The technocratic class tends to hero-worship the German state for its efficiency, pragmatism, post-war modesty and liberalism. Former Chancellor Angela Merkel is remembered as their standard-bearer: strong, rational, in possession of the stern dignity every leader should aspire to. John Kampfner’s 2021 book How the Germans Do it Better: Lessons from a Grown-Up Country represented the acme of this sycophancy.
Few titles have seemed so out of date so quickly. In the past week the German economy has entered complete crisis. The price of electricity is surging, currently at 14 times the average. A recession is predicted, inflation already soaring. The Euro has dipped beneath the dollar for the first time since its conception. And most of the German population are not happy with their leadership. What happened to Europe’s modern success story?
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The economic historian, Professor Wolfgang Streeck, has long been a critic of Merkel-mania and never fell for the Kampfner school of thought. He foretells that a combination of historic policy failure and the breakdown of the ‘globalised economy’ will lead to the demise of German dominance in Europe. Germany’s fall from grace will be precipitous, and its effects will be widespread. As the war in Ukraine rumbles on, a strategically independent Europe will give way to reliance on America, and the strength of the European Union will ebb.
The conditions that led to Germany’s astronomic rise – a globalized economy, minimal barriers to trade, an artificially low euro – are collapsing. Today, the optimism that once surrounded Germany and its too-big-to-fail state looks increasingly naïve.
“There was a very strong belief that the kind of borderless global economy in which Germany thrived would exist forever. In other words, that globalization had reached a stage where it was irreversible,” Streeck says.
Fast forward thirty years and we have learnt that the globalized economy, integral to Germany’s success, is in fact highly sensitive to “crisis, interruptions, fractions.” This is best evidenced by the shockwaves caused by the invasion of Ukraine, mounting tensions between the West and China, and disruptions to supply chains caused by the pandemic.
“We hear that we should no longer trade with China. Now you can imagine a company like Volkswagen, which is selling more cars in China than anywhere else in the world, may have a real problem if the Chinese market is closed for German products, in the same way in which the Russian market is now closed for German products.”
As hopes for a permanent globalized utopia dissolve, Germany will face “an enormous adaptation.”
First, it will have to endure a hard winter made all the worse by an energy crisis of a scale not seen in generations. Germany’s over reliance on Russian gas will make it particularly painful, and should be understood as one of the worst examples of short-termism in political history. The Greens anti-nuclear bent is encoded in their DNA. And since the 1970s both the German Social Democrats and Christian Democrats have been competing to pull the party into a coalition, the price of which was an anti-nuclear policy.
When Angela Merkel came into power, she was a fanatic supporter of nuclear energy. But when she wanted to change coalition partner from the Social Democrats to the Greens, within a matter of weeks, she restarted Germany’s de-nuclearisation. “This is the reason why energy had to be bought somewhere else. Because we couldn’t produce it anymore.”
The consequences of this crisis on the European Union will be profound. Germany and France are the central locus of EU power in the European Union, akin to an empire powered by the centre but in which the periphery benefited sufficiently. But when the center starts to crumble, what happens to that periphery?
“The Union is already on the brink of disintegration. Think about the Eastern countries – Hungary is playing the role of a spoil sport. Poland has its own ideas of what the EU is for, namely to help Poland prosper and nothing else. And anti-German sentiment, both in the East and in the South is absolutely growing. Meanwhile, Britain has left.”
Simultaneously, calls for extending membership to Ukraine and several Balkan states are growing louder. They will have to be subsidized by the central economies but will also shift the power balance in the Council, and the whole system will become politically untenable.
“The result is that I think the European Union will lose significance for its member states in a gradual process of decay, where increasingly you’ll find sub-collections of member states like the East, like the Mediterranean, doing their own thing.”
Might even Germany turn its back? As it navigates the vast impending hardship Streeck thinks we ought not rule it out. When Trump was elected he inherited a nation in decrepit condition. And the American electorate, in its majority “pointed out that they now wanted a government that took care not of an empire, but of America itself. That was the idea of America First. The Trumpian America First thing was not “Now we are going to conquer the rest of the world, but it was quite the contrary: “Now we must take care of our own country.”
If a Germany First movement is conceivable, the war in Ukraine could be the ultimate catalyst. In spite of early claims that the invasion would be complete in 3 weeks, the stalemate shows no signs of abating.
“Wars always take longer than expected when they begin – they feed themselves, and the more difficult it becomes to try to reach out and make an agreement.”
