Germany's economy is stagnating and approaching a critical point, with potentially dire consequences, according to Bloomberg. This situation threatens to inflict serious damage on the country's economy, signaling an urgent need for action.

A sharp slowdown in Germany's economic growth is primarily driven by the ongoing energy crisis. The loss of Russian energy resources has exacerbated the situation, and compensating for this shortfall will be a major challenge. Another key factor contributing to the downturn is the reduced competitiveness of major German automakers such as Volkswagen and Mercedes-Benz. These companies are struggling to compete with China's booming auto industry. As a result, the economic slowdown is taking a toll, with each German household losing about €2,500 a year.

Amy Webb, founder and CEO of Future Today Institute, believes that Germany's economy remains resilient and will not suddenly collapse, but policymakers should remain vigilant. According to her, the German economy is experiencing a gradual decline, pulling Europe down with it due to a domino effect.

According to German Vice Chancellor Robert Habeck, Germany's business model has been cornered by the loss of Russian gas. As an export-driven country, Europe’s largest economy relies on open global trade, but both the United States and China are increasingly closing their markets. China is pushing its electric vehicles everywhere, which poses a significant challenge to the German auto industry. German governments have failed to invest enough in infrastructure, tax conditions, and skilled labor for years, Habeck added.