Germany has been the keystone of the failing EU. Does it intend to remain so, or is it time to pursue its own interests?
by Francis Lee for the Saker Blog
Germany has been and still is the most important economy in Europe, the export-driven colossus and if not yet the most important imperial power; that designation belongs to France with its Force de Frappe (Nuclear Strike Force), and additionally the UK which is also a member of the nuclear club but has since left the EU remains as a loyal – and oh so loyal! – member of NATO. (1) However, Germany is without question the most dominant country in Europe and still the main creditor and funder of euro states. Looking back to the rise of (West) Germany was a key presence in the formation of the European Coal and Steel Community (ECSC) in 1951. These various states pooled the coal and steel resources of six European countries: France, Germany, Italy, Belgium, the Netherlands, and Luxembourg which became known by the acronym – BENELUX. These states would be collectively known as “the Six”. It was argued that the pooling of coal and steel resources greatly reduced the threat of war between France and (West) Germany.
It was perhaps entirely predictable that Germany with its system of Bismarckian style guided capitalism would emerge to poll position in this imperial club. At the time France had other, imperial and pressing commitments in Algeria and Indo-China, the British had commitments more or less everywhere East of Suez, and even little Belgium had problems in the Congo (Zaire). Germany had no such incumbrances on its economic development and was thus free to power ahead with its version of guided, bank-funded capitalism, and avoid the pitfalls of Anglo-American financialised capitalism. Under Chancellor Konrad Adenauer and Economics Minister Ludwig Erhard Germany’s rebirth was dubbed the Wirtschaftswunder (economic miracle). A far-reaching contract between business and labour unions allowed the rapid rebuilding of industry and strong growth, creating the foundations of an economic powerhouse.
THE GERMAN MODEL
The centrality of Germany and German economic policy in this shifting economic montage requires attention to the gradual increasing dominance of what is the de facto European economic dynamo. It was perhaps inevitable that Germany would – in economic terms at least – become the regional hegemon in this continental configuration. After all,
‘’ … it had a globally competitive industrial base, pivoting on automobiles, chemicals and machine tools. Its exports enabled it to command vast surpluses on current account thus providing the wherewithal to lend globally.’’(2)
The peculiarities of the Anglo-American financialised system has not been replicated in Germany. To be sure Germany has a large and growing service sector similar to the financialised Atlanticist models this much is true; but Germany has also systematically defended its industrial sector, not least by manipulating the exchange rate to protect its exports of which many go to the other member states of the EU. The German manufacturing sector enjoys high levels of productivity, is export-based with relatively strong labour unions in wage negotiations compared to the rest of the private sector. But this did give rise to a two-tier labour market. The ‘good’ jobs were to be found in the export industries and the not so good jobs tended to be located in the internal domestic service sector.
‘’What happened from 2003 onwards to enable German capitalism to exploit its workers more intensely than before? In 2003-2005 the Social-Democratic Party (SPD) government implemented a number of wide-ranging labour-market reforms, the so-called Hartz Reforms, after one Herr Peter Hartz. The first three parts of the reform package, Hartz I-iii, were mainly concerned with, (i) mainly creating new types of employment opportunities (ii) introducing additional wage subsidies, (iii) instructing the Federal Employment Agency. The final parts of Hartz (iv) was implemented in 2005 and resulted in a significant cut in the unemployment benefits for the long-term unemployed. Between 2005 and 2008 the unemployment rate fell from almost 11% to 7.5%, barely increased during the Great Recession of 2008 and continued its downward trend reaching 5.5% at the end of 2012, although it is still higher than was the case during the global period of expansion in the 1960s.’’ (3)
GERMAN BANKING – FUNDS INDUSTRY AND DEVELOPMENT AT ALL LEVELS.
Perhaps what was more important has been the banking system in Germany and its relationship to German industry.
1.1 Savings banks (Sparkassen and Landesbanken)
German savings banks are usually owned by the cities and villages. Formerly, each city had its own savings bank. Over the past 20 years, many savings banks have merged due to the competitive situation. As opposed to the big private Banks – Deutsche Bank, Commerz Bank whose main interests are in housing and stock market investment – the small and medium banks operate with a local focus.
Although the savings banks have been losing customers for a number of years, they are still among the best-known. Often, the accounts are open, because the savings bank is “on the spot”. Later, when one has to deal with more finances, then there is often a change to another bank that is more cost-effective or offers better services. These banks provide funds to industry at good rates of interest, and this particularly applies to small start-up firms.
1.2 Volksbanken / Raiffeisen Banken (cooperative banks)
This is the next best-known bank organization in Germany. VR-banks – their abbreviation – are cooperative banks (Genossenschaftsbanken). They are organized similar to associations and are owned by their members. Members may only purchase very few shares of the bank so that no single person is enabled to have too much influence on the business of the bank.
Just like the savings banks, the Volksbanken have to deal with a loss of customers. Although they have many branch offices, they can often not keep up with the price and service of the modern direct banks. In Germany, there are several hundred different VR-banks. They belong to the cooperative banks. Another successful innovation and feature of German development was the technical education of the German labour force.
GERMAN TECHNICAL EDUCATION – SMEs AND THE MITTELSTAND
The success of the German economy is driven by its small and medium Enterprises ( SMEs), a group to which more than 99 per cent of all firms in Germany belong. These companies account for more than half of Germany’s economic output and almost 60 per cent of jobs. Approximately 82 per cent of apprentices in Germany do their vocational training in an SME.