As the war drags on, the emerging global power dynamics will become further entrenched. The Eurasian continent will become divided. On one side a “Russian-Chinese alliance, where the Chinese call the shots.” And on the other, a Europe that has little strategic autonomy but instead acts as an auxiliary force “in the upcoming battle between the United States and China.”
Germany will find itself strategically and economically diminished, its European superpower status a casualty of a radically changing world. The global economy, in its current form, is proving itself unsustainable. And in its place arrives a bifurcated world with an American sphere of influence and a Chinese sphere of influence. In between will sit weakened and fractious Europe forced into the United States's orbit.
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SubscribeThe new mask and testing mandates seem significant here. The German government has no idea why these are necessary and doesn’t care that other countries aren’t doing it but has passed them anyway. Could COVID lockdowns return to Germany? The answer now is that it’s surely possible.
The evidence is hard against all these policies and the people who forced then through are discredited – Lauterbach was recently caught lying about his own vaccine status – but apparently basic rationality is no longer something that can be expected of Germany! An extraordinary development indeed. What’s worse is that Lauterbach was caught because he literally flashed his vaccine passport app on TV allowing anyone to scan it. This sort of rank stupidity makes British politicians all look like geniuses in comparison.
The sad thing is, Europe’s future as the new “second world” is now becoming apparent to the Americans. The wealth gap is becoming impossible to ignore, and widening. The realization that Europe is not a nation of equals but basically a Latin American style set of stable-ish but poor nations, will soon surely become widespread. All very sad and entirely avoidable. All these “crises” were artificially created by governments after all.
Germany does seem to have a death wish. The immigration fiasco where the migrants self-selected based on Human Smuggler’s ability to transport them was right there with Biden’s allowing of the Mexican Cartels to run USA’s immigration policy. Neither of these optimize the choosing of who is given the right to citizenship. (rather the opposite actually).
Their ignoring Trump’s very good advice on Pileline dominance of the Gas with Russia, the whole Coal/Nuc swap for Windmills and solar – everyone saw this disaster coming but Merkel, yet again. She was from the enemy of West Germany; East Germany, and I guess she ended up winning in the end.
Now to rub salt on the woulds they want to return to the insanely bad self harm they used during covid to damage their citizens and economy to absolutely no purpose.
Their messing about in Ukraine – sheer shooting one’s self in the foot.
That they are essentially the leaders of the EU is surely a sign that organization is doomed.
I’d no idea we EU citizens were so poor! Compared to you in the UK with your food bank queues, impossible cost of living crisis and unsustainable level of inflation heading for 18%+. But now without silly EU regulations you can at least flush your sewage into rivers and seas while the vast profits of water companies are repatriated to their EU owners. Maybe your delusions will abate somewhat after the coming winter with much of your population freezing and starving: and riots in the street?
You’re correct that national governments created many of the current crises, including Germany’s disastrous policies on nuclear and Russian gas. You’re so luck to have geniuses in the UK government, not least Liz Truss! We EU citizens envy you and so wish we could have someone of her calibre to lead us.. lol!
Every article on this site seems to come back to the Hispanic people for you. Perhaps you could give it a rest for a little while.
Linda, MM’s delusional comments would surely be “hate speech”, but for two things:
1) My strong sense is that UnHerd readers do not believe in “thought crimes” like “hate speech”.
2) No one takes these absurd comments seriously.
I for one, accept anyones right to uold whatever views that they wish to hold. I am old enough to allow anything except encitement to commit a criminal act. If I disagree I argue. I don’t downvote.
I think downvoting is just expressing ones opinion no? As long as no one reoports it or try to censor it, I don’t see any problem of downvoting. Otherwise we shouldn’t upvote either.
I’ve read Streeck’s book, How Capitalism Will End, which is a collection of essays first published between 2002-17. The German to English translations of each essay are rather uneven but his message was clear, the plutocrats’ notion of a global borderless free trade zone that benefits only themselves will collapse rather sooner than the Davos set ever imagined.
The message I got from it is that just as a successful democratic republic assumes the existence of a moral and informed electorate so a successful capitalist economy assumes the existence of moral capitalists operating within the framework of a nation state.
Streeck is a marxist economic historian but then we’re all more than a bit marxist these days.
It sounds so weird to hear myself say it, but even this former libertarian and current conservative must admit that Marx does seem to have the tools for our current moment, doesn’t he?
