Wolfgang Münchau has, for more than thirty years, been one of the most acute and penetrating commentators on the European Union, writing in the Financial Times, the New Statesman and elsewhere. What I mean to say by that, of course, is that I have often found him supporting my own views and prejudices in language rather more persuasive than I could conjure up. He writes as well about politics as he does about economics, a rare skill. He understands decision-making in the EU and is free of the illusions about the EU shared by many commentators on both sides of the Brexit divide. 

He is never afraid to offer an opinion, sometimes expressed in very trenchant terms. Nor is he afraid to change his mind. He supported the creation of the euro, but later concluded that its intro­duction, and EU enlargement, were mistakes, forecasting that, as a result of them, ‘the EU is simply going to wither away and turn into a ghost.’ It is still clanking its chains twenty years later, but never mind. He argued during the euro crisis that Greece should and would leave the euro and that Ireland should follow the UK out of the EU, even though he saw Brexit as a mistake. And he considers German reunification ‘the greatest example of economic mismanagement in the history of the world’ – quite a grand claim. Team Truss thought they had that accolade sewn up. More recently, his views have changed. The economic consequences of Brexit will not be as severe as many expect, he now believes. He also thinks that the UK’s economy is likely to be more successful than Germany’s in the next decade.

Kaput is about the problems facing Germany rather than the successes of the UK. Münchau (the clue is in the umlaut) is very pessimistic about his native land. It can do little right, in his view. In the German version of Winnie-the-Pooh, Pu der Bär, he is I-Aah, the gloomy donkey. But I-Aah often has a good point to make, and so does Münchau.

The core of his argument is that the German economic model is broken. How so? Let me count the ways. For decades it has been built on engineering excellence driving exports of manufactures, particularly cars and machine tools. Now that Germany’s Asian rivals have enhanced their productivity, that model increasingly depends on access to cheap energy. The Germans placed two large bets to sustain this model. The first involved establishing a warm and cuddly relationship with Russia, an approach pioneered by the former SPD chancellor Gerhard Schröder, whose ties with Putin were (and indeed still are) remarkably close, and sustained by Angela Merkel. She did nothing to reduce Germany’s reliance on Russian gas. In hastily closing down the country’s nuclear reactors after the Fukushima disaster, she even increased it. The second bet was on China and its apparently insatiable appetite for Audis and Volkswagens. The Germans turned a Nelsonian eye to the Tiananmen Square massacre. The order book was just too large to compromise.

The Russian bet has now gone south. The Nord Stream pipelines are closed, and unlikely to reopen any time soon, if at all. The war of attrition in Ukraine makes Germany’s Ostpolitik look naive. Yet the Green Party’s hostility to nuclear power has cut off the only possible route out of the Russian embrace. There just isn’t enough wind in Germany, and its coastline is relatively short. The China bet has gone south too. China is now a larger car exporter than Germany. It caught the electronic vehicle wave well before the Germans woke up to what was happening. Fossil-fuelled VWs are now struggling for market share.

Furthermore, Germany has fallen behind in new technologies. Its digital networks are old-fashioned. Its famed production line of engineering apprentices has not adapted to furnish web designers. Its conventional infrastructure is dated and crumbling. Anyone who has travelled on the German rail network recently will recognise the problems he describes. Much of the autobahn network remains two-laned.

So far, so familiar. But Münchau spices up what could be a dull tract with persuasive descriptions of the close and personal relationships between German politicians and key German families, some of whom contain deeply unpleasant people with dubious pasts. I was seated next to Ferdinand Piëch, at the time the boss of Porsche, at a Davos dinner, an experience I never wish to repeat. (To be fair, he probably doesn’t either: I didn’t show enough enthusiasm for his nought-to-sixty stats.)

Whether Münchau is right in ascribing particular blame to the SPD, which now forms the government, rather than Merkel’s CDU, I could not say. He really cannot bear the SPD, which he regards as institutionally corrupt. Merkel seemed to me to follow the Schröder line quite closely. But his overall case is strong: Germany has backed itself into a corner and the numbers confirm that. Growth has stalled and populist parties on the left and right are reaping the whirlwind. The far-right AfD, as recent elections have confirmed, is especially popular in the eastern states.

It is, of course, true that people have generally lost money betting against the German economy in the past. Maybe this time will be no different. But Münchau makes a strong case here that the German economic miracle is over. I hope he is wrong, but the Financial Times now tells me that the value of Thyssen Krupp, based on its current share price, is negative. I struggle to understand what that means, but it doesn’t sound good.