Germany’s policy in this millennium has been to kick the can down the road. What happens when the road ends?
Mathew D. Rose is an Investigative Journalist specialised in Organised Political Crime in Germany and an editor of BRAVE NEW EUROPE
A very odd thing happened the other day. The minister president of the north German federal state of Mecklenburg-Vorpommen, Manuela Schwesig, posted a message on twitter showing the parliament of her state illuminated in Yellow and Blue. The text read “Solidarity with Ukraine. An important signal from our parliament”. The response by Ukraine’s ambassador to Germany, Andrij Melnyk, in an unusual outburst for a diplomat, wrote in response “Your hypocrisy makes me vomit”.
Schwesig, who is a German social democratic version of Ursula von der Leyen, has been an important enabler and poster-girl for the Russian-German gas pipeline Nordstream 2, which would have entered Germany in her state. To get past US sanctions her government even created a foundation to acquire, manage, own, provide or let land, tools and machines to enable the completion of the pipeline. The ploy was an obvious scheme to protect German interests in cornering a great part of the EU gas industry in order to lead in the blue hydrogen energy (gas is burnt to create CO2 free hydrogen, but produces an enormous amount of CO2 in the process) market. A few weeks ago she was provided support by Germany’s new minister for economics and environmental protection, Robert Habeck of the Greens, who pushed through labelling the fossil fuel (Russian) gas as “green” in the EU taxonomy.
Maybe Ukraine’s German ambassador could still remember a similar incident. Following the annexation of Crimea by Russia in 2014. The German industrial “champion” Siemens sold four gas turbines to produce electricity to Russia in 2015 and 2016. These were then installed in the Crimea, which was subject to sanctions from the European Union. The trick was to unload them in the Russian port of Taman, bordering Crimea. They were then reloaded and transferred to Crimea, fulfilling a promise by Putin to provide the peninsula with an autarkic electricity provider. Of course Siemens claimed it had no idea that this would happen and had not broken any laws.
These affairs are typical for the German government and corporations: bullying, cheating, and bribing to promote economic growth and corporate profits. As EU hegemon this is never challenged. It is no coincidence that Volkswagen’s diesel cheating devices were first prosecuted in the United States, which is not beholden to German financial power, although the ruse was an open secret in Europe for years. In 2010 Germany’s chancellor at that time, Angela Merkel, had even travelled to Los Angeles, and accompanied by the state Governor Arnold Schwarzenegger, tried to intimidate Mary Nichols, chair of the California Air Resources Board, to stop her from coming down so hard on German diesels. The ensuing US investigation resulted in tens of billions in fines and damages and a number of Volkswagen managers – up to now innocent in the eyes of the German justice system – who cannot visit the US for fear of landing in prison for years.
Then there is the Deutsche Bank, which has had to face innumerable prosecutions and paid billions in fines in the US until Donald Trump, whose loans from Deutsche Bank are now under investigation, became president and apparently intervened behind the scenes. Or Germany’s internet finance champion Wirecard, which was protected by the German government, central bank, and public prosecutors over years, including the same public prosecutors instead investigating Financial Times journalists who were exposing the fraud. In 2020 Wirecard collapsed, as predicted by the FT. Germany is investing its energy protecting the politicians and prominent businessmen involved in the scandal. There are even stubborn rumours that the German intelligence agencies assisted one of the Wirecard managers to flee the country and go into hiding. As the USA has demonstrated extensively, there are no laws for a hegemon, nor any rights it needs to respect. The same is true for Germany in the EU.
As EU hegemon Germany has led the EU into a number or crises, which are now coming to a climax. It has not only discouraged investment in renewable energy in Germany, but throughout the EU, protecting its coal industry and nascent blue hydrogen with tooth and nail. It has protected its vehicle industry, so crucial to its economy, by sabotaging directly and indirectly almost all EU laws concerning cleaning up the environmental benchmarks of the EU vehicle industry, including the pretence that hybrid cars were green technology to enable maintaining their high sales of expensive, high CO2/NOX SUVs. It has made a shambles of most EU member states finances, resulting in misery and suffering. Germany has done what all hegemons do, made everyone else pay for its entitlements, as we saw so clearly with Greece. Behind the EU’s veneer of liberal utopianism is cold blooded corporate power and its champion is Germany.
The German political class is not doing this for its own citizens. Decades ago it decoupled from its people and dedicated itself to supporting German corporations, and these decoupled from Germany to maximise profits internationally. The German mercantilist model has been imposed upon the whole of the European Union – Germany’s European Union. All the real problems facing Europe, economic, environmental, levelling up, poverty and inequality, refugees, workers rights and many more have not been solved, but kicked down the road while maintaining the neo-liberal corporate diktat. The symbol this for policy is former German chancellor Angela Merkel. Now it appears the road is ending and there are still no solutions in sight, just the same old make the wealthy wealthier and let everyone else poorer pay for this – and of course claiming that Germany has not broken any laws, most of which they make.
