Opinion: Germany — A Country Undone

The energy crisis is upsetting the balance of power in Europe and massively impacting Germany’s economic model, exposing it to a multitude of flaws.

Aug 08, 2022 | By Michel Santi
German Old Leaders
Image: Pixabay

The energy crisis is upsetting the balance of power in Europe, as we finally have realised that Germany is indeed quite fallible.

The country’s moral authority was constantly being unleashed upon Mario Draghi during his time as president of the ECB because of his active monetary policy. Germany’s arrogance went as far as proposing to sell the Acropolis to the Chinese in order to finance Greece (and therefore to its own banks that were intertwined with them), and also treated the “Club Med” countries of Spain and Italy with suspicion. The ordoliberalism of this nation where the same word means both debt and sin (“Schulde”) has now been reduced to ashes so much so that the “Made in Germany” label now seems to have been built on fallacious grounds. Germany’s prosperity was in fact built upon the backs of its low-cost workers and on Russian gas bought in abundance and at good rates.

The leaders of Germany have clumsily fallen into a geopolitical trap, the result of which having now turned out to be catastrophic for their country that imports more than 60% of the gas it consumes from Russia. The fact that Russia has completely cut off all supply is likely to cause a depression in Germany equivalent to the ones that followed the world wars! And now Germany’s economic model and its true parasitic nature are being challenged and seen for what they really are by those who once preferred to turn the other cheek, impressed by its massive trade surpluses that were in reality merely the inevitable consequence of a country dependent upon the consumption of another.

Gerhard Schröder, Klaus Schwab - World Economic Forum Annual Meeting Davos 1999
Image: World Economic Forum

I was at Davos in January 2005 when Gerhard Schröder, the then Chancellor of Germany, made a resounding statement on stage at the World Economic Forum, proudly announcing to have “built up one of the best low wage sectors in Europe”. The infamous Hartz reforms, also known as “Agenda 2010”, put in place in 2003 were to affect more than 40% of the German population who were reduced even to counting up their jewellery and family trinkets to determine how much in unemployment benefits they would be entitled to. The consequences of this frugality for Germany were above all harmful to itself as year after year it is coming in at around 30th place in the world rankings for quality of road, rail and even internet infrastructure! Have another read of German prosperity: a nightmare for 40% of its citizens – Michel Santi to understand more.

Today, and while its Minister for Finance keeps obsessively calling for a reduction of its deficits, Germany finds itself confronted with its interminable demons – that Marx was indeed right when he warned that, for the second time, history would repeat itself like a bad joke.

Frankfurt, Germany - The Euro Symbol, a sculpture by Ottmar H?rl, with the office towers of Frankfurt's central business district in the background.
Image: Pixabay

In the face of an abnormal inflation rate in the way of 10%, Germany will therefore – logically – not play the game of increasing its workers’ wages. This iron first with which its leaders rule over their citizens’ incomes has been going on for some twenty years now, is unique in the annals of Europe, and has transformed the country’s labour market into an ocean of low-skilled, underpaid workers worthy of the most neoliberal of economies in the world, where the market has the first and final say.

The once proud Germany has fallen from grace. Only a few days ago it persuaded the European Commission to urge the 27 member-states to reduce their energy consumption by 15% this coming winter, and was met with a scathing dismissal by the once stigmatised Spanish “cicada”. Teresa Ribera, Minister of Ecological Transition, retorted that her country had done its homework and met its objectives in this regard, and that Spain (“and not Germany” being the underlying message) “was living within its means”.

The end of an era.

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