By Mathew D. Rose, a freelance journalist in Berlin
Germany will have clocked up a number of dubious concomitant successes this year. But these products of German hubris look like pyrrhic victories.
What has appeared beneficial for Germany, as the most powerful member of the European Union, could well have serious repercussions not only for itself, but for the rest of Europe in the coming year.
Recently Germany trumpeted its economic growth of 0.1 percent in the third quarter, enabling the nation to escape a return to recession. In year seven of the Great Recession such anemic growth can be designated as many things, but surely not as a success. In the foreign media this sort of growth, or lack of it, is labelled “stagnation”. The talking heads in Germany meticulously side step this lacklustre result, giving it the euphemistic epithet “stability,” for Germans a positive term like discipline and order.
Germany’s current fiscal policy is not pulling Europe out of its economic malaise, but intensifying it. Yet the German media has said nary a critical word about the government’s fiscal programme. If you wish to impress family and friends with a magic trick over the holidays, simply purchase a German newspaper, open to the financial section, and – voila! – economic reality disappears.
“Solid,” “reliable,” and “stabile” were the adjectives recently used by Germany’s Finance Minister, Wolfgang Schäuble, to describe the nation’s budget for 2015, which for the first time in 45 years does not, at least as planned, entail a deficit. That there might be a correlation between the lack of a deficit and the lack of investment and growth has of course not been seriously raised in German media. Marcel Fratscher, President of the much respected and much ignored German Institute for Economic Research (DIW Berlin) summed up the economic situation for the past 20 years: “German growth has been very weak, its productivity growth marginal, and its wage development also very disappointing…Germany has one of the lowest rates of investment in the world. Relative to economic output, in the last 20 years, investment in Germany has plummeted.” Germany has been able to export these negative tendencies, producing a sustained prodigious trade surplus at the cost of others. The looming question is how long this beggaring thy neighbor policy is sustainable, as other nations with increasing current account deficits will eventually be forced to reduce their imports from Germany.
A case in point is Russia. The decrease in exports to Russia, due to the weak ruble and reciprocal economic sanctions has had a dramatic effect upon Germany’s manufacturers and agriculture. German businesses, fearing substantial losses, were vociferous in their opposition to their government’s aggressive policy towards Russia, but the political advantage outweighed such arguments.
One has to understand that the basis of German politics since the Second World War until unification was the Cold War. In West and East, the black and white delineation between the capitalist and communist systems dominated the political programme and discourse. There is nothing like hate and fear to unify a society.
Germany’s political class has sorely missed this polarization in the past quarter century. With external threats absent, many voters had occasion to look more critically at what their parties had on offer: For the common citizen, not much. Voter participation decreased dramatically. One of the principal West-German political parties of the Cold War, the Liberals, is moribund. For political parties, with the exception of the leftist party “Die Linke,” the opportunity to reanimate this polarization once so conducive to their fortunes through the conflict in Ukraine appeared well worth the negative economic consequences. As in the Cold War, a rational public discussion concerning German policy in Ukraine is neither desired nor possible. Critics of the government’s policy are ostracized as “Putin Empathizers”.
Support for the government by the German media has been impeccable, their reporting tending to have more in common with Goebbels than a modern democracy. Probably the apogee of this bias occurred as German state television, trying to mobilize anti-Russian sentiment, made the egregious error of showing “freedom fighters” of the Ukrainian government displaying Nazi symbols on their helmets and uniforms (http://www.zdf.de/ZDFmediathek#/beitrag/video/2234384/ZDF-heute-Sendung-vom-08-September-2014, 02:17 – 02:28), apparently assuming the sight of SS flashes and swastikas would stir German hearts and create a sense of solidarity with the newest set of corrupt oligarchs running the Ukrainian government and bring the two nations closer in their common struggle against the Beasts in the East. Much to the credit of Germans, many found this was going far beyond the exigencies of war propaganda.
The conflict in Ukraine has caused further internal problems. Perverting Theodore Roosevelt’s foreign policy motto, Chancellor Merkel has been pursuing a course of speaking loudly and carrying a small stick. Despite her hardline and belligerent rhetoric toward Russia, it has been discovered that much of the German military hardware is dysfunctional due to austerity and endemic corruption, politely referred to as “incompetence” in German media. European nations have been radically reducing their defense budgets for years in an attempt to reduce their deficits, making them in the meantime completely dependent upon US military might, with the exception of maybe France and Britain, who can still manage to take on rebel groups in Africa.
The most worrying success of Germany’s political establishment is a recrudescence of xenophobia. When things start to go seriously wrong politically in Germany – and they are going very wrong in the Grand Coalition – German political parties have traditionally channeled discontent into racial hatred.
Xenophobia is an integral characteristic of a large portion of German society. It is an issue that is suppressed, but can boil over at any time. The anger and resentment towards their political class of many Germans, who have been socialized not to question authority, can be convenientlychanneled against minorities. In Germany in the past, if the political climate is favourable, a party that propagates xenophobia can mobilize up to 20 percent of the vote on short notice in state and regional elections. The political climate is currently favourable.
Catalyst for this current development is the recently founded political party Alternative for Germany, an anti-EU and anti-Euro party. In the Bundestag elections of 2013 Alternative for Germany just missed winning 5 percent of the popular vote needed to enter parliament. To win over voters they have since courted the far right and neo-Nazi groups, consequently achieving success in state elections.
In such a situation the established parties follow suit in an attempt to reclaim lost voters. This began months ago, as EU citizens from the East, mainly Romanians, were accused of moving to Germany to misuse the social security system to their advantage. Once again the mainstream media promulgated this story. Should such claims be true, I cannot imagine that it involved more families than the number of companies that have avoided paying taxes thanks to loopholes in Luxembourg. The damages to German taxpayers in the first case could be calculated in thousands of Euros. With regard to Luxembourg we are surely speaking of hundreds of millions of Euros or more. Germans however rarely question institutions of authority, be it government or business.
This campaign against Romanians was recently followed up by the Christian Social Union (CSU), the dominant political party in Bavaria and the sister party of Ms Merkel’s Christian Democrats, which proposed forcing foreigners to speak German at home. This may sound like something from Orwell’s 1984 or Germany’s former Nazi government, but was seriously discussed in Germany.
It is no wonder that in the past months demonstrations against foreigners and refugees in Germany have increased markedly. In Dresden there have been large protests against “Islamisation of the West”. Oddly, the city has very few foreigners. The closest thing to a mosque that Dresden can boast is a cigarette factory built in 1909 to look like a mosque. In Bavaria a refugee compound was in the meantime set ablaze by neo-Nazis.
There is however a latent danger when the established political parties in Germany foster xenophobia for their own ends: The situation gets out of control, or other parties like the Alternative for Germany become the beneficiaries of newly unleashed racial hatred. Both have occurred. To counter this development the established political parties are trying to explain to the public why their racial hatred is good and that of Alternative for Germany and the demonstrators is not.
What no one in Germany seems to be willing to confront is the fact that the nation has a serious problem: The Grand Coalition is failing the German populace and Ms Merkel is doing a very poor job as chancellor. It may be very satisfying exercising hegemony in Europe, not having a budget deficit, squaring up to Germany’s traditional enemy Russia and blaming foreigners for a government working against the own interests of its citizens, but it is a poor perspective for a nation that is supposed to be part of a peaceful and prosperous Europe.