Stephen Pound
Guest Reporter
By any objective standard, Germany achieved an economic miracle in the post-war period.
Rebuilding a shattered industry and absorbing the enormous economic hit of the reunification of East and West Germany was miraculous in itself, but to come to dominate industrial production and ally this to a stable democracy is worthy of sincere admiration.
So, where did it all go wrong?
Germany now has the lowest economic growth in Europe and its once-secure democracy is under huge threat.
We can look at the causes of German decline, but we also need to urgently examine what this means for us in this country.
The big three German car manufacturers are all closing plants and laying off workers. If President-Elect Trump does impose import tariffs of anything between ten and twenty per cent, then one of the biggest export markets faces catastrophic decline.
This is, of course also true for countries such as Japan but they have diversified while German industry is wedded to the twin pillars of cars and chemicals.
Anyone who has travelled recently to Germany will have noted that it has one of the worst mobile ‘phone networks in Europe and even tools such as Oyster cards which we take for granted seem light years behind other countries.
Astable democracy is a must for internal economic approval and Germany managed this from the days of Adenauer, Brant, and Schmidt up to the time of Angela Merkel. This political stability was based on a rather odd reality.
The two main parties – very roughly analogous to our Conservatives and Labour – always had to accommodate a Free Democrat Party (almost like our Liberals).
There were a few nostalgic Communists in the East and some rather ineffective Greens but what really put the fox into the henhouse was the rise of AfD – Alternative fur Deutschland.
This party was formed in 2013 on an explicitly anti-euro policy and has gradually moved from being derided as far-right neo-fascists to winning regional elections in Thuringia last September.
Sounds a little familiar.
The actual cause of the collapse of the German government was a disagreement between coalition partners of further financial assistance to Ukraine but the real fault lines run far deeper and have far more significance for the continent – and our place in it.
The dream of a united Europe wedded to comprehensive liberal standards of mutual support and respect for all could well descend into a nightmare of nations such as Hungary breaking away and collapsing the Union.
There are some people in these islands who might welcome such an outcome but the reality of a balkanisation of Europe with trade wars and border disputes flaring up all over the shop does not promise good news for the UK.
We have stupidly sold off our airports, shipbuilding capacity, the automobile industry, water, gas, and electricity to French, Spanish, Indian and German companies and rely on China and Japan for power generation and IT systems. We are now dangerously exposed in the event of a trade war, and you must ask yourself – what do we make in this country in British factories?
Germany is imploding and the manufacturing standards that we once enjoyed are now long lost in the past. Remember the expression “bog standard”? That stood for British or German Standard and was the mark of mechanical and industrial excellence.
No more, I fear.
Some may be ringing the bells at the prospect of a disintegrating Europe and German decline but tomorrow they’ll be wringing their hands because we do not have the economic resilience to cope with a tariff barrier around America and an aggressive set of disputing nations across the channel.
Recent elections in Moldova and Poland give some grounds for optimism but until we start to address the real concerns of those such as AfD and the reality that the European Union has gone too far beyond a trading bloc – and economic union – the future will be bleak.
Germany may be the canary in the coal mine, but it is not too late to reset our relations with Europe on a more mature basis and concentrate on restructuring to an increasingly irrelevant and irritating ultra-liberal agenda.
Find Out More...