These small and medium-sized companies (SMEs), also known as the ‘Mittelstand’, (4) are the country’s strongest driver of innovation and technology and are renowned across the world. Companies that want to keep their competitive edge must be at the forefront of new developments. A study on SMEs commissioned by the Federal Ministry for Economic Affairs and Energy shows that innovative SMEs will continue to drive the success behind the ‘Made in Germany’ trademark. Provided that they embrace new trends, particularly digitisation, and that they find ways of recruiting the skilled labour they need, even in times of a skills shortage, SMEs have every opportunity to remain successful in their chosen specialised niche markets.
The Federal Ministry for Economic Affairs and Energy wants Germany’s SMEs to embrace new challenges and remain vibrant, strong, and innovative. This is why the ministry is working on many levels to strengthen the Mittelstand’s competitiveness, its capacity to innovate, and its ability to create jobs.
SMALL, DIVERSE, DYNAMIC, PIONEERING
Germany’s small and medium-sized companies (SMEs) play a defining role in the country’s economy. Germany’s economic model derives its strength not from a small number of dominant players, industries, or industrial regions, but from the fact that Germany has a wide range of companies – small, medium-sized and large – that are based in locations all across Germany, specialise in all sorts of different sectors, and often form close networks with one another.
Germany’s Mittelstand, is extremely diverse. Family-owned companies that were established generations ago, trendy start-ups, traditional crafts firms, self-employed people and service providers, retailers and freelancers, pioneering high-tech companies, regional suppliers and global players. The size of these SMEs ranges from one person to several hundred employed across the globe. The Mittelstand has many well-established brands, but also newcomers and lesser-known brands that still deliver the same standard of quality, precision and innovation. It is this high level of diversity that makes it so strong.
The Mittelstand also acts as a strong partner for large corporations, across the entire value chain. Mittelstand companies are often highly specialised and produce the type of up and downstream products that enable large corporations to create innovative and complex products, services and systems solutions
Moreover, the Mittelstand is global in its reach. Some 44 per cent of German companies export their capital goods or intermediate goods to other markets, thereby contributing to the success of the German economy. At least one in two German firms that turn over 2 million euros or more per year are exporting companies. Even small companies benefit from venturing on foreign markets. This is attested by the fact that even very small firms generate an average of over 20 per cent of their turnover from exports.
THE TWENTY FIRST CENTURY AND THE DOUBLE WHAMMY
The German Economic model which had performed so well compared to its competitors – during the period from the Wirtshaftwunder until the 21st century – outmatched both European and North American rivals. But of course this golden age was to stutter in the late 1990s – the dot com bubble – and collapse completely during the 2008 and the property price debacle. For all its efficiency the German economy was, like the rest of the world, engulfed in the double whammy of the EU/euro crisis and the 2008 blow-out. Figures for growth make interesting reading.
(These are World Bank figures for declining growth rates in both the developed and developing economies for the period of 1960s through 2009.
1960s = 4.9%
1970s = 3.93%
1980s = 2.95%
2000/09 = 2.58%
It should be by now common knowledge that the global economy has been on a downward path for decades as can be seen from the above figures. Moreover, with the possible exception of China and some other East Asian dynamos, these figures did not improve in the post-2008 era, quite the contrary.
Suffice it to say that the 2007/2008 explosion of the speculative bubble was avoided with massive injections (hmmm, sounds familiar) of ‘liquidity’ basically the extension of credit to the banking sector. Starting in 2008 the European Central Bank (ECB) lent the European banks money at an interest rate of 1%. (As did the Fed on the other side of the pond.) Predictably these same banks used that liquidity for speculation rather than lending to the productive sectors. In passing, we may say the Anglo-American financialised model – at least for Europe – didn’t work and given the objective situation shows no signs of working. In addition, the euro was stillborn with different rates of growth and trade between sometimes diverse member states. The euro was extended to other euro states, and particularly those in the southern bloc, which were far from enjoying the levels of productivity of the northern bloc. Europe’s weaker and less productive countries and thus of international competitiveness could not live with Germany’s productivity levels and low costs. The southern bloc could not devalue the euro – the centre-piece of the euro economy – and they ran up trade deficits with the German-dominated northern bloc which consistently ran up trade surpluses. Most commentators knew this apart from the brain-dead euro-elites who seemed impervious to the situation.
Given these fundamental geopolitical and economic changes Germany would be wise to now examine its options.
At the present time, another deeper and all-encompassing economic and financial crisis has occurred. The EU has, for better or worse, already had to swallow the departure of the UK from the EU; and it is not too difficult to imagine that this is only the beginning of a process of dissolution, particularly in light of the present and future possible political/economic developments. Moreover, the whole brouhaha which has already been instanced by the Nordstream-2 episode represented a win for one particular German faction – in this instance the business class – which now appears to be reorientating to a longer-term strategy of a pivot to Eurasia. It would appear to have won against the political class – including those lovely Greens who seem hot for a war against Russia. The German political and ideological class would appear to inhabit a different time-warp, circa 1989 and the fall of the Berlin Wall and moreover being hopelessly fixated with NATO, liberalism, globalism and everything American, including woke ideology.
The same German business elite, however, seeks parallel factions together with other similar groupings in other financially strong and reliable countries, who wish to seek the expansion of Germany toward China and Russia. There are obvious reasons for this move. Both these countries have immense reserves of raw materials. Secondly, the level of Chinese economic growth and the size of its market is way above those of the EU. Thirdly, Germany’s relative technological superiority is an ideal for the inter-trade appropriation of Chinese surplus value. Fourthly, if bilateral trading relations continue at the current pace, Beijing will become Germany’s main trading partner by early 2023 at the earliest. Fifthly, for China, Germany, is the optimal country for the best investment opportunities.
