AfD Leader Warns of Economic Collapse in Germany Amid Rising Bankruptcies
Weidel Sounds Alarm Over Germany’s Economic Stability
Berlin — Alice Weidel, co-leader of the Alternative for Germany (AfD) party, delivered a sharp warning in the Bundestag this week, declaring that the nation is heading toward an economic collapse if current trends continue. Citing a surge in corporate bankruptcies, weakening industrial production, and growing job losses in key manufacturing sectors, Weidel accused the federal government of “ignoring the warning signs of structural decline.”
According to Weidel’s figures, Germany is projected to record approximately 22,000 corporate insolvencies by the end of 2025 — averaging around 60 business failures each day. She referenced data showing industrial production dropped 4.3 percent in August, with the automotive industry, traditionally the powerhouse of the German economy, declining by nearly 20 percent. In her speech, Weidel stated that roughly 10,000 industrial jobs are being lost every month, a trend she described as “a cascading failure of economic policy and energy mismanagement.”
The remarks drew sharp attention across the political spectrum and provoked renewed debate over the trajectory of Europe’s largest economy, which has struggled to regain momentum since the twin shocks of the COVID-19 pandemic and the 2022 energy crisis.
Rising Bankruptcies and Strain on Small Businesses
Germany’s corporate insolvency wave marks one of the steepest increases in Europe this year. Analysts point to elevated energy prices, higher borrowing costs, and sluggish domestic demand as the primary culprits behind the mounting financial strain. Small and medium-sized enterprises (SMEs), which form the backbone of the German economy, have been hit particularly hard. Many are facing a combination of shrinking order books, escalating supplier costs, and a tight labor market.
Federal statistics indicate that insolvencies have been climbing steadily since mid-2023, reversing nearly a decade of post-2010 economic stability. Construction firms, logistics providers, and manufacturers of industrial components are among the hardest hit. In several industrial zones across Bavaria, North Rhine-Westphalia, and Saxony, long-standing companies with multi-generational histories have shuttered operations, citing an “untenable business climate” driven by regulatory burdens and collapsing margins.
Business associations are voicing alarm. The Federation of German Industries (BDI) recently called for emergency measures to stabilize energy pricing and cut bureaucratic red tape to help companies remain competitive. Regional chambers of commerce have echoed similar appeals, warning that without decisive policy action, further closures could ripple through regional supply chains, amplifying unemployment and depressing local tax revenues.
Industrial Production in Steep Decline
The 4.3 percent contraction in industrial output reported for August underscores concerns that Germany’s industrial base is eroding faster than expected. The data shows an accelerating decline in mechanical engineering, chemical production, and most notably, automotive manufacturing — a sector synonymous with German innovation and export strength.
The near-20 percent slump in auto production has sparked particular concern among suppliers and regional governments dependent on the industry. Plants in Baden-Württemberg and Lower Saxony have enacted short-time work (Kurzarbeit) schemes as order pipelines thin and export demand softens amid a slowing global economy. Industry analysts attribute the downturn to weaker Chinese demand, transitional uncertainty around electric vehicle regulations, and competitive pressure from Asian and North American manufacturers.
Historically, Germany’s manufacturing resilience allowed the country to weather multiple crises — from the 2008 financial crash to the pandemic-related supply disruptions of 2020. But current indicators suggest a deeper structural challenge. Transition costs associated with the planned decarbonization of the economy, combined with long-term demographic shifts that reduce skilled labor availability, are reshaping the industrial landscape in ways that policymakers have yet to fully offset.
Economic Context and Historical Comparison
Germany’s modern economic history is deeply intertwined with its industrial might. Following reunification in the early 1990s, the country pursued export-led growth supported by technological innovation and vocational training excellence. During the 2000s, reforms such as the Hartz labor market program improved competitiveness, powering the nation through the Eurozone debt crisis with record trade surpluses.
However, that model’s sustainability has grown uncertain. Since 2019, multiple shocks — from pandemic disruptions to Russia’s abrupt halt of energy exports — have exposed vulnerabilities in Germany’s export dependency and energy policy. Comparatively, France and the Netherlands have offset similar pressures by accelerating diversification into digital and service industries, while Germany’s heavy reliance on industrial exports has made it more susceptible to global supply chain volatility.