However, capitalism hasn’t ended. Arguably, what’s collapsing is just multi-national corporatism, which actually bears more similarity to mercantilism than capitalism. In that sense, Adam Smith’s Theory of Moral Sentiments likely has more relevance today than Das Capital.
I wondered if China is a model for a successful Marxist economy. I’m just asking the question not expressing an opinion.
In one of his essays, Streeck asserts that unrestrained capitalism is necessarily hegemonic and in the 20th Century hegemonic capitalism demonstrated that it can thrive under fascist, communist and liberal “New Deal” (social democratic) governments and harness these governments to further the capitalists’ core object of wealth accumulation.
I’m not an economist but the message seems to be that a government that marries national politics with unrestrained capitalism is never a good thing for the governed.
It seems to me that, irrespective of the political model used, the greedy self-serving oligarchs end up running the system for their own selfish ends. That is surely the case not only in the US and the UK but also in Putin’s Russia.
I have not read anything by Streeck, but if he claims that “capitalism demonstrated that it can thrive under fascist, communist and liberal ‘New Deal’ (social democratic) governments”, he is seriously deluded. But perhaps it all depends on the definition of “thrive”. If it means that every society will have a minority that’s filthy rich despite the poverty all around it, then yes, communist governments are compatible with capitalism.
I think of China as mostly a mercantilist/ fascist regime trying to squeeze itself into a Marxist suit.
China pulled a billion people out of poverty while in the West the capitalist system plunged most of its population INTO poverty (while their elites became obscenely wealthy).
Given that, I think China fitted itself rather will into that Marxist suit!
Depends what you mean by ‘successful’. Of lifting a billion people out of poverty qualifies I guess the answer is yes. But if success is more about freedom (eg in the US, UK), esp the freedom to grind ordinary people back into poverty while the filthy rich become obscenely rich then I guess China is a failure.
Erm .. China also grinds its ordinary people back to poverty. It is going on right now in China with government-backed bankers stealing the ordinary worker’s savings.
To a limited extent, yes.. but not anywhere near the transfer of wealth from the poor to the rich in the West: $43 trillion in the US. ‘not sure if the UK has any equivalent data? I suspect not.
Not too careful about your “facts”, are you?
“When Angela Merkel came into power, she was a fanatic supporter of nuclear energy. But when she wanted to change coalition partner from the Social Democrats to the Greens, within a matter of weeks, she restarted Germany’s de-nuclearisation.”
So much for the wonders of coalition government.
We did have Fukoshima added to the mix however! Not a small factor.. the German population’s appetite for nuclear plummeted: not much a politician can do to face down something like that.. it was just to cosy up to the Greens..
Ah yes, the Fukushima incident.
Best play safe – I mean, you never know when the next tsunami is going to rip its cheeky way across Germany.
Obviously, a tsunami is the only possible disaster that might befall a nuclear power station! But agred, it was an overreaction coupled with a rising Green agenda. My point was that no politician can do the opposite of what her voters want! That simply isn’t democracy.. only the likes of Putin can do that. But for eure, it was a disastrous decision!
The European Nobility thought they were duping the famously dumb Ukrainians into fighting their fight for them and fooling addled Joe Biden into paying for it. They declared economic warfare on Russia and like many other dumb people they expected their opponent to stand still, with his hands tied behind his back, while they made move after move.
Now, they, and we, have lost. Of course, we will keep losing because it satisfies the Prime Directive of keeping our Nobility in power and keeping the woke Fascists from ruining our lives up close and personal.
A pox on all our houses. Oh, we already had one.
As a Spaniard, Im sorry to read that the Hispanic culture is not Western. In fact, it is one of the fundamentals of the Western Culture.
I bet MM doesn’t really know the definition of Hispanic. He probably thinks it is some race like if in the combo Latin America + Spain there was a single race. I don’t blame him though. This is what the MSM keeps portraying: “all Spanish speaking people are the same. They are all descendents of indigenous people. They all eat spicy food. And more importantly, they all want to live in the USA”.
I wonder how the Internet would explode if we started saying that all English speaking people (British, Canadians, Americans, Jamaican, Nigerian, Indians, Kiwis, etc) are the same.
Can UnHerd ban this clown? It’s basically spam
Don’t ask for banning though. I disagree with him. But not with banning
My friend, you only ever sing the same song. Try something new.