So this is the current situation with the Nordstream-2 instalment concentrating the minds of those who have read the runes of Germany’s future development with newer and dynamic trading partners east of the Oder-Neisse line. We shall wait and we shall see for such developments.
(1) In this respect the French and British nuclear deterrents should be seen as little more than geo-political phallic symbols by two second-rate declining powers.
(2) Costas Lapavitsas – The Left’s case against the EU – pp, 33, 35)
(3) The Long Depression – Michael Roberts – The Hartz Reforms – The Failing Euro Project – pp.153-155.
(4) Mittelstand – commonly refers to small and medium-sized enterprises in the German-speaking world, particularly in Germany, Austria and parts of Switzerland,
BENELUX stands for BElgium + NEtherlands + LUXembourg. The three of them. Not “The Six”.
Nuclear warheads, and then by the hundreds as France and Britain possess, have nothing to do with “phallic symbols”.
Sloppy homework. Phallic symbology.
I don’t know my missile is bigger than your missile!
BENELUX IS THE name of the customs union created in 1956, named by the initial syllables of its three member states: BELGIUM, NETHERLANDS, and LUXEMBOURG. The six, were the founding group of European nations – to wit: The European, coal and steel community consisting of Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany first established earlier in 1951.
Agree – the six is the old Common Market
‘Wither the Little US’ or ‘Wither the the Aspiring AZ Empire, European Division’ might have been alternative titles.
Deutschland does indeed face some daunting challenges now that daddy across the water has been forced to take the Corvette away. Alas, sycophancy always poses some fairly serious limitations.
First world Germany, continue to adjust to third world Germany. You might even grow to like it over time… or not.
Germany will look East. The business interests will get their way. If they don’t then I would expect German businesses to re-locate to Russia and China – there is already a lot of German manufacturing there. The lure of cheap energy and resources, and friendly tax and investment incentives would be irresistible.
“Germany has been the keystone of the failing EU. Does it intend to remain so, or is it time to pursue its own interests?”
A ridiculous question. The EU is designed to propel Germany’s economy while destroying that of southern Europe.
By having a single currency while most of the EU has a higher rate of inflation, Germany has managed to undermine the economies of France, Portugal, Spain, Italy, Poland and Greece. Obvious.
What happened in Czechia is illustrative. VW bought up Skoda for a song. They made promises that they would use components (cars are made up of components) from local companies. In no time at all, all components were bought from German companies such as Bosch. The result was the demise of the local components industry. Bosch was now able to buy these companies for a song and move some of the component manufacturing back to Czechia. However, the profits were now all going to Germany.
Multiply the above example hundreds of times and you will realise why Germany is so successful. Without the EU, all of this would not have been possible.
True Germany has been able to export massively to the EU countries but has she been paid? Have a look at the trillion euros owed to Germany under the Target 2 EU clearing system. If the Euro breaks up or Italy and Spain leave there is no mechanism to recover this money and no interest is paid on it. See this colourful graph and wonder: — https://www.eurocrisismonitor.com/
This was never supposed to happen. Interestingly it reflects what happened in a similar clearing system between linked economies under the Soviets. And you guessed it, after the break up of the Soviet Union Russia never got paid.
I my opinion the desctrution of local industries was already initiated with the dissolution of ČSSR. Though the flooding with western goods was played the pivotal role in destroying local industries
My understanding of the trends in the German automotive component sector, in particular Bosch, is that a vast amount of German manufacturing has now relocated to India. But the central message that you state, is correct…it is still a win-win for Germany as the manufacturing is done at low cost in India but the vastly higher profit margin benefits the shareholders of Bosch since German labour is getting to be too costly. Some traditional German component makers are now so marginalised that they have been taken over by Indian businesses…..essentially the Indian businesses pumped finance into these German operations…. win-win again for Germany…
Mr Francis Lee describes a Germany that no longer exists. Germany today is deeply sick and in an advanced state of decay. There are hundreds of challenges and under the administration of Merkel, nothing, absolutely nothing has been done to adress a single pressing issue. Her policy was always about delaying important decisions into the long term future. Any painful and unpopular reform, that could have cost a few percentage points in the next election was carefully avoided. As a result the country has been moving forward only due to inertia but that momentum will soon be gone.
Let me try to enumerate the biggest issues:
-The highest electricity prices in the whole world, and still rising. The Mittelstand won’t survive this.
-A completely ideological and crazy energy transition. Switching off new coal and nuclear power plants, even blowing them up so as to make the transition irreversible. There will be energy scarcity and rationing.
-An increasingly woke education system. Very few young Germans still chose to study MINT, those that do, arrive at their first university year with appaling knowledge in mathematics.
-A crumbling infrastructure. 10% of all the bridges in Germany are now considered to be at risk of collapse. It took 15 years to build an airport in Berlin and the whole procedure was a mess of incompetence, planning and construction failures and corruption.
-A demographic crisis, a very old German population that is quickly diminishing and a mostly failed immigration. Of the 2 million ‘refugees’ that arrived in 2015, mostly young adults, barely 20% are working 6 years later.
There are many other issues, I couldn’t possibly enumerate them all. What I want to say is that the picture of an economically vibrant Germany that so many in the anglophone world still seem to hold, is utterly wrong. The long term future of Germany is bleak and there are practically no societal forces left that are opposing this collective suicide.
The fundamental issue in my eye is the lack of an idea of a nation. Modern German culture is a self-hating cult of guilt for the crimes of the 3rd Reich, mixed with wokeism and pro-EU utopianism. This is not a moral-cultural foundation for building a successful country.
