The cat is out of the bag. After months of denial, it is now conventional wisdom that Germany — and Europe more generally — faces deindustrialisation due to the end of cheap Russian piped gas. “Germany’s Days as an Industrial Superpower Are Coming to an End,” reads a headline on Bloomberg.

From London to Berlin, Western governments do not have a serious economic growth plan. Media outlets have started to admit this grim reality because there is no longer any point in denying it.

Privately, Americans shrug their shoulders and hint that this means they will no longer face competition from Europe. But watching the economy of your most dependable ally — not to mention a key trade partner — implode is not cynical Machiavellian statecraft: it is folly. American leaders talk about creating a new economic bloc which only includes “democratic” nations, only to dismiss the destruction of the European economy. It is obvious to everyone except the truest of the true believers: America has no strategy either.

America’s negligence of its core ally will likely lead to electoral tremors across the continent in the coming years. There is every chance that Europe will drift away from American influence and start to build pragmatic relationships with other countries. The big question is where this leaves Britain, which has much closer ties with the United States than the rest of the continent. It is a question that British leaders will have to ask themselves seriously moving forward.

  • gnuhaut@lemmy.ml
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    4 months ago

    They are spending on energy subsidies, and therefore, “the economy”. It’s just not enough to prevent recession.

    Machine translation of FAZ article:

    The energy crisis has caused public debt in Germany to rise to a record high. According to the Federal Statistical Office, at the end of the first quarter of 2023, the federal government, federal states, municipalities and social security funds were in debt to the tune of 2406.6 billion euros. Compared to the end of 2022, this was an increase of 1.6%. Compared to the first quarter of 2022, debt increased by 3.8%.

    Compared to the previous quarter, the federal government’s debt rose by 2.4% to 1659.6 billion euros. “This was primarily due to the increased financing requirements as a result of the current energy crisis in connection with Russia’s war of aggression against Ukraine,” the office announced in Wiesbaden on Wednesday.

    The increase in federal debt is therefore largely due to extra budgets. The Energy Economic Stabilization Fund, which was established at the end of 2022, accounted for the largest share. The debt of the Corona Economic Stabilization Fund also continued to rise. For the first time, the special budget for the Bundeswehr also created debt.

    • Ooops@kbin.social
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      4 months ago

      Oh, no! Their debt rose by 1,x percent… to a total of ~64%. That’s nearly 20% under EU average. And while countries with rates of 100-160% (let’s not even talk about Japan or US as they are playing in another league entirely) take on more debt to push the economy in times of crisis Germany is not spending anything as no new debts (beyond 0,35%) are allowed constitutionally.

      Sure… Germany totally has a debt problem. One of removed politicians stuck in economic ideas of the 1970s that still don’t understand the difference between a country’s economy and business economy. So they refuse to take on any debt when everyone else does to make their location more attractive for companies via investments.

      And still the German economy is only shrinking if you round rediculous low numbers up to 0,1%. Guess the country will deindustrialise and collaps any day now. I hope someone tells the companies building massive new production sites in Germany that they are wasting their money on lost case they will lose all its industry… somehow…