If Putin gets serious about a zero-gas policy, there is a risk of a severe shock for German industry. Reduced economic output would lead Germany into a deep recession. Politicians must now take countermeasures.
Autumn 2022 could be the autumn of unreasonable demands for the parties. The looming recession, fueled by a toxic mix of new geopolitical conflicts, record energy prices, disrupted supply chains and rising interest rates (and thus higher investment costs), is putting pressure on politicians.
Now save articles for later in “Pocket”.
If Russia’s President Vladimir Putin gets serious about his zero-gas policy, a severe external shock for this industrial society is inevitable. Consumption in Germany cannot be halved that quickly, nor can new gas sources be developed.
If all energy imports from Russia were to be stopped completely, German economic output would be around 165 billion euros lower and lead to a deep recession, the Bundesbank recently forecast.
Her chance could be that she uses the crisis not to serve her core clientele, but to modernize the country. Only then can Germany emerge stronger from the crisis. For this, however, all parties must lead their sacred cows to the slaughterhouse.
1. Away from the transfer party
The SPD will have to soften its powerful aid policy for the non-working society – pensioners, students and most Hartz IV recipients – more towards the middle and upper part of the income society.
Because it will also have to agree to tax breaks, from which high earners benefit disproportionately in a progressively designed tax law.
The bon mot of the former SPD national director Peter Glotz applies: The SPD must not only sit in the nation’s works council, but must also sit on the board.
Incidentally, this also means that a social policy of “promoting and demanding” includes moderate sanctions if recipients of state benefits do not want to accept a reasonable job despite repeated requests and offers of state further training.
2. Liberal state policy
In a national economic crisis, the FDP will give up its resistance to a renewed suspension of the debt brake and will probably have to agree to a European solidarity policy that will keep the struggling Italy in the euro zone.
If Hans-Dietrich Genscher were still alive, he would have written it down in Christian Lindner’s family book long ago.
And the liberals should give up their resistance to higher transfer payments for the new recipients of basic income if the SPD sticks to a moderate but sensible sanctions regime.
3. Green Pragmatism
The Greens will have to agree to longer use of nuclear power if it serves national energy security.
Incidentally, it is also pure social policy when prices rise less sharply as a result of the expanded supply of electricity and there is relief for consumers on the electricity side.
Now even the Ukrainian government is calling on the Greens to keep the last nuclear power plants running beyond the end of the year.
“The coming winter will be a key winter,” said the advisor to the Ukrainian President Volodymyr Zelenskyj, Mykhailo Podolyak, the “Tagesspiegel”.
In view of the throttling of Russian gas supplies, it does not make sense to shut down the three plants:
It is imperative that we use everything we have to create a new energy map in Europe as quickly as possible and stop financing Russia’s war. “
The Greens will have to accept the longer bridge to the green energy age that has emerged from the war situation and consists primarily of nuclear power, coal and gas.
The Germans have come a long way.
4. Constructive Opposition
The Union is not needed for the relief packages and a possible suspension of the debt brake in the Bundestag (Chancellor majority), but a democratic effort in the fight against the crisis could also encourage Friedrich Merz and his party to adopt constructive policies, from which they will ultimately benefit.
Conclusion: It could be expensive, but even a crisis of the century is an opportunity if politics outgrows itself and the government shows itself to be what it was elected for: solving problems without traditional obstinacy.
The strong US dollar is also contributing to the fact that the economy now has to cope with a multiple crisis.
Because the US dollar acts as an inflation driver in the euro zone.
Prices of food and commodities traded in dollars are rising. Even on the energy markets, where payments have to be made in dollars, German importers now have to pay even more for a barrel of oil or a kilowatt hour of gas.
As a result, part of the inflation in the euro zone, which was 8.9 percent in July, is imported from the USA.
The dollar is benefiting from an aggressive monetary policy by the US Federal Reserve, which has meanwhile raised the key interest rate to a range of 2.25 to 2.5 basis points and is thus drawing much more liquidity from the market than other central banks.
As a result, higher interest rates tend to attract foreign investors, which increases demand for US Treasury bonds. The dollar as a world currency is experiencing its state infusion.
