The European Central Bank, as widely expected, raised interest rates by 75 basis points. But “restricting the monetary lever without coordinating this action with a strategy that directs public spending towards economic recovery, is the photograph of the dream of neoliberal ideology that crashes into reality”, he tells us. Edoardo Laudisi, writer and translatorfor years in Germany, author in 2020 of Germany black year. If we add to this the sanctions and a foreign policy decided at the table by the United States, we understand well the fear, combined with a sense of helplessness, that reigns in Berlin.
A situation, the German one, which also concerns Italy. What unites the two countries, in fact, is the total political dependence on decisions taken elsewhere and a price to pay in economic and social terms that can no longer be hidden.
Yesterday the ECB raised rates by 75 basis points. An anti-inflationary squeeze on the economy that will have the effect of aggravating the recession, at least in Italy. Even in Germany?
Certainly. Responding to cost inflation, not of labor but of raw materials, by raising interest rates, is useless at best. Restrict monetary leverage without coordinating this action with a precise political economy strategy, which directs public spending towards economic recovery, is the photograph of the dream of neoliberal ideology crashing into reality. Indeed now we talk about stagflationa terrible word from the 1970s that defines a scenario of economic stagnation with recessive tendencies in the presence of inflation.
Today there will be the European summit, but the decision on the price cap sled to October. What is the situation of German companies in the face of the stop decided by the Kremlin?
Since Gazprom announced the closure of the Nord Stream 1 gas pipeline, the gas market in Europe has experienced tremendous price fluctuations with spreads of over 40%. This morning (yesterday, ed) in the Bundestag the Minister of Economy Robert Habeck, heavily attacked by the opposition for the inconsistency of his policy (Herr Habeck, what did he go to do in Qatar apart from bowing to the Sheikh ?, thundered from the opposition benches ), assured that German companies will receive all kinds of state aid until energy prices are normal again. However, the situation of German companies remains in the balance.
Because on the one hand export markets are collapsing, on the other, measures to contain energy costs may not be enough.
What aids are we talking about?
In part they are already in force as theEnergiekostendämpfungsprogramm (EKDP), the energy cost containment program that guarantees subsidies to companies whose impact of energy costs exceeds a certain threshold. The program will also be extended to small and medium-sized enterprises. A measure that we dream of in Italy. While in October the gas versus cash program will start, which will compensate companies that will voluntarily reduce energy consumption.
We have been writing for some time that Italians are unaware of the gravity of the upcoming crisis. And the Germans?
Surely they are much more aware of us who live in a non-responsible media bubble, but for this very reason they are terrified of what could come and therefore the tendency is to hide their heads in the sand. German history has already experienced a crisis that has features in common with this one, in 1923. Then an initial inflation which started at 7-8% flared up, reaching figures with six zeros in a few months, destroying the monetary system. The fact remained etched in German memory as a collective trauma. This time, however, it would be worse, because it would involve an entire continent.
What significance does the 65 billion euro maxi-plan to support families and businesses, the third of the Scholz era, have on the domestic and European level?
The maxi-plan could prove to be a boomerang for Scholz. Meanwhile, he has received a battery of criticism from the Länder who are wondering who should finance the project. Here they are doing the accounts of the servant: according to the plan, for example, Bavaria should put in 4 billion, Baden Württemberg 5, Berlin zero or almost. These are figures, apart from Berlin, that change the connotations of regional budgets and bind them for the years to come. The Länder would have preferred a ceiling on the price of gas instead of subsidies. The situation is tremendously complex and every decision in one direction has negative effects in the other that are difficult to quantify.
What would save the German economy right now?
Quite simply: reopen negotiations with Russia and review the sanctions policy.
But is there anyone in Germany who is calling for an end to sanctions?
Officially, no one has the courage to do so. They all care about their political careers. However, in July the former Chancellor Gerhard Schröder was in Russia to meet Putin. Of course the media mainstream and his party, the SPD, attacked him fiercely, but in the meantime he went to Moscow and certainly not only representing himself.
If since last May Habeck had spoken of an “energetic Lehman”, what – or who – prevented him from making consequent choices?
The only consequent and intelligent choice would have been not to apply sanctions or to use them as leverage to arrive at a negotiated solution to the conflict. Europe, not just Germany, should have used all its diplomatic, economic and cultural resources to make possible the opening of negotiations between Ukraine and Russia. Instead the line has been imposed by the USwho have other interests.
“I don’t care about the voters,” said Foreign Minister Annalena Baerbock. Yet 77% of German voters want to start negotiations to end the war. What is happening to the government?
Annalena Baerbock he is probably one of the least intelligent politicians in German history. His gaffes are not due to inexperience, which there is, but to a lack of culture and a mediocre intellectual level, barely masked by a dull ideological cortex. That said, it should be noted that every time Germany has acted based on ideological theses they were pains for everyone. When, on the other hand, German politics starts from the objective, pragmatic datum, it is capable of making important choices. Unfortunately today the first option seems to prevail.
Do you foresee political shocks? How will they be absorbed?
There is currently no alternative to this government, the government knows this and therefore goes on. It will be reality to upset the picture. The question is: when companies stop production due to unsustainable energy costs and start sending people home, and unemployed people will no longer be able to pay their bills, and supermarkets will no longer be able to renew their stocks, what will happen? At that point, throwing 65 billion into yet another maxi-plan may not be enough, also because the euro may no longer be worth anything.
In your opinion, does the crisis in Germany also pose the problem of the Union’s resilience in a new way?
Absolutely yes. Germany is torn apart. On the one hand, he understands well that the choice to go against Russia is suicidal, there is awareness of this. On the other hand, there is neither the strength nor the courage to oppose the choices imposed by the US and global elites, those that meet at the World Economic Forum in Davos so to speak. This stalemate consumes the country with a higher tension than that which went through it when it was separated by the Wall. The fate of the European Union is inextricably linked to this process.
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GERMANY CRISIS / “Prisoner of suicidal choices, but the EU also sinks with Berlin”
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