Germany's Steel Industry Collapse: The March Toward Green Socialism

 Germany's steel industry faces a severe crisis, prompting the ruling Social Democrats (SPD) to propose a "crisis roadmap" that may lead to nationalization if current measures fail. The sector's decline reflects broader issues within Germany's industrial economy, and there is increasing pressure for government intervention.

• Industry Decline: Germany's steel production has dropped over 30% since 2018, with a 12% decrease just in the first half of the current year. Crude steel production is expected to fall to 29 million tons this year from a peak of 42.4 million tons in 2018.

• Capital Flight: Companies like ThyssenKrupp and Salzgitter AG are struggling, and around 30,000 of the 120,000 steel jobs have already been lost, with capital relocating to more profitable areas like China and the U. S.

• Green Steel Production Problems: The highly demanding and costly “green steel” production process is declining rapidly, alongside conventional steelmaking, underlining the struggling economic state.

• Government Responses: Instead of addressing the root causes, the SPD is focusing on subsidies to combat what it calls “market failure. ” New funds from both Berlin and Brussels have been mobilized to support the industry without devising effective long-term solutions.

• Ritual Summits: Politicians are engaged in "talk shops," summits meant to show they are taking action. These gatherings generate promises to provide job security and reduce regulations, but do not result in real reform.

• Call for Minimal State Intervention: There’s an emphasis that the government should play a minimal role in the economy to facilitate real solutions. The current practices are seen as failures that maintain the status quo rather than addressing industrial decline.

• SPD's New Focus: The SPD’s new strategy appears cosmetic, using the slogan "We have understood" to convey a connection with affected workers, but their approach typically leans towards increased state involvement and subsidies.

• Path to Nationalization: Current SPD documents suggest that in extreme cases, the government may take equity stakes in struggling steel firms, which could lead to nationalization as a more common response.

• Underlying Issues: The causes of the industrial crisis include an energy crisis, heavy regulation, and a focus on CO₂ reduction that undermines competitiveness.

Germany’s steel industry is facing a collapse driven by economic missteps and costly environmental goals. Without a fundamental change to embrace market principles and reduce the state's role, there seems to be no path to recovery, risking further decline into socialism masked as environmental policy. Future generations may need to address the challenges created by current interventions in the market. 

https://www.zerohedge.com/markets/germanys-steel-industry-collapse-march-toward-green-socialism