Unfortunately, I don’t see any prospect for a Beijing-Moscow-Berlin alliance. 2 decades from niw, Germany will simply have faded away into irrelevance.
”Modern German culture is a self-hating cult of guilt for the crimes of the 3rd Reich, mixed with wokeism and pro-EU utopianism. This is not a moral-cultural foundation for building a successful country.”
It should be noted here that the ”self-hating cult of guilt for the crimes of the 3rd Reich” is mostly a matter of Zionism’s extortion racket with devoted German accomplices like Axel Springer Verlag. Today, this tender loving care for the human race also incorporates the sexual minorities, courtesy of the Globo-Homo lobby. But the Reich’s orgies of genocide in the Balkans, Belarus, Ukraine, Poland, and Russia certainly do not count here. Clearly, it would be somewhat counterproductive, given recent developments with Germany meddling violently in the fiirst three of them. Amusingly, in the case of Poland and Ukraine, the population there is so schizophrenic that there really is no need for German ”apologies” of any kind. Can be treated as the faeces they are as long as they embrace ”European values”. As regards Die Grünen, they stand out as a particularly nauseating stew of wokes, EU worshipoers, and rabid Russophobes — Euro-trash par excellence.
This is fiction. Germans compartmentalise and deny. If you want them to recite a catechism about Hitler and the terrible Nazis they will. ……..but you see they were not “Germans”
Quite why my father’s generation were killing Germans rather than members of the Nazi Party eludes me – maybe because German uniforms and German planes and German guns were killing them – to pretend it was an alien crew from the spaceship called “Nazis” is a get-out developed by the Americans and British when they had James Mason make propaganda films like “The Desert Fox” to portray Erwin Rommel as “a good German” when he was Hitler’s favourite general and given rapid promotion as such.
It is all BS. Hitler was so mainstream and there is no real guilt.
A most exceptional comment. Many will fail to grasp its prescience and importance, unfortunately. The descendants of those systematically massacred, cleansed and assimilated by the Franks, for well over a thousand years, understand that Hitler was merely employing the modern incarnation of drang nach Osten.
My personal belief is todays’ German elite are every bit as xenophobic, horrific and calculating. I have some pity for the average German and Austrian, but make no mistake, many still share the same irrational superiority complex and absolute disdain for the Indigenous Europeans, whose lands and culture they’ve stolen.
Hitler was merely an all too real depiction of German and Austrian barbarism and hatred for the indigenous Slavs and other Untermensch.
Some powerful forces in the United States and England, not only facilitated these unimaginable crimes, later these countries saved Nazi abominations from Germany, Croatia, Austria, Hungary, the Netherlands and Ukraine. Not only did they deny justice to the victims, they heaped blame and greater misery on their most loyal allies. What a messed up world, sir.
P.s. If you’re interested in more historical background info, I recommend you reading the Saker’s article about Draza and a few of Ken Leslie’s articles here at the vineyard. I’ve also linked a short 5 min. video of real American heroes, the American soldiers from WWII retelling their experience fighting in Europe and their surprise and sadness with American duplicity. You’ll find more testimony and info in the Draza documentary featured in the Saker’s article:
Short interview with U.S. WWII vets:
Germany’s demographic crisis! Can you name me one European country that doesn’t have a demographic crisis? Starting with Ukraine.
Moreover, from 2000 to 2011 the Italian and German trade balances moved in opposite directions with, Germany being the winner. In 2012 Germany had a trade surplus with 1 trillion euros – a record, and the eurozone only accounted for 40% of its exports. Germany’ ability to penetrate foreign markets is relatively independent of the lack of competitive devaluation of its eurozone partners. Rather, Germany’s trade surplus’s with the EU depends mainly on its technological superiority. Looking back and following the introduction of the Economic Monetary Union, Germany emerged as a major industrial exporter and a major lender across Europe and the world … in so doing Germany set the ground for the outbreak of the Eurozone crisis in 2010 as well as for the division of the EMU into a core and a southern periphery.
Does this sound like a state which is fading away into irrelevance?
I did not claim that the other nations of Europe were better off demographically. Having large trade surpluses within a European market that is shielded from the outside world and in which Germany is the only true industrial power is not the accomplishment that the raw numbers suggest. And is Germany really getting paid?
I refer to the comment @ Theophilus on August 22, 2021 · at 2:08 am EST/EDT
who is asking a very pertinent question about the Target 2 balances.
Don’t get me wrong, I don’t say that Germany is irrelevant today or in 3 years or in 5 years, but the long-term perspective is very problematic to say the least. Yes, Italy, Ukraine, Greece and many others are even worse off, but does that help Germany?
You’re looking at it entirely from an economic point of view. What about other social issues mentioned above? The next-generation Germans don’t have the technical expertise that their previous generations enjoyed.
UK has better prospective demographics than Germany or Italy which are two worst case examples
Germany IS in fact the Keystone of the EU, but not voluntary, it is by Design. Many, if not all forget, Germany got reunited under the pretense that it is chained to the EU no matter what. There will be no such thing like Dexit. The moment Germany leaves the EU, the neighbors will make a Arms Race to protect them from Germany and one of them will sub-sequential attack. Everybody here forget the 4+1 Treaty of the German unification. Read it to understand the severity of this Document.
That Germany was able to turn this enslavement to their advantage tells me only how Powerful Germany still is and will be, if totally autonomous.
The Day Germany and Russia are in one full alliance, economically and military, Europe will have a great reckoning and any European Country fears that. Especially Britan, France and Poland.
