The costs of German complacency: a disjointed Europe, and Spain on China’s radar

According to a recent report from the Centre for European Reform think-tank, Germany’s economic paralysis is no temporary slump but a structural crisis in the path of China’s commercial steamroller. While Berlin has misdiagnosed itself, obsessed with energy prices and bureaucracy, 'China Shock 2.0' has been demolishing its external competitiveness. The vacuum left by the sputtering European engine is pushing Spain to rewrite its alliances, running the risk of trading its historical dependence on Germany for a new technological subordination to China.

...In a report published this month by the Centre for European Reform (CER), entitled China Shock 2.0: The Cost of Germany’s Complacency, Sander Tordoir and Brad Setser warn severely and seriously of the magnitude of the Chinese challenge for Europe. The central thesis developed by the authors is that the German export model is no longer competing against an emerging economy in need of European technology, but against an industrial superpower capable of distancing Europe from China, from third markets, and progressively from the European market itself.