The following article is adapted from a chapter in the report released this April by the Schiller Institute in Germany, China-Europe: Perspectives for Third-Party Cooperation.
The full report is an updated version of a study commissioned in June 2025 by Helga Zepp-LaRouche, chairman of the Schiller Institute–Germany, and EIR magazine editor-in-chief, with the intent of furthering collaboration between China and Europe to reverse the decline in the European economy, by conducting productive investments, in particular in the process of contributing to industrialization in Africa.
The economies of the European Union’s 27 member nations (450 million people) and other countries of Europe (an additional population of 294 million) are undergoing a “controlled disintegration,” perpetrated by Western financial networks, centered in the City of London, Wall Street, Brussels, and satellites, through EU “climate change” laws and regulations, and from extensive anti-Russia sanctions. In particular, the EU Green Deal, implemented in earnest during 2021-23, has imposed a phasing out of fossil fuels, and a ban on internal combustion engines (ICE), a policy now being reviewed, but probably too late.
The report’s project director is Claudio Celani, editor of the weekly EIR Alert in Germany. Authors: Dean Andromidas, Rainer Apel, Tobias Faku, Karel Vereycken.
The national economies of member states of the European Union have stagnated or declined in the post-2022 period, in particular, since sanctions began. The most serious crisis has hit Germany, the “locomotive of Europe,” which is threatened with deindustrialization. Government advisor Clemens Fuest has warned that the German economy is “in a real decline,” not a simple recession.
The automotive sector has been hit the hardest, and it might disappear if the trend is not reversed. Outside of automotive, the crisis is concentrated in energy-intensive upstream industries (chemicals, steel), and investment-linked sectors. In turn, the crisis has also affected consumer-serving industries, and exports.
The German economy suffered an unprecedented loss of 50,000 industrial jobs in 2024, and 120,000 more in 2025. Since 2019, a total of a quarter million industrial jobs have been lost. Overall,
• German industry lost 7-8% of output in three years: -2.5% to -2.7% in 2023; -4.5% in 2024; and -0.5% to -1.0% in 2025.
• Italy lost 4-5% of industrial output in three years: -2.0% in 2023; -3.5% in 2024; and -0.2% in 2025.
• French industrial production cumulatively declined by 1-2% in the period 2023-2025.
Let us analyze the situation by country, focusing first on the automotive sector, then certain other manufacturing sectors, and subsequently on energy.