Germany is in EEC because that was the French Condition for German Rearmament in 1956 when the US needed Turkey and France to agree to Germany joining NATO.
France got the EEC as a Francophone Club and Turkey got export of surplus manpower to German factories
The Whole EU and all it’s seperate Projects and subunits are all about to detain Germany. To prevent something like the WW II ever again.
Best thing that could happen to Germany would be to see the ass end of the American occupation forces. The Yanks should be forced out of Germany ASAP ! No peace until this happens.
It is a good description of the roots of Germany’s strength in Europe. But there are also strong roots for its crumbling: An incompetent elite which – with some few exceptions – is destroying the social, economic and educational fabric being the main factor of this success (beside the reckless exploitation of Eastern and Southern Europe by the banks and the big industry players – Siemens must be understood as a world scale bank with some technical hobby shops, organized like a Prussian ministry department, but a very strong policy-maker production promoting some of their corporate lawyers for implantation in politics, being much more effective for marketing than crude direct corruption).
The flirt with Russia and China is real, but disguised as much as possible. Read Rapallo April 16, 1922.
This and Germany’s still dominant position, and the potential of the EU as competitor for the Empire are the real reasons behind this ongoing full scale attack on Europe and Germany which escalated since 1990. The main weapon of this war against an EU dominated by Germany is controlling the political system by promoting Quislings for their career in all established political parties. The Green are a perfect example – from Petra Kelly to rabid anti-Russian militarism, gene manipulation promoters and apologists for an authoritarian totalitarism in the tradition of the SS which built a large scale biogas plant at Auschwitz and planned for Central European metropoles being taken down and rebuilt for ethnic Germans only with a size of 10% of the inhabitants at that time.
This is the same combination of Wilhelm II innovation and social policy with the “Conservative Revolution” of the Thule Society assembling reactionary intellectuals and industry magnates which gave rise to the German Nazis (btw, well supported by the Bush family, the British services and the Pope, read Guido Giacomo Preparata).
I travelled in western Germany quite a lot during 1980’s. One thing I reckoned soon: very many ordinary Germans really hated and despised Americans.
I think it is important to mention the GDR economy and the effects of German re-unification. Similiar processes happening in regard to southern and southeastern Europe happened in East Germany long before and could have been a warning about the effects of the EU and a common currency.
There were a lot of economic ties between Germany and Russia already (or between GDR and USSR) which were lost during the 1990ies. Anyway, Uncle Sam made sure that anything positive in the collective minds of (Eastern) Germans about Russia has to be erased. USA also threatened to destroy Sassnitz harbour in case it helps with Nord Stream II. That’s what friends are for ;)
Much could be said, I’ll leave it to some remarks.
I want to invite readers to take notice of the post of @theofilus (https://thesaker.is/wither-germany/#comment-966577 ) and the ominous chart of the Target-2 developments. That is the real timebomb under the EU.
Also I want to invite readers to take notice of the post of @Olivier (https://thesaker.is/wither-germany/#comment-966566 ). The state of Germany is described there quite correctly. Let me add some details. 1 out of 3 German women remains childless. Immigrants, mainly young men, are for 50-70% illiterate. They might stay on welfare their whole life, quite useless in a highly technical society. Pressure on pensions is still a no-go in the official narrative, but everybody knows the phenomenon of ‘Altersarmut’, poverty among pensioners.
True, that Germany is among the main trading partners of Russia and China. Technological ‘superiority’ may be declining the coming decade, so I don’t expect too much spectacular risings here.
The role of the EU is important. Already in the nineties a remark was made, that cannot be repeated enough. Mikhail Gorbachev famously stated: “The most puzzling development in modern politics is the apparent determination of western European leaders to re-create the Soviet Union in western Europe.”
One could think, that the EU is concerned about ‘welfare’ of its citizens. Nothing could be further from the truth. With above mentioned citate of Gorbachev in mind, the EU is interested in power only. They want obedient and poor people, that they can ‘control’. The destruction of nation based structures is high on the agenda.
(Compare that to the old joke about socialists, that they care so much about poverty and helplessness of people, that they want to spread that to everybody.)
Back to Germany. Elections are coming, and everybody is so busy with backstabbing. Beware of Annalena Baerbock of die Grünen (Green party), she had years training of the CFR, that also spitted out fine people like Barroso, Blair and Sarkozy, to name a few. She’s not real, just a figurehead. Like more often, she will be hanging on Sorosoid strings, scripted by a consortium in the background. Behind the nice words it will boil down to Davos ideals: we will be taxed to death and punished for any abberation of the supposed Moral High Ground. ‘You will be poor and ordered to be happy’. Formation talks will take long, but eventually we’ll be screwed.
Years ago I made a joke, that the former BRD may be in the thought that they took over the former DDR, but in reality it is the other way around.
In the DDR actually they had elections, scripted of course. But hey, don’t they do that here too? Some 30% of polled Germans think that the elections are rigged.
I think Germany will crumble, and the EU will eventually implode. That won’t be pretty.
German newspapers regularly release polls showing high approvals of Merkel and the Green Party among the people of Germany. But Erich Honecker and his wife Margot were very popular too in Eastern Germany. Of course that was only until 1990, when approval suddendly dropped by a 100 percent ;)
Much more could be said indeed. It could be added that Germany’s armed forces have never ever in their 150 years of existence been in such a ridiculously weak and disorganized shape like today.
150 years indeed, Germany having been proclaimed in January of 1871, an event gone by largely unnoticed. Which country would not celebrate its 150 years of existence? Well, if all of your many centuries of history is reduced to a 12 year-period from 1933-1945, then of course there is no room for this.
