The Economics of the German VAT Hike

I am very happy to be back here at AFOE, if not only, for a brief one-stop guest post about the economics of the German VAT hike and more specifically how market commentators and analists might just be reading the German economy somewhat falsely at the moment in the sense that they are not taking into account the implications of the sustained and evolving process of ageing in the German society. Indeed as Edward noted just a few days ago here at AFOE we might actually be talking about a clash of paradigms or at least a clash between two ways of looking at and interpreting the economic data coming out of Germany and indeed of the entire Eurozone. There are consequently many venues on which this diagreement is fielded and an important one of these is the German economy and more specifically the significance of the VAT hike and below the fold I will give my view on this topic.
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Turkey and the EU: Poles apart?

Like most numbers of the Spectator, the festive, XL-sized holiday edition is marred by the presence of Mark Steyn. But don’t let that put you off, there’s some good stuff there as well. And one of the better bits is an essay by Prof. Norman Stone on Turkey (Potential EU Accession of) (reg. req.).

For the most part Stone paints a picture of the old Ottoman Empire as something much less uniformly Islamic than some think. You should already be aware, of course, that what would later (in truncated form) become Turkey was a multicultural, multiethnic, multireligious state, but if you weren’t, Stone gives you a quick background. (By the time it fell apart, the Ottoman Empire had become the ‘Sick Man of Europe’; but for centuries it was a success.) What you might not have known, though, was that the orthodox Christians of the Ottoman realms were only too happy to be part of a nominally Islamic polity. The orthodox patriarchs and the Muslim sultans saw in the latinate West a common foe. Indeed my own suspicion is that the Greeks felt a keener enmity than the Turks. The sultan, understandably, might well have seen the theological differences between orthodoxy and Roman Catholicism as obscure and uninteresting (how many of us in the post-Christian lands of the west are aware of, let alone take much interest in, the distinctions between the theravada and mahayana strains of Buddhism?) To the bishops of the orthodox world, though, the sultan served (whether he cared about this or not) as a bulwark against the centralising domination of their brother-bishop at Rome.

But what set Stone off was a recent article in Die Zeit by Prof. Hans-Ulrich Wehler. The title of Wehler’s article, which formed part of the contra side in a Zeit-sponsored debate on Turkish accession to the EU, has some unfortunate historical echoes: “Das T?rkenproblem“.
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