While an Irish developer celebrates billion-euro revenues, German bakers are closing their shops. The modern economy is becoming a game of scale, where the cost of regulation and raw materials eliminates the weaker players.
The price of a liter of diesel in Germany has broken the psychological barrier of 2.00 euros, and local bakeries are disappearing from the map faster than at any time since 2014. Simultaneously, the Irish Cairn Homes is closing the year with revenues close to 1 billion euros.
The European economy has entered a phase of brutal selection. The thesis is clear: in the face of supply shocks and bureaucratic pressure, survival has become a function of operational scale, not just product quality.
Costs That Kill Slowly. The German craft sector, the historical backbone of that economy, is cracking under the weight of costs. A report by the Creditreform agency leaves no illusions: the number of bankruptcies has reached its highest level in a decade. Small companies are unable to absorb the rise in energy prices that followed the aggression in Iran.
A lack of labor is paralyzing growth. The labor market gap officially stands at 200,000 workers, though the industry suggests this is just the tip of the iceberg. Without certified installers, the German energy transition, Energiewende, remains on paper.
Chancellor Olaf Scholz's government refuses to intervene. The federal cabinet rejected the idea of a fuel price brake, even though the Association of Gas Stations speaks directly of speculation. The Minister of Economy for Saxony-Anhalt, Sven Schulze, demands protections, but Berlin remains deaf to these appeals.
„Das ist reine Abzocke” (It's a pure rip-off) — Association of Gas Stations
The Size Premium. At the other end of the spectrum are entities with capital. Irish Cairn Homes increased production by 35 percent, delivering 2,365 homes in 2025. The company plans to double this number to 6,000 by 2027.
A large player can manage the supply chain. The rise in construction material costs, which stifles small developers, is for a giant listed on the Dublin stock exchange merely a variable in a spreadsheet that can be balanced by process efficiency.
A similar mechanism is visible in Rostock, Germany. The company EEW SPC received a key environmental decision for the expansion of its monopile factory. This is an investment in critical infrastructure for offshore wind farms. The offshore sector in Germany has been developing since the launch of the Alpha Ventus farm in 2010, becoming the domain of large industrial consortia capable of multi-year investment planning.
Obtaining administrative approval in Germany is an exhausting process. For EEW SPC, it is another step in their strategy. For a small craft workshop, Bürokratie is an insurmountable barrier, often ending in the liquidation of the business.
The Price of Information. Regulations also hit the giants, but they can afford it. The Polish Office of Competition and Consumer Protection (UOKiK) imposed a total of over 70 million PLN in fines on the Biedronka and Kaufland chains. The reason: incorrect labeling of the country of origin for fruits and vegetables.
The President of UOKiK, Tomasz Chróstny, enforced the consumer's right to reliable information. The Biedronka chain will pay 63 million PLN, and Kaufland nearly 7.8 million PLN. Administrative courts dismissed the entrepreneurs' appeals, ruling the decisions final.
Effectiveness of UOKiK Interventions: Labeling errors (before): 30-40% → -; Labeling errors (after): - → 2-5%
These fines, while nominally high, represent a fraction of these chains' turnover. More significant is the result: the percentage of irregularities dropped from 40 percent to just a few percent. This is proof that regulation works when it is aimed at entities that have the resources to adapt.
One could argue that the crisis in crafts is an opportunity to refresh the market. Young people, fleeing the uncertainty associated with artificial intelligence, are starting to see a manual trade as a safe haven. Statistically, a master's diploma guarantees higher income than many humanities degrees.
The problem is that the enthusiasm of the younger generation hits an entry barrier. Taking over a workshop requires capital, and running it requires navigating a thicket of regulations that finished off their predecessors. Without systemic support and the deregulation called for by the ZDH, a change in social attitudes alone will not fill the gap left by fallen companies.
We are observing the formation of a two-speed economy. On one side, we have Rostock and Dublin, where big industry and development absorb the shocks. On the other – the German provinces and Polish store shelves, where the cost of adapting to reality is shifted onto the weakest links in the chain.
It is easier to pay a 63 million fine for bad labels than to survive a month in a bakery with electricity and diesel prices dictated by war. The market abhors a vacuum, but increasingly, it also abhors small players.
Perspektywy mediów: The text emphasizes the necessity of state protection for weaker market participants and the role of the regulator in disciplining corporations. The article points to overgrown bureaucracy and energy costs as the main causes of the collapse of entrepreneurship.