It could be added that the German government is willingly destroying its car industry, the heart of the economy. Especially the highly advanced Turbo-Diesel engines are being taken out. The german manufacturers were far ahead in this field and now they are begging the government for subsidies to advance the transition to electrical vehicles.
Thinking about it, how crazy is it to try to switch to an all EV-fleet with at the same time having the highest electricity prices in the world and to even sabotage your electricity generation? Only a criminally incompetent political class could come up with such a contradictory and idiotic plan. A plan that is obviously going to fail.
It could be said that 100.000 Germans are emigrating every year and never coming back, many of them well-educated professionals that are fed up of having to pay the highest taxes in the world to finance a government comprised of party apparatchiks that don’t have a single day of honest work to show up. They are being replaced with 200.000-400.000 third-worlders per year, nobody knows the real number, with the vast majority of these people being without any useful skills or even the will and capacity to acquire some of the competences needed in a high-tech economy like Germany.
How long can you continue to bleed your best and to ‘refill’ with people that not only contribute nothing but add a high cost to society?
All of this has been going on for a very long time, even before Merkel. But after her disastrous 16 year rule, the point of no return has already been passed, it is now just a question of time until Germany will crumble. And this Potemkin village might continue for some time but when it finally crumbles, it won’t be pretty, neither for Germany nor for the rest of the EU. Many brainwashed and naive people will finally wake up and find themselves in a world that they do not understand and for which they are even less prepared to live in.
Largest group of EU doctors in British NHS is GERMAN. German hospitals stripped Romania and Bulgaria of doctors as German doctors headed to Switzerland.
Try finding English-speaking German doctors in Germany………
They hate the bureaucracy and the crappy payments
See picture here!!!!
I should think the American bug-out from Afghanistan, done without any notice to or consultation with its NATO allies, will have a long-term, negative effect on German-American relations. Trump’s harangues about increasing European defense spending fell on deaf ears, but Biden’s actual betrayal of America’s allies will force them to reconsider the oft-discussed joint European military force, and to actually increase defense spending.
At whom will the European guns point?
Some Cafes ago I have put some three posts about the current German condition. Above I tried to keep it in general.
But when we are raising questions about military force and guns, let me add something.
What guns? There is a German ship sailing around in the neighborhood of China to please the Amis, because they are so eager to ‘send a message’.
Reality check: we may be pleased that the German Navy has a ship operational anyway.
Besides that, technology really has developed since the times of McKinder. Nowadays for ‘sending messages’ there is the availability of telephones, even smartphones, mail servers, and all kinds of internet-based platforms.
We even have ‘planes’ now to make it able to meet each other in person rather quickly.
I foresee that the use of our military eventually will be similar to the situation in France, where still about half of the military is used in France itself. Afaik the state of emergency after attacks in Nice and Paris has never been erased.
(Hint for German authorities: the French police (le gendarme) is accounted to the Defense ministry. Therefore they meet the goal of 2% of the GDP.)
Okay then. I want to add one example of the present German condition. *Just one*. Forget ‘industrial excellence’ and stuff, meet the present ‘New Normal’:
Die Grünen (Green party) have launched a tax hike for users of cargo bikes.
They know exactly how much money should be erased, but are twisting themselves in all kinds of directions to get this ridiculousness motivated. Bottom line: they need more money for their ‘projects’ and you, evil peon, should pay.
At first I thought I was reading some kind of Monty Python script. Maybe it’s more like in the novel ‘Atlas shrugged’, wherein a government official declares something like that they raise so many laws and regulations that they can screw you anytime they want. Just to make it ‘better’ for themselves.
There is a long road ahead.
Cargo bikes have a huge advantage: They are not so heavy so that you don’t have to repair the many thousands of crumbling bridges. The German Greens are planning ahead, quite clever…
If the bikes are so great, what is the need to subsidize them?
Most people in Berlin buy a bike anyhow.
“Cargo bikes have a huge advantage”
Next step: cargo Sherpas. Do not need pavement, and can swim too.
I think here in EU loyalty to US will be reinforced, because the message we are getting from media is ‘Without USA there is nothing but barbarism death and suffering, so to stay alive you must be with USA an NATO’
“Wither Germany” is not the same as “Whither Germany ?”
Perhaps the author could define his premise more succinctly ?
This article is so cliche-ridden and false.
“These various states pooled the coal and steel resources of six European countries: France, Germany, Italy, Belgium, the Netherlands, and Luxembourg which became known by the acronym – BENELUX.”
You are writing about the Schumann Plan which was FRENCH. It was a way for France to control Germany, it gained force due to the Korean War which revived steel production in Europe as UK had major rearmament drive to fight in Korea.
Germany is no longer a powerhouse economy. It has negative NET Fixed Capital Formation. German companies invest OUTSIDE Germany in Russia, China, UK and Eastern Europe. German technical education is poor compared to Asia. German schools are failing. Chinese exchange students laugh at German Physics lessons.
Even in the GDR STEM Education was superior to modern Germany. No German Medical Schools are in Top 10 in Europe. German Universities are laggards and German engineering is nothing special. Chinese CATL is building a facility in Erfurt but will not install latest equipment as Germans are simply not capable of handling it.
Whatever myths you have from a sepia-toned image of WEST Germany forget it – Germany is failing. The main arterial A66 in Hessen is blocked at Wiesbaden – the city cut off from rail and road – the autobahn bridges are suffering Concrete Cancer (Betonkrebs) and collapsing. 40.000 bridges are failing in Germany/
Merkel has been the “Brezhnev Era” of stultification and economic decline.