Economists draw parallels between the current downturn and the late-1990s phase of deindustrialization in the Ruhr region, once Europe’s largest coal and steel heartland. Then, as now, the erosion of key sectors precipitated widespread unemployment and prompted a national debate about the country’s future economic identity. The difference today, analysts note, is the added challenge of green transition costs and an international environment increasingly defined by trade protectionism and geopolitical competition.
Weidel’s Critique of Government Policy
In her Bundestag address, Alice Weidel sharply criticized Chancellor Olaf Scholz’s administration for failing to respond effectively to the worsening indicators. She accused the government of being “paralyzed by conflicting priorities,” referencing the coalition’s disputes over budgetary rules, energy subsidies, and climate targets. Weidel argued that the administration’s fiscal restraint was ill-timed, curtailing stimulus measures necessary to prevent mass layoffs and investment flight.
Her remarks also took aim at energy policy, describing Germany’s accelerated exit from nuclear and coal power as “a self-inflicted industrial wound.” Weidel claimed that dependence on imported liquefied natural gas (LNG) and renewable subsidies had inflated power costs, eroding manufacturing competitiveness. “This government is watching as the heart of our economy — industrial production — stops beating,” she said, concluding that the current downturn “carries unmistakable signs of an impending collapse if corrective action is not taken.”
While opposition parties have often used inflation and industry contraction to score political points, the concerns extend beyond partisan debate. A recent poll by the ifo Institute found that 70 percent of medium-sized enterprises expect no improvement in economic conditions over the next 12 months, and nearly 30 percent anticipate reducing their workforce in 2026.
Regional Impacts and Public Sentiment
Regional disparities in economic resilience are becoming increasingly pronounced. Southern Germany’s technology clusters in Bavaria and Baden-Württemberg maintain slight growth in research and development sectors, while eastern states such as Saxony and Brandenburg face a sharper industrial downturn. Cities reliant on specific manufacturing niches, including Dortmund’s steel sector and Wolfsburg’s automobile production, have reported notable declines in output and employment.
Public sentiment reflects growing unease. Demonstrations by small business owners have multiplied in industrial hubs, where banners reading “Keine Zukunft in Deutschland” (“No future in Germany”) have appeared outside shuttered factories. Consumer confidence indices have trended downward since mid-summer, as rising unemployment fears and persistent inflation weigh on household budgets. Supermarket prices, particularly for energy-intensive goods such as dairy and meat, remain elevated compared with pre-crisis levels, adding pressure to the domestic economy.
Economic Policy Options and Outlook
Economists propose several policy responses to arrest the decline, including targeted investment incentives, export diversification, and a review of the energy tax framework. Some advocate a temporary relaxation of the constitutional “debt brake” to allow counter-cyclical spending on infrastructure and technological modernization. Others argue that structural reforms — reducing bureaucracy and encouraging digitalization — would better position Germany to compete globally.
Despite gloomy forecasts, there remain pockets of optimism. The renewable energy sector, logistics digitalization, and pharmaceuticals have shown resilience. However, without broader industrial stabilization, these bright spots may not be sufficient to offset losses in core manufacturing sectors.
Forecasts from leading economic institutes suggest that without substantial policy change, Germany’s GDP growth could stagnate at or below 0.5 percent through 2026, trailing both the Eurozone average and North American benchmarks. A prolonged industrial slump could also erode Germany’s traditional trade surplus, undermining its fiscal buffer and long-term competitiveness.
A Nation at a Crossroads
Germany now stands at a critical juncture in its postwar economic narrative. The choices made over the next year could determine whether the current downturn becomes a temporary contraction or the beginning of a sustained decline in industrial power. For many businesses and workers, the stakes are existential.
As Weidel’s stark warning reverberates through political corridors and factory floors alike, the question confronting Germany is no longer whether the slowdown is real — but how quickly and cohesively the nation can act to prevent the erosion of its industrial foundation.