Germany is drowning in its ordoliberalism

Germany is drowning in its ordoliberalism

December 31, 2019 0 By Michel Santi

Do the Germans, who in their overwhelming majority are staunchly opposed to what they call the “Haftungsunion”, also known as transfer union implying that their country pays too much money into Europe, live in a parallel universe? Might the Germans have become populist in that they don’t hesitate to dig up a specious, fallacious, facile argument in order to spread fear – including for themselves. This manipulation, this feeling that they are the creditors of Europe, this bitterness that has been knowingly maintained and which makes us jealous of their money, however, turns out to be just a fantasy. The European Stability Mechanism? The very one that supported – not just Greece – but also and above all the German and French banks, and that has, in truth, saved the German taxpayer. Indeed, don’t the very concept of a Union and the very essence of the European project consist precisely not of a sharing of the burden, of common risks, of a subscription of members to a sort of insurance policy that is meant to benefit the whole family? Europe’s philosophy of integration has alas been trampled over by the last few years, a bit like those affiliates of a health insurance company that refuse people access to care and their rights because they’ve had the terrible idea of getting ill. However, isn’t the very basis of insurance not that those in good health accept playing the game and paying for the others, and that those in suffering will get more for their money? From this point on, must we get rid of all insurance because it doesn’t benefit us, at the risk of finding ourselves without protection the day that illness grips us?

But actually, why pretend to be surprised about the attitude of a country that abandons even its own, with 20% of its citizens living below the poverty line? Over 20 years, the most modest incomes there have only declined along with business productivity. In the end, Germany now displays a spectacle ravaged by inequalities that are even worse than in the UK and US, with 40% of Germans having strictly no savings or wealth. As for their banks, they don’t want to and cannot support them because – it must be admitted – only the German banks have been involved in every fiasco: the subprime crisis, the Spanish real estate bubble, the Irish one, and – without wanting to invoke the never-ending woes of Deutsche Bank – we should acknowledge that they were particularly frivolous in the investment of their country’s savings. In Europe, Germany is therefore a special case, including for its fiscal inequity that consists of heavily taxing working incomes whilst also granting an unprecedented clemency to the wealthiest. It’s a system that has been constructed entirely to preserve the industrial dynasties that pay virtually no inheritance tax (1% after 10 million euros of inheritance) while those who inherit 400,000 euros are taxed at 10%… The deepening of inequalities is therefore a mechanism that has been well adopted in this country that heavily penalises work.

The same goes for the golden rule that demands a balanced state budget, that spreads ravages on the local and federal level, and that explains why public investment and infrastructure investment are so destitute in a country as rich as Germany.The decision made a little over ten years ago by the federal government constraining states and municipalities to no longer have any debt therefore tramples on the whole vital pail of investment, including in education and health. When will this Germany, so proud of its surpluses, realise that reducing them for the benefit of its own citizens and infrastructure will first and foremost be profitable to itself.

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