Germany is an irrelevance. Russia needs China not Germany. Russia is probably more digitally advanced than Germany with a far bigger reservoir of engineers
The problem of Germany is a combination of fear of the “east” and russophobia, reinforced through the media with lies and plain brainwashing.
The Navalny affair was purely created for German domestic purposes, to push their idiotic enviromental “green” future.
This article is naff.
If UK nuclear deterrent is “phallic symbol” of declining power so is US deterrent.
UK SSBNs take their missiles from a common pool in King’s Bay, GA and are the same missiles as used in US SSBNs.
British and US interoperability is multi-platform whether combat units or aircraft carriers.
Germany has the largest Low-Wage Sector in Europe. It undervalued its exchange rate at DM1,95 to €1,00 in 1999 to pursue mercantilist trade surpluses and impoverish Southern Europe which required Bank Credit Transfers. – Germany has TARGET2 Balances of > €1 Trillion – which is a giant IOU for Germany financing its own exports.
Double-Entry Bookkeeping requires a balance so TARGET2 at BUBA is the corollary of trade surpluses.
NO VW plant matches Skoda productivity levels.
For VW to match Toyota productivity would require 60.000 layoffs.
Germany is grossly uncompetitive. It is failing. There is a huge bankruptcy wave being hindered by Covid Subsidy. Germany spends 1.3% GDP or €48 billion on subsidies to business.
This article is so out of date as to be laughable
The median wealth of the Germans is paltry even compared to Italy and Greece. ‘You will own nothing and you will be happy’ has been the slogan of the Germans for decades already, nothing new there.
And to think that I have met again and again Germans that tell me how well off that their country is and how much of a responsibility that they have to help the ‘refugees’.
Many Germans are so out of touch with reality, it is stunning.
Regarding such wealth calculations it is important to note that they may ignore public pension systems.
Credit Suisse Research Institute, Global wealth report 2021
“Private pension fund assets are included, but not entitlements to state pensions.”
Much of the “savings” of many ordinary Germans are entitlements to the German public pension system („Deutsche Rentenversicherung“, https://www.deutsche-rentenversicherung.de).
That said, the Schröder government with the „Agenda 2010“ and subsequent governments have lowered such public pension entitlements significantly and have pushed many Germans into pretty bad private pension contracts („Riester-Rente“) and poverty at old age („Altersarmut“).
German pension systems are paltry compared to Italy or France or Greece but Civil Servant pensions in Germany are very generous and non-contributory with private health insurance
Germans own less property
Germany has very high taxes and costs with forms galore to claim anything
”The median wealth of the Germans is paltry even compared to Italy and Greece.” Come again!
Population GDP GDP – per head – purchasing power parity
81.3 million US$ 3,948bn US$53,075
60.6 million US$2,084bn US$41.430
10.5 million US$218Bn US$29,592
Source: The Pocket World in Figures 2021. 30th Anniversary
Could you explain that more? Don’t most EU nations (as does Germany) utilize the Euro. How can Germany manipulate the exchange rate when nations are buying and selling in the same currency?
Are you referring only to nations that kept their own currencies – such as Hungary or is there a way to manipulate prices with countries like Italy (say charging more or less to Italians than to other nations to achieve the same result?
German universities used to be named after people like Humboldt, Lessing, Herder, Heine etc. Now there are horrid institutions like the Hertie School of Governance (Hertie is a department store) sprouting everywhere and the billionaire founders of SAP have whole university departments named after them. University graduates are also no longer what they used to be. Most seem to be single-mindedly focused on academic titles and lucrative careers. What a difference to the bright, erudite and articulate generation that took to the streets in 1967-1968. Does anyone remember Rudi Dutschke?
P.S.: I posted this 9 years ago on cif, but I think it fits in here quite well.
It’s always amusing to read contributions from those who think that the facts are other than what they ought to be. The fact of the matter is that Germany is, and will continue to be, the most powerful economy in Europe. Germany’s per capita GDP stands at 53%, France at 48% the UK at 42% and Italy at 34%. That is the big 4, all of which are in decline. That is a brute fact. France, the UK and Italy have all crossed the threshold of Debt to GDP which now exceed the dreaded 100% mark. There are a number of smaller states which have slightly higher per capita income figures, these include Norway (which is not in the EU) at 65%, Holland at 56% and Austria at 55%. Bear in mind also that Germany needed to integrate the old DDR into the structures of the then Western Germany which was a costly operation.
The German manufacturing sector is highly productive, bank funded, export orientated, and has maintained relatively strong union representation in the wage formation process compared to the rest of the private sector, which has modest productivity and relatively weak unions. Wage co-ordinations tends to be stronger in German manufacturing than in other EU countries. These distinctive aspects of the German economy, including its wage bargaining structures, have proven to be crucial to the export-based ascendancy of Germany since the late 1990s.
These facts notwithstanding the sceptics remain unconvinced. Germany is in steep decline, has an ageing population (who doesn’t), is facing an internal political and economic crisis – and so on and so forth. Hmmm, but the contrast between Germany and the rest of the EU is striking. Of the big 4 Germany is the exception. France, the UK and Italy are going nowhere other than backwards; if you are looking for failure this is where you’ll find it.
That’s the situation as I see it.
Great comment. There is indeed far too much non-analysis of the Germany situation in this blog’s comment section, primarily due to a poorly-perceived “Russo-German” rivalry.
Whether Germany is in the midst of a decline or not, it is indisputably Europe’s #1 economy and nothing else comes close. Geopolitics and geoeconomics are purely relative matters. Talking about one nation’s faults in a vacuum is meaningless.