I’ve never understood the German paranoia about nuclear power, and their obsessive urge to close what nuclear plants they had. France has 76 nuclear plants that provide over 70% of its electric power needs. The Germans also went into delusion-mode about the potential of wind and solar to fill their power needs. Now the bill comes due for favoring ideology over common sense.
..in a word, to answer your question: Fukushima..
What makes Germany an empire, by the way?
GDP Rankings by Country
According to the International Monetary Fund, these are the highest ranking countries in the world in nominal GDP:
You miss the point: only two of those countries is in the EU! ..and poor ol’ Italy is a wee bit unstable politically!
“Only two are”!! But there was me thinking that 3 of them are eh??
Ah, mais oui! La belle France aussi. I worded my point wrongly: I should have said two EXcluding poor ol’ Italy!
But the important point here is that Germany was, and still is, economically at the centre of the Euro ’empire’ just as the US is at the centre of the Dollar ’empire’.
If the economics fail the empire falls. Germany was happy to redistribute some of its wealth generated through its currency being artificially undervalued: ie the Euro: at the expense of the peripheral states whose currency (the same Euro) is artificially over valued.. Now Germany is nearly broke thanks to globalisation collapsing and its catastrophic decision to rely on Russian gas and so cannot afford that redistribution!
The EU is Germany’s empire. The man in the interview effectively admitted that much to my surprise. As some have probably jokingly said, the 4th Reich except that now a German professor admits it.
..but it’s not a political empire: it’s an economic (Euro) empire. Like the US empire is a dollar empire. Don’t confuse the EU with the Euro.. it’s all about economic domination..
Get more information about reality.
Great opportunity for United States here: check Three Seas Initiative. Collection of Central & Eastern European countries between Baltic, Black, and Adriatic Seas. If Ukraine survives this war, it will join a bloc for sure. With Poland as the biggest U.S. ally in the region, great opportunity for Anglosphere (U.S., UK, Canada, and Australia).
In two years time everyone will see this for the hysterical nonsense it is.
I understand that current problems stem from a poor fitness of economic offerings to demand since #1995, due to political and marketing interferences against “fittest” economic suppliers, whose success in digital technologies in the 1990′ where a bit too much for electors and politicians to tolerate.
For that reason, populations’ wealth has stagnated or increased much less than expected since 25 years, which has caused some political instability and the belief in some kind of “silver bullets” by electors and politician, to solve the problem without addressing the real issue.
Russia politician organised a hold-up on recently discovered (#2012…) huge Ukrainian gas reserve, because they considered, with good arguments, that otherwise Ukraine would become a huge competitor for Russian gas exports, and that would strike a fatal blow to Russia status as a country. Looking backward, this kind of reaction should not be considered as unheard of in international relations during the last 5 centuries.
French electors and many French politicians strongly believed in a quick Russian victory in a debate where Russia had good arguments, and were mostly working on diplomatic marketing issues, the way they did in 1938.
Germany was very active since Ukrainian gas reserve have been discovered (#2012…) to destabilise Ukrainian pro-russian government and, in fact, to push Russia’s back-to-the-wall, while insulting it through its Ukrainian friends and hoping Russian government would accept a green-carpet defeat without resorting to some kind of military option.
China seems to be the country that has the most to win from a Russian serious downgrading as a country. With 10 time the Russian population and a much greater GDP, they have a huge need for natural resources, including agricultural lands, and I understand they never forgot that a big chunk of Siberia was Chinese territories that were stolen from china in the time of the “unequal treaties”.
US and UK seem a bit confused today, it look like they part should have been to restrain Germany from being too aggressive against the Russian bear for the last 10 years, and that they failed miserably.
I guess the whole picture resemble 1938, when Germany felt compelled to invade Czechoslovakia to avoid bankruptcy, and when French government encouraged them to do so because Daladier’s political marketing toward its electors was based upon “appeasement”, whatever the diplomatic an military realities.
In September, it looks like Germany is still communicating on its capability to aggress the Russian bear to earn money while transferring the corresponding costs to US and UK taxpayers…
24: 00-26:00 thank you Professor Streeck for providing a clear historical context of explaining Germany’s Central roll-in EU for the last decade.
We the American public were spoonfed corporate cable news illusions of merkel’s ” successful leadership”-
Which had covered up until now the tragedy as well as farce behind her policies on German economy, energy, and foreign policy. Back then she looked calm and reasonable compared to the clowns in Washington she met at Summit.