Just when it looked like the Germans were going to tighten the screws of austerity again, forcing the ECB to raise interest rates and EU nations to slash their budgets, after they had opened the financial flood gates to protect the interests of European corporations in the Covid crisis, the war in Ukraine has brought that show to a close. The Germans and EU political class are scrambling with massive virtue signalling, as did Ms Schwesig, and is doing everything to salvage EU corporations by exempting Russian fossil fuels, agricultural products, and diamonds (to Antwerp) from sanctions in Europe, or permitting the export of Italian of luxury goods to Russian oligarchs who may be forbidden from visiting Europe, at home in Russia. The same is true of the EU’s “committent” to Swift sanctions, where all Russian banks that were critical for EU business with Russia were not included.
This has led to one of the most absurd political situations imaginable and shows how entangled the EU is in the web of German lies and prevarications. With its pretensions of self-righteousness as a champion of the Ukrainian people, it is simultaneously financing the Russian war machine that is massacring the Ukrainians.
But none of this hypocrisy is going to spare the people of Europe true hardship. Renewable energy was not just about climate change, but also emancipating Europe from dependence upon nations like Russia, the Gulf States, and the USA. But any economic change in Europe means upsetting the business status quo, which means the economic system built into the EU centred on the German economy and corporate profits. It is to this status quo that Germany and the EU are clinging, as we saw in the Covid crisis. The answer to “build back better” was green nuclear energy and gas and kicking the can down the road to insure corporate interests.
The citizens of Europe will now be paying a high price for the failure of their political class. What we shall be seeing in the very near future is an increasing rate of inflation due to rocketing energy and food prices, a further breakdown of supply chains, and major fall outs in the financial and corporate sectors. While many are hoping that there might now be real structural change in EU economic policy, it will end the same as the past two financial crises, with central banks and governments showering corporations with money. Germany has already shown the way. After repeating there is no funds for a robust renewable energy programme, 100 billion euros are now to be invested in military hardware and the usual corporations who are their clientele. Instead of becoming serious about energy independence and stopping climate change, in the name of softening the current crisis, European politicians are proposing, of course due to the war, watering down even further or even postponing goals set to achieve just this, to protect corporate profits.
One does not know where to begin with the possible fallouts due to the crisis coming our way. The semi-slave labourers form Eastern Europe who are carted to Western Europe as cheap labour may also be in for a shock when they discover that Ukrainian refugees are willing to harvest cucumbers, slaughter chickens, and cut up meat for half the price. We may even see true solidarity in action as EU governments exempt Ukrainian refugees from the minimum wage so that they can find work.
It will be interesting if the appreciable increase in the minimum wage promised by the new German coalition occurs or is postponed due to the war and high inflation, although by then it may not even cover the real increase in the cost of living, much less provide some sort of progress in reducing inequality.
There are so many consequences facing the EU from this war, which they could have prevented, not to mention reducing the impact. The European political class and the corporations they are beholden produce an etheric field of smoke and mirrors, a parallel reality. They have mainstream media supporting them. War fever and hypocrisy will initially do the rest.
But this time kicking the can down the road may not function. However after decades of having policy dictated to them by corporations that is all the European political class knows how to do, beyond lying, prevaricating, and moral posturing. This is nowhere more evident than with the current government of Germany: a bumbling chancellor (the Social Democrat Olaf Scholz); a foreign minister (Annalena Baerbock of the Greens) who campaigned on getting tough with Russia (obviously having not the slightest glimmer of the consequences, as we are now seeing); an economics minister who wants to prove that the Greens are just as loyal to corporations as the other mainstream parties, and, a finance minister (the Liberal Christian Lindner) who keeps serving up neo-liberal nostrums and whose party’s motto appears to be “Corporations: you pay us and leave the dirty work and lying to us”. Add to this that the president of the EU Commission, Ursula von der Leyen, comes out of the same political stall. Not the sort of team you want leading you at this moment – and they will determine EU policy.
As Wolfgang Munchau noted; The EU is cheering on the Ukrainian side from a safe distance, watching from warm living rooms, heated by Russian gas. When many EU citizens no longer can afford heating gas, be it from Russia or the US, what then?
Support us and become part of a medium that takes responsibility for society
BRAVE NEW EUROPE is a not-for-profit educational platform for economics, politics, and climate change that brings authors at the cutting edge of progressive thought together with activists and others with articles like this. If you would like to support our work and want to see more writing free of state or corporate media bias and free of charge. To maintain the impetus and impartiality we need fresh funds every month. Three hundred donors, giving £5 or 5 euros a month would bring us close to £1,500 monthly, which is enough to keep us ticking over.