Germany is experiencing a significant capital outflow amid a political crisis.

Germany, the largest economy in Europe, is facing an unprecedented crisis of competitiveness. According to the Bundesbank, the net capital outflow from the country since 2010 has exceeded 650 billion euros ($700 billion), with nearly 40% of this amount occurring after 2021, when Chancellor Olaf Scholz's coalition came to power.

As reported by Bloomberg.

The victory of Donald Trump in the U.S. presidential elections could accelerate this process, as German companies are compelled to increase investments in the American economy to avoid potential tariffs. The situation has escalated to the point where Scholz dismissed Finance Minister Christian Lindner due to disagreements over the economic growth strategy. This led to the first early voting in the country since 2005.

German industrial giants are increasingly relocating their resources abroad. Among them are the chemical conglomerate BASF SE, automotive parts manufacturer ZF Friedrichshafen AG, and home appliance producer Miele & Cie. KG. A notable example is Siemens AG, which has invested 30 billion euros since 2020, most of which has gone towards foreign acquisitions and expansions. The largest domestic project of the company was only 750 million euros.

"There is virtually nothing in Germany that favors investment," stated Christian Kezer, global head of the tax department at Siemens, during parliamentary hearings, citing low growth and burdensome taxation.

Experts note that the German business model of the past is shattered. High energy prices, outdated technologies, and excessive bureaucracy continue to deter both national champions and foreign investors. Without radical changes, the country risks falling into prolonged stagnation and lagging further behind other developed industrial economies.

"The economy is not functioning. We are witnessing a massive capital outflow," declared Friedrich Merz, the leader of the Christian Democratic Union, which is leading in opinion polls.

Background. Earlier, Mind reported that despite the influx of quick congratulations from European politicians to Donald Trump on his victory in the presidential elections, there is confusion in Europe amid ongoing uncertainty in U.S. politics regarding the EU.