“German strategy” (Kyriakatiki Elefterotypia 26.10.2014)
Initial numbers, with no contest are impressive from the start: Germany the country “model” for today’s dominant European politics, Germany of the successful Merkel and Soimple, is at the verge of recession. Owning the 28,5% of the European wealth, any fact of growth retroversion would have been transferred to a new kind of European recession, the third within five years period. Even if the experts maintain that this is a technical foreseen problem and can be easily resolved, for the Old Albion – which just started healing from the 2009 economic crisis wounds, and still carries marks from the 2011 debt crisis – it can be a very painful strike, unexpected for, and difficult to heal fast and immediately. So what the numbers are saying? The German “railroad” from this summer there on, suffers a worrying decline in industrial production, cutbacks and step backs in demand and exportation, whilst the numerical negatives of August 2014 is comparable to the one in February 2009, when the world economic crisis hit Europe. What is the cause of this predicament? It is the decline of a generally globalized economy due to markets reduction, from two major buyers, namely China and Russia, that contribute daily in the today’s international market. Those two economic giants buy less German oriented products. This fact alone spreads a controlled worry amongst the economic moguls, about Europe’s rote. Because if Germany is hold back, then it is certain that neither France nor Italy, the other two European top economic powers, will be able to lead a cure for the economic crisis. In terms of philosophy or mentality if you wish, Germany has a great ally: itself. It is the only country that realized at an early stage that the new form of dynamic and creative exports goes through innovation. Realizing that, changing the global economic market standards with globalization which practically meant that Europe stopped having the monopoly of some “own” products towards developing countries since those are self sufficient today, Germany was fast to invest in innovation, so its new innovative products, mainly in modern technology, became necessary and popular worldwide. And that is what will do again. Its society infrastructures are ready for some time now for these type of situations that need fast corrective actions. But still, even for a short while, the decline in German production speed that translates to a mini recession is enough to worry Europe and the markets. Within this context many and mainly leftwing oriented European political powers, (among them our own official opposition)will be discreetly enjoyed because they’ll believe that finally !!! the wounded Germany, will become more sympathetic towards its European partners. My opinion is that they are wrong to believe such a thing. It would be a strategic mistake to view the German mi recession as weakness in their philosophy and as the key point so they can be justified as “leftist preachers” of the economic law, so the “rightists” liberals of globalization will be goddamned. It will be (and they are already doing it in their analyses) for serious strategic analysis mistake. This Marxist “class” diagnosis cannot be valid in today’s stabilized economy. Germany might overspend a bit on investments, but it will modernize and adapt very fast to global needs for its infrastructures. Still keep in mind: Germany is not abandoning its dogma of a balanced government budget. It is not the war in Ukraine, or the problems of countries in Europe’s south that will convice Berlin for a change in strategy. Even if it exhibits economic understanding to French or Italian budgets, or shows tolerance for the difficulties in Greece or Portugal, even then Germany will continue to insist on continuing the reforms in Europe. And this because it foresees that through them will strengthen the innovation necessary for Europe to become competitive once more on a global level. If Germany becomes more flexible, it will be for the benefit of the European central Bank, where Mr. Mario Draghi will be assisted in buying counties’ public debts, thus to devaluate Euro.
In any case the general outline of the German economic politic, Volfang Soimple’s totem, will remain unchanged. Reduction of European debts as a long term strategy.