But one month after your interview, Nordstream’s sabotage explosion as explained by Seymour Hersh, and continued use by US military industrial complex of Ukraine as sacrificial lamb for its NATO expansion…
Has revealed to the world what a disaster Merkel’s policies have become…
Highlighted by the prominence of pretentious generation of German politicians like foreign minister Anna-lena Bierbach from the neoliberal hotshots of the so-called ” green party” whose influence probably misled Merkel to support foolishly contradictory energy and foreign policies.
These” green” imposters hated nuclear power plants but loved nuclear bombs so much that they would risk Germany to enter into direct “War with Russia”. A Russia that Germany was buying fossil-fuel from. Then stopped when NATO’s Godfather decided to blow it up.
In Anna-lena’s honor, I think the nuclear-capable medium-range missiles supplied by u.s. for NATO deployments in Germany and Poland are decorated with “forest- green” paint.
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So Hispanic is not Western then? What? You don’t have to be lily white to be Western! Just as white protestant Americans are of European origin (that includes GB btw no matter what you say!) so too are brown mainly Catholic Hispanic Americans: their ancestry is also European: coz Spain and Portugal are in Europe too! So Hispanic culture IS Western culture. Are you perchance one o’ dem white supremacy types?
A member of the UnHerd staff wrote, “As the war in Ukraine rumbles on, a strategically independent Europe will give way to reliance on America, and the strength of the European Union will ebb.”
By 2040, the United States will cease being a Western nation, due to open borders. By 2040, most Americans will reject Western culture, and Hispanic culture will dominate. In California, 40% of the residents are currently Hispanic. Most residents of the state already reject Western culture, and Hispanic culture dominates.
The European Union (EU), Great Britain, and other Western nations must begin distancing themselves from the United States. That means exiting the American security architecture, including specifically the North Atlantic Treaty Organization (NATO). Among Western nations, Germany is best positioned to be their leader due to its economic heft.
To facilitate German leadership, the Germans should consider switching from a prime ministership to a presidential system. The current position of chancellor would be merged with the current position of president; both jobs would become a single president, who is directly elected once per 4 years. A presidential system would encourage the German public to focus on global issues and to review Germany’s foreign policy (once per 4 years) during the presidential election.
Get more info about this issue.
You can look at the situation in a number of different ways but it seems to me the answer comes down to doing one of three things:
1. We cosy up to Russia? ..kiss and make up.
2. We (continue to) cosy up to the USA or
3. We Europeans build its own federation/army.
To me option 1 is the obvious choice because the USA (option 2) is the more aggressive and belligerent ally and the relationship will always be too one-sided: its too obvious to say which way!
Option 3 looks to be a poor option in the short-term at least. Europe has too few nuclear power plants, too little oil and far too little gas. Green power is also far too small, again in the short run!
Options 1 & 3 are not mutually exclusive and indeed a good balance could be struck to the mutual benefit of both sides. Russia was our most important ally by a wide margin in WW3 and we should not forget that.
Russia’s aggression has also been far less than the US’s and unlike the US entirely on its own borders! No small point in my opinion.
NATO needs to split from the US over time: A simple solution would be to stop buying US weapons and develop our own: which we do to a large extent anyway. Trump almost did the split for us remember!
Then we Europeans can stand on our own two feet and look Russia in the eye as an equal but (semi?) friendly neighbour. We have much that they want: they have much that we want and it would be much better balanced: That does not apply in the case of the US.
The current situation is utter madness: the best example in world history of shooting oneself in the foot: and for what? or rather for whom? The USA who seem intent on (nuclear?) war with Russia to be fought initially to the last Ukrainian and when they’re all dead, to the last European? The US simply provide the weapons and money and we all die. Eh, no: not a good option!
Are we are doing it for our close friends and allies the corrupt and neo Nazi Ukrainians? eh, no!
Russia will need an ally in its dealings with China as it’s too small to be an equal partner. It needs a partner. It’s not going to be America and India doesnt look too promising but the Indian fear of China might swing it? Who knows: but they’re too busy with Pakistan at present to be diverted.
We live in interesting times. It’d be ashamed to go extinct from nuclear fall-out or climate collapse and not see how it all works out!
Faced with such a load of nonsense and lies from an apparent Russian stooge, it’s hard to know where to begin, so I will merely engage in a minor fact check. Quote: “Russia’s aggression has also been far less than the US’s and unlike the US entirely on its own borders!” O really? Korea and Afghanistan and Syria and Cuba and southwest Africa are all on Russia’s border? Who knew?