I would like to see more critical analysis of the Germany situation in this blog, and in particular the (geo)political situation with respect to elections, EU, NATO; this article is a good step in that direction.
Strategy of the US and the UK for almost a century is to avoid a cooperation of Germany with Russia.
The article touches several points without any concise logic and lack several important points which shows that it was written either with intend to obstruct the difficult story or with a lack of knowledge.
Is Francis Lee a native English speaker? He confuses “wither” (intransitive verb) with “whither” (where to).
As, particularly, Olivier has pointed out, the economic strengths of the BRD did not carry over into the united country. The cruel shambles of “reunification” has left many parts of the former DDR depopulated, with the sickening cant of “Treuhand” transferring DDR industriies to the west for pfennig on the DM. At the same time, bullshit and its associated criminality flourish.
Karel Čapek, in his wonderful “War with Newts” of 1938 (in which 2-metre long newts adopt the properties of their human handlers) has young Nord-Molch, who are slightly lighter-coloured than their fellows, marching along singing “solche Erfolge erreichen nur deutsche Molche” (such successes are achieved only by German newts), which always comes to my mind when monumental cock-ups like the everlasting Berlin airport construction or the Ahr valley flooding (which Laschet found so amusing) are revealed.
I think the root cause of so many German catastrophes is that Germany has always had far too many academic philosophers, because they came cheap. Princelings of eighteenth-century statelets in the Holy Roman Empire could not afford to support, say, plant collections and gardens tike Oxford or Uppsala, or artists and classicists who wanted to go to Italy, so they kept philosophers,who even might not need a salary. A way of showing productivity is to academicise the everyday, in the manner of Thomas Carlyle’s Diogenes Teufelsdrock, Professor of Allerley Wissenschaft, (in Sartor Resartus, published in 1833). In a big state, philosophers might achieve international renown, but for every Hegel or Kant there would be a score of Teufeldrocks in small states. By the end of the nineteenth century mystical emoting in the manner of Nietzsche or Chamberlain became the norm, leading up to the First World War – in the 1960’s Fritz Fischer memorably showed from state documents that Kaiser Wilhelm’s Weltanchauung was much the same as Hitler’s.
Mystification of biology in today’s Germany is expanding, and is obviously costing billions through ineffective and even counterproductive menvironmental initiatives . The same thing is happening in medicine, where the yuppie University in Würzburg had departments of “Biomedizin” and “Humanistisch Medizin”, whatever they are. Given that homeopathy is taught as a legitimate form of medicine, one fears the worst.
It always makes me laugh when my interlocutors find one mistake in an article of 2500 words or more. Maybe I left out a comma somewhere as well?! You never know. Most contributors on these sites do not have paid, professional proof-readers to comb these articles for errors. So there you are. BTW you strike as a man of great erudition. But one thing caught my eye. You make reference to Chamberlain, but you do not mention which Chamberlain. Nevile Chamberlain, 1869-1940, Joseph Chamberlain 1836-1914. Two important figures in British politics don’t you think. (Are you a native of British politics.?)
Homophone confusion in a two-word title surely detracts from everything else?
I’m gobsmacked that you write about Germany, yet have not heard of Houston Stewart Chamberlain. He replaced Nietzsche as Kaiser Wilhelm II’s philosophical crony after Nietzsche’s death. He attracted fame and fortune with the two volume “Die Grundlagen des neunzehnten Jahrhunderts”, a broad-brush “philosophical” account of how civilisation had been created by the Aryan races whilst the Semites had tried to destroy it (he rooted for the Romans against the Semitic Carthaginians!). He went to an English public school, and did his first degree (in botany!) at the University of Geneva (though he failed his doctorate after he invoked mystical vital forces to explain fluid transport in plants). Infatuation with Wagner led him to then idolise Imperial Germany and marry Wagner’s daughter. The only English translation of his work is an unauthorised 1915 collection of the worst bits entitled “The Rantings of a Renegade”. He met and encouraged Hitler, but died in 1927.
Yes, of course I have heard of Houston Steward Chambelain, all very well but you forgot about the other two19th century British Chamberlains didn’t you, tut, tut. Must not miss up our Chamberlains must we. Didn’t put in the forenames ‘Houston Stewart’ – unforgivable! You see we can all play these silly little games of pseudo-academic nit-picking. I’m gobsmacked that you’ve never heard of them both Neville Chamberlain who was the British PM largely responsible for the Munich debacle whereas Joseph Chamberlain was Secretary of State for the Colonies of whom a certain personage Mr V.I.Lenin writing of British imperialism:
”At the end of the 19th century the British heroes of the hour were Cecil Rhodes and Joseph Chamberlain who openly advocated imperialism and applied the imperialist policy in the most cynical manner.”
Ah well none of us is perfect, after all there was that comma I neglected to put in in paragraph 5 line 3
Germany would probably be better of in building up its enclaves of expat people and industries in various 3rd countries like Argentina, Canada, Australia, South Africa, Cameroon, Tanzania etc… as part of defacto expansion.
Whether the EU is worth saving given the mess its in now is the question.
The whole idea of one European State was doomed to fail due to unmoveable nationalism all over the place.
European bi-lateral arrangements would have been better – aka Germany-France, France-Italy etc… You cannot in Europe do what was done in America and have melting pot of peoples. Too many tribes and with different ideas and views of things. The Romans even couldnt pull it off and notably could never tame the peoples to the north in Germany & the Baltic. The EEC was the limit of what was possible.
What would make the most sense is Germany-Holland alliance.
As would perhaps a Italy-Spain-Greece block.
Its overall a difficult and complex situation and question.