Friedrich Merz unlocked €500 billion for infrastructure and exempted defence spending above one percent of GDP from the debt brake. Germany is now borrowing almost a trillion euros over five years, and much of it is going into the welfare state rather than bridges or tanks. Ten-year bond yields have risen above 3 percent, their highest since 2011.

The political centre keeps shrinking. The AfD has led national polls for months, and in Saxony-Anhalt the parties that built the Federal Republic won only 37 percent between them.

Books and reports

Cover of Wettbewerb, Werbung und RechtWettbewerb, Werbung und Recht2004 After the Wall2010

In my own words

“Who would have thought that the Swabian housewife had debts of her own?”

German leaders erase the big black zero they once worshipped, Newsroom, 16 June 2026

“It is strange to observe a nation act irrationally and against its own interests. Stranger still when that nation is your own.”

The Long Estrangement, Quadrant, 27 November 2025

“If all political careers end in failure, then Angela Merkel is the exception to the rule.”

Angela Merkel governed Germany for 16 years, but never led, The Australian Financial Review, 26 September 2021

Start here

Business Spectator · 11 September 2014

The strange death of liberal Germany

In its better days, the FDP was the only party prepared to challenge this cosy consensus of German feel-good politics and talk about those issues that were not universally popular.

Everything I have written on this

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