Germany, the poor man of Europe

Last week, Germany's finance minister Wolfgang Schäuble defended the 2010 state budget before the Bundestag. He plans an additional debt of 85,8 million to stimulate the economy, while he preferred to keep silence on plans for general tax relief (which will cost another millions of EUR in future).

As a member of the young generation in Germany, it's difficult to take CDU/FDP financial politics seriously any more. The government is selling off the future of the country in a feeble hope of rekindling domestic consumption. It is now doing something that has been neglected throughout the last decade: increasing domestic purchasing power.

Indeed, from 2000 to 2008, wage raises have been below inflation so that real income actually decreased by 0,8%. This trend continued until 2009. Proud of being export leader in the world, changing governments in Germany supported supply-side measures which would reduce wages and product prices and thereby create affordable products for foreign consumers. In other words, generally speaking, revenues for German enterprises have been generated on the back of the workforce for the last ten years. No wonder that domestic consumption broke down.

In a monetary union (MU), this kind of "beggar thy neighbor"-policy which gives one country an advantage over others due to fewer imports and more exports can only function for a few years. Afterwards, the lack in purchasing power (and thus, imports) has a tremendous impact upon fiscal stability in the rest of the MU and will start to drag the entire construction down.

Leading German economists have responded to this question over the last decade by stressing supply-side measures. If the wages remain low, the argument goes, enterprises have the room to invest and create new jobs which will increase aggregate purchasing power. However, the financial crisis has revealed that enterprises seldom used their discretion to create new jobs or invest in product development and R&D. Instead, they placed their export revenues into flawed financial products and ended up gambling away the fortune of the country.

Therefore, I think it's legitimate to say that enterprises have had their chance. They had their chance for the last ten years, throughout different government coalitions, and enterprises failed horribly in fulfilling their social responsibility. Supply-side measures were a failure, and the government finally understood it.

So it's all about boosting demand now. The best measure to increase domestic purchasing power would be a legally imposed minimum wage in Germany as it is the case in all EU countries except Cyprus. This would equalize purchasing power between Germany and the rest of the EU and prevent a race to the bottom in 2011 when the Schengen criteria are relaxed and more Eastern European workers gain access to the German job market.

However, the government is still too afraid to hold enterprises to their responsibility. Rather than financing purchasing power through the real economy, our current government prefers to reduce VAT for hotels while it finances domestic consumption through tax money. Borrowed money, mind, which future generations will have to repay.

Again, the government is bailing out enterprises like it bailed out the banks in 2009. As a young person, you cannot take this government seriously any more.


for supporting and contradicting viewpoints, see here

the political talk "Anne Will" (in German) had the same topic on Sunday evening, the audio file is here:


Update (10/02/2010): Herman van Rompuy, in a note seen by the German Handelsblatt, condemns the German beggar-thy-neighbor policy as uncooperative and calls for a model similar to the "economic government" proposed by France.

We need a truly European radio station!

The EP webstream doesn't work with my Mac, so I couldn't watch the Ashton and Piebalgs hearings in video. Ska Keller has been doing a live-ticker via Twitter, but I'm not a Twitter fan and a live-ticker is different from listening to the audition yourself.

In Germany or France, I would turn to the live-relay of a radio station. Both Germany and France have their own political radio stations; you get a live coverage of political events, party congresses and the like via radio.

What about the EU? Where's Radio EU? There are two consortiums, Euranet (which imho will suffer badly from Deutsche Welle dropping out) and the Association of European Radios, but there is no supranational European radio station. The only one coming close is EURadioNantes. But despite a lot of good content, EURadioNantes is a radio school, not an opinion maker.

We need a truly European radio station! We need a station that discusses policies critically, gives background information, finds interview partners and provides an overview over the actors and events in Brussels. The Commission, the Parliament and the Council all offer advanced workspaces for journalists; the Residence Palace is the perfect environment for the shaping of a supranational public sphere. All the location factors are met. So...where are the European radio stations?
Professional Brussels-based radios?
Brussels journalism school projects or student radios of the VUB or the ULB?
I don't see any.

It can't be that hard to organize a radio presence at the hearing of a Commissioner. After all it's possible to organize live commentaries and interviews at any random first-league football game in Europe...

North Sea grid: A test case for European leadership

With the new power grid that nine European countries are planning to install in the North Sea, the EU can easily increase the share of renewable energy to 30% by 2020, Justin Wilkes, policy director of the European Wind Energy Association (EWEA), told Deutsche Welle. It can only be hoped that the EU will indeed raise its commitments and start to be a veritable leader in the development of stable renewable energy sources.

Unlike the Desertec projects in the MENA countries and in Southeast Asia, the project headed by the Commission can produce results within ten years. Its success or failure will be an important milestone for the other two projects. It will show whether the ambitious projects can work or not. The essential questions for success or failure in the North Sea are:

• will the participating countries fully cooperate, invest their resources and clear out legal obstacles? Or will fearful national politicians maintain a backdoor? (in which case everybody loses according to the prisoners' dilemma)
• will the participating enterprises and credit agencies make a long-term commitment that can endure setbacks?
• will citizens be prepared to give attention and donations to the project so that it can become a space for personal investment and personal identification?
• will the media continue to report about the issue, so that the climate change discussion can maintain the momentum it has at the moment?
  

