There is a shadow hanging in Europe. The rising of Donald Trump in the White House reveals the transgressions of the economic laundry on the continent and military capacity. That is not found anywhere in Germany, the electricity industry has changed from two years of negative growth.

Today, allies in Germany, living in their own shadow of European largest economies, left facing questions about their own survival. That’s what the neighbor’s neighbor can see: The Czech Republic.

Within the Giant $ 348 billion groupswagen lies Skoda, a quiet success story for the Czech Republic as part of the post-Cower War Ascsension as made by long-term warfare.

The Czech Republic, also known as Czechia, also establishing the post-colld war economy in the same way in Germany: with an industrial study. Creating as a part of GDP with more than 20% of the country in the past 30 years, participating in Germany at the windustrial of deindustrialization.

The third part of the export of Czechia will go to Germany, while 20% of its imports from its closest neighbor.

Bonds between the Czech Republic and Germany are best shown by Skoda, the largest Czech Republic company, owned by the largest company in Germany, Volkswagen.

Skoda’s strength

Skoda contains an important group of many volkswagen groups, with also audi, chair, Porsche, and the Volkswagen brand itself.

The carmaker has changed by € 26.5 billion revenues of 2023, a large 26% increase of 2022, and equals approximately 10% of the economy of czonomy.

If this is an independent company, skoda will rank the top 150 in Fortune 500 Europe, as one of the top 10 Czech shipment on the list.

The automaker also did not worry about recent years like fellow automakers under Volkswagen Pemblelala. During the first nine months 2024, Skoda increased operating profits to approximately 35% compared to the same period of 2023, while the Volkswagen group in a total of 10% counting income.

Group profit in the first nine months 2024 of 8.3% also put it among the most useful brands of Volkswagen and well over the collective margin group of 5.6%.

Skoda was, according to David Havrlant, Chief Economist for the Czech Republic of Ing, the “golden egg” inside the Group of Volkswagen, he told wealth.

Carmaker sales are better to focus on Europe. About nine of 10 of the cars were given in Europe in 2023, with the rest of the Asia-Pacific. That appears to protect the manufacturer from falling ones experienced by Volkswagen, which built the dominance of the Burgeoning Consumer Market in China, which returned in recent years.

In fact, through 2024 skodes increases with 6.9% deliveries, compared to 1.4% reduction in Volkswagen Brand, a nearly 10% delivery in China will be given last year.

That variation from Volkswagen speaks louder than a variation between Czechia and Germany.

The Czech Republic, along Germany, struggled with 2024, with GDP reduced 0.3% of the end of Russian energy sanctions.

However the country is expected to rebound more louder than western partner, with growth in growth of 2.3%, close to the firms of german growth (IMF).

The Czech economy has proved more attractive for businesses looking for their footprint. For example, the country’s wages, are in the middle of their in Germany, lowing input costs.

The greater population as well as content as well.

“I say Czech consumer is not very sad than German consumer,” Ana Booto, Chief of Economic Research on Allianz Trade, told wealth.

Domestic need is expected to be a large GDP growth driver in this year, which reflects a higher consumer trust.

But the seemingly immortal bonds between Czechia and Germany continue to threaten the country’s economy.

Barriers in Czechia

The Czechaa manufacturing output works on Lockstep with Germany because the progress was later begun to fight producers of producers.

Ladislav Tyll, a teacher at Prague University of Economics and Business, amongst the manufacturers and supplies of the supply chain, the Sector of the Czechia supply in half million jobs.

“So straightforward, if any mistake … they are not in business, and this country can be financially broken,” Tyll told wealth.

Both countries have difficulty falling investments, creating a barrier to future growth.

“It is not good for the economies, and that does not sign any good in the coming years,” says Tyll.

One of Chezia’s main concerns for the economy of doing so is the oppressive climate targets. The country includes Italy in November to call for a leisure to EU climate rules That will lead to the prohibition of the selling of cars who share 2035.

Allianz says Booka 2025 a year of transit for cargo and economies they occupy. On one side, they need to raise their production of vehicles and hybrid vehicles to keep environmental regulations. On the other hand, it means the flow of more competitive markets entered with cheap Chinese-made competitors.

“It also meant some impact on the turnovers of Czech suppliers basically involved in German car makers, not only the number, but also the price.

In other letter of writing mostly about the Czech economy. He said there were four stages of structural crisis that a country must pass before the policies work.

“You need to know that there is a problem. Second, you need to accept it your problem. Third, you need to force what you do. And you will do it.”

The Czech Republic is a place before the stage three and four when part of its automotive sector, as Havrlant, while he thought Germany was covered with zero points.

As a result, Havrlant believes that the Czech economy slowly declares himself from Germany.

“Their order books have been bad for such a long time that until now, it was always enough to wait until things got better, but that’s not the case anymore,” Havrlant said of Czechia and Germany’s relationship.

politicianAl Headwinds

Czechia’s political story is similar to Germany and, increasingly, throughout Europe.

Like Germany, Election Beckon in 2025, and has the same tune in polling population in both countries.

Amongst the alternative for Germany (AFD) in Germany, the National Rally in France, Italian brothers in the SPORMIT Polical Party ready to upset the status quo.

So followed the same jingoististic patriots for Europe, the prolonged kerosist party climate scheduled to destroy the election later than 2025.

Tyll said the potential victory of patriaries for Europe is likely to have a positive effect.

However, it is the Election of February in Germany that is more dangerous for the Czechia economy.

He was worried that increasing an influence on distance AFD could cause volkswagen to target job cuts outside thousands of employees.

The country hopes Germany recognizes the importance of “golden eggs” and deeper association that seems to be czectia more than its ally.

The note to the editor: a version of this article first appeared at fortune.com on January 21, 2025.

This story originally shown Fortune.com

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