Industry accounts for the largest share of the German economy compared to many other countries, and the sector is mostly energy-intensive, meaning that German companies have been hit hard by the rise in energy prices that last year hit the highest levels in Europe.

Due to exorbitant electricity prices, more German companies are moving to the United States, and energy-intensive industries such as metals, paper, ceramics, and glass are breathing their last breath and may disappear as an industry in Germany.

After the outbreak of war in Ukraine, Germany ended its dependence on Russian gas, as German Economy Minister Robert Habeck announced in March 2022 that his country had quickly severed energy ties with Russia, and he seriously pledged to abandon Russian gas completely by 2024.

In contrast, liquefied natural gas from the United States has turned out to be much more expensive than Russia, and rising fuel prices have led to a sharp rise in electricity prices, while the production of wind turbines and other solar cells is minimal.

Compost instead of gas

But Germany seems to have replaced gas with Russian manure, and while previously imported 5 percent of the fertilizer required from Russia, that percentage has now risen to nearly 20 percent.

Berlin's purchases of Russian fertilizers increased by 334% after the gas was abandoned, but on worse terms, given the fact that the cost of producing fertilizers ranges between 80% and 90% compared to gas and energy.

According to IMF estimates, this year Germany will be the only country in the Group of Seven whose economy will not grow but contract, with consumer prices breaking records (just 6.2% in August), industrial production falling rapidly, inflation and public loans soaring, and business activity falling to its lowest levels in the past three years.

German economy hit

Former German Chancellor Angela Merkel once warned that economic cooperation with Russia was necessary and stressed that sanctions against Russia would hurt Berlin more than Moscow.

Other German politicians – according to the Turkish website – repeat Merkel's position, where a member of the German parliament for the Left Party, Sevim Dagdelin, told the newspaper "Berliner" that there is an opinion "that punishing Russia will have a lasting effect, but the reality was different, the Russian economy is recovering and Western sanctions are hitting the perpetrators."

Large and medium-sized German companies, surrounded by political constraints on all sides, are still cautiously hoping for everything to return to normal.

Marcel Fratzcher, head of the German Institute for Economic Research, said that rising energy prices "will remain a clear competitive disadvantage for Germany in the coming decades," explaining that political leaders and businesses "will need to offset these costs by increasing innovation and productivity."

Jan Hildebrand, deputy editor-in-chief of Handsblatt, Germany's first economic newspaper, told Al Jazeera that the pressures on the German economy will be significant in the medium term, given its dependence mainly on industry, which needs large amounts of energy and open markets, at a time when countries that are important markets for German goods are heading towards economic protectionism.