Finance & economics | Cause and consequence

Germany’s economic model is sputtering. So are its banks

Politicised governance and a diminished private sector undermine competitiveness

A bicycle chained in front of the savings bank Sparkasse in Hannover, Germany
Image: Dreamstime

Germany’s economic model is known for close relations between bosses and unions; the Mittelstand, the country’s world-leading manufacturing firms; and the political system’s federalism, which spreads prosperity widely. Another ingredient is less renowned but no less fundamental: the country’s banks, many regionally focused, provide long-term funding to Mittelstand companies nice and cheaply.

This article appeared in the Finance & economics section of the print edition under the headline “Broken banks”

From the September 2nd 2023 edition

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