Germany is — once again — the sick man of Europe

The German model is collapsing under the weight of its own internal contradictions

I’ve written for UnHerd about Germany’s astonishing fall from grace — from economic powerhouse and unquestioned European hegemon to economic basket case and geopolitical laughing stock:

What’s striking is that the German leadership has largely brought this crisis on itself. First, it leapt on the anti-Russian bandwagon and decoupled from its main source of energy; and then it compounded the crisis via two of the German establishment’s favourite obsessions, green policies and austerity. The proposal to scrap fuel subsidies is a perfect case in point. It emerged from a court ruling that the government’s attempt to bypass its own fiscal rules by turning €60 billion originally earmarked for Covid aid towards measures aimed at combating climate change was unconstitutional. The decision to cut the subsidies was thus presented by the government as the only way to meet both its fiscal and climate targets. The message was one that we’ve become accustomed to: “es gibt keine Alternative [There is no alternative]”.

But of course, both of those targets are self-imposed. They are the result of political decisions, not laws of nature — something ordinary Germans are more than aware of.

Overall, the German model appears to be collapsing under the weight of its own internal contradictions. But these have been building for a long time. Contrary to popular belief, Germany’s post-euro export success was not based on the greater productivity or efficiency of the German economy, but on a series of neoliberal “structural reforms” implemented in the early 2000s that enabled companies to engage in drastic wage compression.

Read the article here.

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Thomas Fazi

Website: thomasfazi.net

Twitter: @battleforeurope 

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Latest book: The Covid Consensus: The Global Assault on Democracy and the Poor—A Critique from the Left (co-authored with Toby Green)