Europe is sick with Germany
My intention here is not to fall into caricaturisation or outrage, but Germany is now being governed a bit like Ceausescu’s Romania. Just before being overthrown, he managed to run up a surplus in the way of 9 billion dollars on his country’s balance of payments, just like how Olaf Scholz, the new German Minister of Finance, sees things for his country.
Reducing public investment, massive cuts to military spending, freezing foreign aid and cutting back on Germany’s contribution to the European budget are the measures championed by Olaf Scholz, who will oversee Germany’s budget rise to a 1% surplus relative to GDP, and whose ambition is to eradicate all of Germany’s public debt. This obsessive quest for ordoliberal utopia in Germany never ceases to amaze us since, in fact, from atop his mission for budget surpluses, Scholz is going even further and trying to do even better than his rigid, narrow-minded predecessor, Wolfgang Schäuble. Let’s not forget, in this respect, that the party of the new German Minister of Finance – the SPD – was fervently in favour of the sinister austerity measures of Chancellor Brüning at the start of the 1930s.
The solution to Germany’s deficient infrastructure, and the remedies for establishing, for example, their military air force that has – admitted even by Der Spiegel – become dysfunctional due to chronic underinvestment, would simply be to maintain a budget deficit of 2% of GDP, and to reduce the superhuman surplus of their balance of payments which has been at 8% for several years. Such a small effort would however be such as to greatly improve Europe’s situation, whereas the extremism of their economic policies will have perverse effects that will largely go beyond the German voters who have put this Government in control.
But never you mind, because the Germans are proving to be radically indifferent to the exacerbation of Europe’s imbalances, just like they are showing themselves to be totally insensitive to the vital need for budget flexibility for a nation such as Italy, lost at sea and desperately in need of public investment. Germany’s new budget is therefore also proving to be just as anti-European as Greece’s massive deficits were.
By eliminating their own public debt, are the Germans trying indirectly to scupper any attempt to mutualise debt across the Union?
Once – at the end of the 1990s – the “sick patient” of Europe, might Germany have forced countries like Italy to adopt the euro in order to flood them with its own exports, even if it meant butchering the other countries’ economies along the way?
The German quest for the Holy Grail – that can be summarised simply by the running up of accounting surpluses – is on the brink of making the whole European Union incurably ill. I wonder how Carl Jung would analyse this German surplus-fetishism today, he who declared in 1938 that “Hitler reflects the subconscious mind of all 78 million Germans”.