Two summits of industrial associations in Berlin in recent days show the tragedy of European industry leaders who denounce the ongoing deindustrialization but are unable to suggest solutions outside of the same neoliberal paradigm that caused the crisis.
The dramatic situation of the German machine-tool sector, the backbone of the German economy, was presented by VDMA president Bertram Kavlath at the 2026 Mechanical Engineering Summit in Berlin on Nov. 10-11. For the fourth year in a row, machine-tool production is sinking. “A year ago, I said here: We are angry. Today, I must say: We are stunned,” said Kavlath at the opening of the meeting. “We are stunned by the disputes within this government that are blocking urgent reforms,” he added. “Stunned by the whitewashing in so many government statements. Stunned by the increasingly visible decline of our country as a business location. And stunned by how recklessly social cohesion is being put at risk.”
Five days earlier, on Nov. 5, the industrial associations of Germany, France, and Italy gathered in the 8th Trilateral Forum of European Industry and issued a joint statement saying that “Europe is losing entire industries and supply chains, investment, jobs and skills. Urgent and decisive action is needed to reverse Europe’s de-industrialization.”
Both statements call for an increase in “competitiveness” as the solution, including strong action against so-called “unfair competition through government subsidies to overcapacity,” a clear reference to China. Although some of the measures called for are correct—such as reducing energy costs, scrapping Green policies, etc.—they do not challenge the framework of EU free-market policies and “block-thinking,” and thus are doomed to fail.
For instance, the Trilateral Forum called for “attracting private investment and prioritizing public spending”; it also endorsed budget discipline—which means social cuts and no national credit.
The case of the machine-tool crisis exemplifies the general economic incompetence. Although the German government has announced a plan for major spending on infrastructure, money has flowed into modernization and maintenance of existing infrastructure, and has produced no domestic orders for machine tools. Growth in orders came only from abroad.
Meanwhile, time to save the auto industry has probably run out. The new, “softer” version of the EU Green Deal has reduced the 2035 emission cap for the sector to 90%, which means that automakers can sell one ICE (Internal Combustion Engine) car for every nine BEV (Battery Electric Vehicle) sold. This makes it impossible to keep R&D in the traditional sector, as economies of scale collapse. Engines will be produced only in Korea, Japan, and China. In the BEV sector, European automakers have already lost their chance against Chinese cars. Brussels is considering raising tariffs on Chinese electric vehicles (EVs), as well as on other products, such as steel, which would trigger a trade war whose loser is easy to guess.
