Germany is not turning on itself

I’ve recently read some interesting but somewhat shocking article, recommended by FT alphaville, in The Globe and Mail (Canada): “Germany’s season of angst: why a prosperous nation is turning on itself”. Fortunately, the author Doug Saunders is wrong.

Describing Germany’s booming economy, he writes:

These are, by several measures, the most successful people in the world. Yet it is very hard to find anyone here who is happy about this state of affairs.

And from my personal anecdotal evidence, he is right. When I talk to my fellow Germans about the economic situation, I have the same impression. But why is that? Doug’s interpretation, that Germany is afraid of change, involvement with the outside world, immigration or technological progress may be fitting with an earlier image of Germany. But I find other explanation much more plausible.

For starters, Germans fear the consequences of the Euro crisis in part because some politicians, academics and the media deliberately nurture fear. From “defending the Euro” to Prof Sinn’s exaggerated Target-2 arguments, from claims of high inflation to a Lehman-moment, the Germans are being told that the economic risks for them are huge and imminent, which is only partly correct (if at all). Interesting enough, the political risks – that the German taxpayers will become the major creditors of the periphery thanks to fear-induced bailouts (money and friendship…) – is discussed much less often.

But more importantly, Germans have lived through 15 years (!) of near-stagnation or mind-bogglingly high unemployment or both. That shapes your expectations in two important ways.

First, Germany knows how difficult it is to integrate and reform an economically (much more) devastated country of roughly the size of Greece. In fact, they have just been through it. So not only are they jolly well fed up with paying for something like that: after cumulated net public transfers of €1400bn (it’s not a typo), there are still €6bn in net transfers going to Eastern Germany. Per month. (The brain drain from former Eastern Germany was heavy, so how much “Western” Germany really payed is debatable.) At the same time, many Germans feel obliged to help European friends according to a recent poll:

A new survey finds that 60 percent of Germans believe their country has to help Greece in the eurozone debt crisis — like it or not.

Anyone caught in this tension will stray to extremes at times (like the person that Doug interviewed). The trigger may be when the Greek press retaliates with Nazi-jargon to German tabloids’ disgraceful headlines. Or when German politicians – supported by part of the German press – keep talking about “rescuing Greece” instead of being honest about what is actually being rescued: German investors and banks.

Second, after a decade-and-a-half-long economic struggle, Germans simply cannot believe that those times have finally passed for good, which is fully understandable for a country in whose national psyche security comes first. And no, Doug, the German boom is neither built on the birth of the Euro nor on “a deliberate strategy to keep labour costs low and productivity high”. It is built on Germany having re(!)-gained its competitiveness (warning: shameless cross-linking) and an ECB that will have to conduct too loose monetary policy for Germany in the years to come.

Doug’s other examples, immigration and a new protest movement, as well as nuclear power and the Libya war, have multiple roots that are too complex to discuss in a single post. He might have a point here, but there are more sympathetic and equally plausible explanations. For instance, the success of a populist and alarmist book by Thilo Sarrazin about the alleged decline of Germany is a late response of the German public to problems that have been piling up largely unaddressed over the last 30 years. In this context, Doug much too easily dismisses the internationally underappreciated contrast to Italy, Netherlands, France or even Sweden (!), not to mention Austria, that no right-wing populist party has made it into the federal parliament during the last 20 years, despite an unmatched economic malaise and a proportional election system.

Germany is not turning on itself. Germans just have a hard time dealing with and making sense of the current economic situation – and who could blame them? But if you give it some time, you will see that the 2006 & 2010 World Cup euphoria was not just a break from a national state of angst.

Where Will It Lead Us From Here?

The German election campaign is cranking up to as close to a throbbing wave of intensity as you are likely to find in modern Germany. Very soon, Chancellor Gerhard Schr�der is going to take on the CDU’s Angela Merkel in a televised debate. Merkel has always had to do it tough in the CDU, as I’ve remarked on before, because she isn’t really the kind of person who fits the traditional shape of the post-war German conservative movement. Last time around, she was party leader but was ditched as Spitzenkandidat (a German term which compromises between a quasi-US presidential candidacy and the reality of a Westminster-style constitution) in favour of the hard-right Bavarian, Edmund Stoiber. This time, though, the polls are running heavily in her favour, after she spent the intervening period selectively eliminating the men (and they were) who did her in the first time around.

This is where it gets interesting. Last week, she was moved to give a speech in which she said a very remarkable thing. Apparently, Germany needs to retrieve the spirit of the Gr�nderzeit. This word is usually translated into English as the Founders’ Generation, which doesn’t sound terribly interesting or controversial. The point is, though, which generation, and what did they found? When you speak of the Gr�nderzeit in Germany, or Austria, you mean the 1870s and the foundation of united Germany. For some reason the Austrians use it too, perhaps stretching the definition to include the 1867 Austro-Hungarian Compromise or Ausgleich. It’s not an especially controversial word, but then, that is in part because it’s most often used to describe architecture.

Outside Germany, though, you might be forgiven for thinking this pretty eyebrow-raising. In the Anglosphere, it is fairly conventional wisdom to hold that the Wilhelmine empire was a fatal aberration in Germany’s historic development, the point at which the Germans swung off the Whiggish tracks into the future onto that infamous Sonderweg that in the end led to world war, Weimar, Hitler, more war, Auschwitz, and partition. And that foundation, after all, took place by means of conquering northern France. The proclamation of the empire took place at Versailles.

(So far, so clich�d.)

The Left would never in a million years have said such a thing. Gr�nderzeit? The time of Bismarck’s Antisocialist Laws? The foundation of the three-class voting system? Surely the injustices that began the SPD’s historic struggle. Why she did, though, is part of a very important point about identity, history and German politics.
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