Overcoming the German autocracy
German households and businesses are clearly creditors and in surplus with regards to countries abroad. As for the German government, its objective is to clear its public debt and run a budget surplus. So why would it now trouble itself with the endemic deceleration of the country’s domestic investment, which has been induced directly by German individuals who are transforming into net lenders, by companies that are literally drowning under the weight of their own treasury and by a State that is basking in nonsensical frugality? This is why the surplus of German payments – which now amounts to 8% of national GDP – is growing steadily, equivalating to 8% of Germany’s GDP being invested abroad.
But don’t get me wrong. This calamity of German actors at all levels – private and public – saving rather than investing or spending is in no way the fruit of ingenuity, productivity or Germany exemplarity. If all the nation’s business sectors and all social strata are now net creditors, it is because the German people are literally obsessed with austerity and saving. Furthermore, their economy has now become so dominant that this obsession is inducing perverse effects, not only on the European scale but globally too!
It is in fact mainly to Germany that we owe the global deflationist spiral since this sickly saving and surplus that is to the detriment of investment and consumption is exerting intense downward pressure on European interest rates. The battle that the ECB is desperately leading is therefore already lost, and its rates are condemned to stay at zero – or even to dip below – so long as Germany continues to bask in its fundamentally deflationist position as an exporting machine. It is therefore these German structural problems, like their politicians’ obstinate refusal to reach a balanced budget, which are weighing down on the ECB’s monetary policy. May Mr Schauble – who deplores European negative interest rates – thus blame only himself and his entire country’s policy that has been stretched to the max in order to record surpluses, and which has been to the contempt of the unemployed, pensioners and the floods of unsecure German workers.
In reality, the current deflation is being worsened by the Germans’ attitude which now consists of further reducing their spending – in a climate of zero interest rates –, since this comes back overall to swell their savings. This accumulation of wealth and surpluses – the sole priority of the German people at all levels – also leads to further austerity and deprivations for other European nations since exportation has now become their only way of reaching a semblance of growth. Incapable of relaunching exportations through a devaluation of their national currency, and constrained to forcing their wages down even further in order to maintain a decent level of competition against the German ogre, other European nations must therefore – yet still – significantly reduce their standard of living. Germany is therefore driving the world towards deflation. Its commercial partners – European and further afield – must therefore keep up with the country, just to keep their heads above water.
With such a German diktat, how can we not be outraged by Schauble who has recently attacked Mario Draghi regarding the rise of the German Eurosceptic party Alternative for Germany, essentially saying from the height of his legendary arrogance “you should be very proud because 50% of this party’s vote is due to your monetary policy”? This Europe and the whole world beyond can no longer – and must no longer – put up with this German blindness and domination which is 100% responsible for the collapse of the continent’s fundamentals and for global deflation. It is by this measure that the German welcoming of Syrian refugees must be understood, because the country is looking to exert extra pressure on its own wage levels by employing even less well-paid workers than its current lowest paid workers, in order to stack up even more surplus. In doing so, Germany is preparing itself for a sombre future in which racism will find an ideal hotbed since unemployed Germans (or those who will refuse to work in such conditions) will stigmatise the “job-stealing foreigners”.
So let us not be led into this German delusion. May Germany therefore leave our European Union, and with them the mercenary Great Britain, and may they finally allow us to create a Europe built on humanist values.