Germany’s Economic Model Is Broken, and No One Has a Plan B

INGOLSTADT, Germany—Christian Scharpf, the mayor of this city of 140,000, Germany’s second richest, is looking for ways to save close to €100 million.  

Carmaker Audi, headquartered here near the Danube river, used to pump over €100 million a year in municipal tax into Ingolstadt’s coffers through its parent, Volkswagen, but those flows dried up over a year ago. Audi in November reported a 91% decline in operating profit for the three months through September and has been cutting thousands of jobs in Germany.