Scholz's heretical plan in the face of the siege of Europe

Alarming economic weakness; loss of weight in the tense world geopolitics; pressures to escalate the arms race.

Oliver Thansan
Oliver Thansan
30 March 2024 Saturday 10:27
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Scholz's heretical plan in the face of the siege of Europe

Alarming economic weakness; loss of weight in the tense world geopolitics; pressures to escalate the arms race. Europe seems to be entering into irreversible decline. War would not be of much help to him.

The story of Europe's irreversible decline is being written these days with accentuated intensity. This is a true siege of the fortress from all cardinal points, first of all the economic one; but also the political and the strategic one. It takes a lot of faith to maintain convictions. The negative data is gathering just at the doors of elections that will be crucial and in which the alternatives seem to be reduced to involution or inertia. In both cases, path to disorientation.

The economic outlook accumulates disturbing indicators. The latest growth data for the area confirm persistent stagnation, the result of several factors that converge in the same direction: fall in investment, decline in consumption, deindustrialization and weak increases in productivity.

The best exponent of this sad reality is Germany, whose fragile state is the daily headline of the world press. Compendium of the economic ills of the continent. The German miracle is once again presented as a burden for all of Europe.

With its automobile sector, the true heart of its industrial power, in panic in the face of the aggressive commercial policy of Chinese electric car manufacturers. On the lookout, the chemical and everything related to the green economy. Even Spanish businessmen, traditional gregarious admirers of Germanic virtues, are considering fleeing the country in the face of the difficulties it is going through.

Germany is absent, along with all of Europe, in the technological race, monopolized by the US, with China as a rushing candidate.

Meanwhile, the great eastern power pounces on the world, to compensate for its internal weakness, shipping monumental masses of products into its ports and logistics chains at increasingly lower prices. It eats up foreign markets and rapidly devours the inflation that so worries Western central bankers. Industrial deflation advances.

Meanwhile, Europe continues to crush its natural market, its own. Next year, the old fiscal rules that caused the tragedy after the 2008 financial crisis and whose consequences are still clearly visible will be recovered, actually softened. Especially in the form of that right-wing populism that is expected to advance positions in the June elections. The most immediate threat, but not the only one.

Once again Germany is at the forefront, with its constitutional limitations on debt and its demands along the same lines from its European partners. They are already preparing to clamp down on the second economy of the eurozone, the France of the non-compliant Emmanuel Macron, after the disastrous public deficit figure for 2023, 5.5% of the gross domestic product (GDP), which the economy produces in a anus. Not to mention 7.2% of Giorgia Meloni's Italy.

There will be no real, quantitative balance on the effects of the Next Generation Recovery Funds, approved to stimulate and reform the economy after the pandemic, before the elections. But what is sensed is very modest, barely a tenth of an additional contribution to the growth of an economy that in the eurozone as a whole is flirting with a recurring recession.

The recourse abroad, the United States, the great object of desire, does not seem expeditious. Whether Joe Biden, the current US president, wins, or if the Republican Donald Trump wins, the expectation is that protectionism will increase. More closed doors.

And finally, the war. A serious threat to the future, stability and lives of Europeans. The race towards rearmament is the dominant slogan of the moment. The military spending of European countries linked to NATO already far exceeds that of Russia, but to meet the requests of those in favor of rearmament, with the US at the helm, they would have to allocate at least 65 billion euros more annually. A figure incompatible with maintaining the current balances, already very compromised, of the public budgets of the affected countries.

It is curious that the plan to stimulate the arms industry announced by the current president of the European Commission, the German Ursula Von der Leyen, is estimated at only 1.5 billion. Ridiculous or fanciful amount that should be interpreted as an attempt not to alarm public opinion by discovering the true cost of rearmament.

But in addition to economic considerations, it must be noted that Europe faces the suicidal risk of exacerbating a conflict that would exceed its current geographical limits, Ukraine, mainly the east, and settle in western territory. Whatever its extent, a disaster of unimaginable dimensions.

These days the press has collected the statements of two European leaders, heads of government, the Prime Minister of Poland, Donald Tusk, and the German Chancellor, Olaf Scholz. Both representative of two well-defined trends in the European debate on war. The first has said that “we are in pre-war times... we must prepare to defend ourselves.” The second, in the opposite direction, pointed out: “There are a series of countries, including Ukraine, that are discussing, at the level of defense advisors, how a peace process could be carried out.” Tusk, in full harmony with the drums that sound on the continent, especially from the East and the other side of the Atlantic; Scholz, against the current, heretical. Where will events go?