If the European aspiration is to be the leader in renewable energy in the world, this project must not fail. Since Copenhagen, the international negotiations are even less of a common effort and even more of a national power game. The Chinese lion has woken and will claim a greater say in global politics. After the soft power approach has failed in Copenhagen, the EU can win back its influence through enormous, astonishing success in its own front yard. The North Sea grid will be a test case: Can European countries unite for the greater good, or will we have another lose-lose situation as in Copenhagen?


Cross-posted on Th!nk about it

Interacting with politicians? It's possible

Germany is just struggling with a question of German-Polish relations. It's about the appointment for a cultural foundation that works on remembering European reconciliation after the second World War. The Chancellor wants a Polish-hostile CDU politician to sit in the commission; our Foreign Minister Guido Westerwelle is against her appointment.

Inspired by a discussion on the news portal tagesschau.de and by Conor Slowey, I wrote an email to the minister, trying to give support. What was I thinking? Maybe my email is one of tens of thousands that arrive in these days. Maybe not. Maybe the foreign minister does not get a lot of popular feedback, apart from newspaper comments and articles. And these, as we all know, come from journalists in the high political echelons that are remote from the common people. So I thought a little popular feedback might be a good think. Never expected to get a reply. But today it came, certainly written by his deputy staff rather than himself.

Dear Mr Feldhof,

thank you for your email on 6 December 2009 and for the support that you expressed. I was very happy to receive it.

As the German Foreign Minister, I have to represent the interests of our country. One of them is to increase relations with our neighbors. To me personally, it is an important point to project the profound relation that Germany has with its western neighbors to Poland as well. ... I will continue to support this direction.

Again, thank you for your email and your support. Personally, all the best to you.

Guido Westerwelle

(my translation)

It doesn't sound like a standard answer they send to all their respondents, does it?

I believe that everybody with the courage to voice his opinion can reach someone in political life. We just have to start writing emails.

Due respects to Herman van Rompuy

The new President of the European Council is changing the tone. For the first time, only the heads of state and government were allowed at the table of the European Council. Foreign ministers were banned from the room, as were all political advisors. What used to be a big circle of delegations sitting opposite each other now became a very cosy setting. The heads of state didn't need their TV screens any more to see their counterparts as all 27 convened at the same table in the middle of the room, writes Le Monde. It probably goes too far to say that Herman van Rompuy assembled his "cabinet" for the first time, but the new Council President has definitely made an impression on the country leaders.

His first tones are absolutely pro-European. Van Rompuy sees himself as a federalist, not shy of using the "f-word". In his speech at the dinner on Thursday, he clarified that he sees the European Council as a working institution, not a talking institution. "We have to focus on taking political decisions rather than our traditional conclusions", he said (my translation).

Next Tuesday, van Rompuy will fly to Spain to talk to Zapatero about the Spanish Council presidency - and to make it clear that he is in charge now, according to Le Monde.

My dear hope is that Van Rompuy will continue on this way and disprove his critics. Many thought he was too diplomatic and would not take position. Now, he will be judged by his achievements. Let us hope for the best!

French blogosphere organizing a No Sarkozy Day on March 20th 2010

The French press hasn't picked it up yet, the Italians were quicker. This article was in La Repubblica yesterday. After the success of No Berlusconi Day in Italy, organized through Facebook, French bloggers are up to do the same.
Their actions were less successful when they tried to mobilize people against the candidacy of Sarkozy's son Jean for the principal administrator of business district "La Défense". Yet, after public outrage was voiced through the media over weeks, Jean Sarkozy decided to drop his candidacy.

All the best to the French bloggers in organizing the protests! As the country with the biggest demonstration culture in Europe, France should be able to pull off a decent protest on March 20th.

Football and politics - an analogy?

I don't often go to watch football games, but today I did. Inter Milan - Rubin Kazan. Champions League. Interesting game. Inter won 2:0.

What I found just as interesting as the victory was the observations I made about the fans. The fans were the perfect barometer to show when the game was going well and when it was not going well. A Milan player lies on the ground, tries to defend the ball against two attackers, manages and plays it further. Applause, standing ovations. Another player has the ball, shortly before the penalty box, he could shoot it!! but he misses - a Kazan player takes the ball. Resounding whistles in the entire stadium.

Within a split second, the fans see the situation, understand it and react upon it. They become active and state their opinion. Why does this not happen in politics? You see that a minister screws up (my favorite at the moment is German education minister Annette Schavan, refusing to understand why German students would protest against the run-down university system), and within minutes of the press conference, thousands of protest emails block her mailbox, thousands of comments are posted on her homepage. It's not reality, is it? Instead, people leave it to the media to give opinions and directions.

But why leave it to the media? I'm not waiting for the media report to judge if the Inter guy really got fouled or not. I curse the referee if he doesn't call it. Instantaneously. And I'm pretty sure it really was a foul - if that gives my team a nice free kick.
If it is possible to form a wave of protest for a penalty or a free kick that wasn't given, why is it not possible for a more equal society? For fair immigration procedures without discrimination? For better pay of interns?

Sometimes football is described as politics on the grass. But maybe it's farther away from politics than it would seem...