From champion to Europe's problem, the journey can be short. And it is the path that, writes the Wall Street Journal, Germany risks taking "already a reliable engine for the whole of Europe, thanks to its export-based economy but which today, in a continent awakening from the pandemic, is discovering lagging behind the others".
The numbers at least partially justify such a harsh judgment: the index on economic conditions settled on Tuesday at 12,5 points, worse than the previous figure at 21,6 points and against estimates at 18,30. Meanwhile, Reuters reports that the German government's economic advisors are cutting their growth estimates for the current year: the wise men's committee update now says +2,7% in 2021, from the +3,1% forecast by the Monetary Fund ( already revised down from 3,6% in March). In September, Germany's exports fell by 0,7%, worse than expected.
Of course, in the face of these data there are more positive signs. The Dax index established a new all-time high on Tuesday, also favored by the expansion of the main list from 30 to 40 stocks. Surprisingly, after five negative months, the ZEW index in November signaled an improvement in economic morale in the coming months when, among other things, the social democrat Olav Scholz is expected to present his government (the first in twelve years that he will not deploy Angela Merkel in the front row), forced to start by putting order in the vaccination campaign that sees Berlin, incredible to say, behind Italy.
But it's certainly not there the main problem of the German locomotive which the US newspaper summarizes as follows: “The season of the global economy has now given way to geopolitical tensions, to bottlenecks that slow down supplies, to pressure to bring production back home. The Chinese, until yesterday the most important customers of Made in Germany, today risk being the first competitors. German luxury cars suffer from electric competition. And, demonstrating that the malaise comes from afar, like this industrial production in August it was down by 9 percent compared to six years ago, against +2% in the Eurozone. In the same period, Italian industry, which is strongly linked to that of Germany, grew by 5 percent”.
In short, there is a malaise that comes from afar which undermines the competitiveness of the Germany model, the undisputed leader of the global economy season, the most exposed to exports. Suffice it to say that between 1993 and 2019 the share of the GDP of exports of goods and services was increased from 20 to 47%.The embrace of globalization has been at the heart of Germany's strength. Every year (2021 will be no exception) Berlin wins the title of first net exporter in the world thanks to its extraordinary commercial strength. Even if the share ofexports to GDP is declining for five years, ringing the alarm bell: 30 percent of German jobs are linked to sales abroad, four times as much as the US figure.
To counter the phenomenon there are two possible therapies. Faced with the difficulties on the markets, the outgoing Economy Minister, Peter Altmeier, first focused on the creation of European national champions, clashing with the divisions of European economic policy (see the no to the merger between Siemens and Alstom). The alternative is indicated by China, the other great power that emerged victorious from the globalization season: focus more on the internal market which, translated into Martin Luther's language, means more competition in services starting with financial ones, lower taxes, improvement of the digital network. And, as a consequence, to liquidate the "zero debt" policy, the flagship of the cultural and political hegemony exercised by Wolfgang Schaueble which had the side effect of slowing down the development of infrastructure more than necessary. In this regard, it is enough to read the sarcastic article that "Le Monde" dedicates to the misadventures of "Willy Brandt", the third Berlin airport, which took off eight years late and was already in a tailspin at the first signs of the recovery of the air traffic.
Restarting the economic situation will not be easy, despite the indisputable German virtues. It will take a reform effort comparable to the one Gerhard Schroeder managed to implement at the beginning of the millennium, adopting a drastic labor reform developed by the former head of trade union relations at Volkswagen, a gesture that cost the Social Democrats their leadership but on which Angela Merkel's philosophy was based, so sensitive to the needs of industry and exports.
This time, warns Hans Eichel, Schroeder's minister at the time, it will be more difficult than then because "the external environment is less favorable than it was twenty years ago". For a thousand reasons: the revolution ofelectric car which forces the German model to chasing Tesla or the Chinese manufacturers, trying with difficulty to adapt the production system and industrial relations to the new reality (30 jobs are growing at Volkswagen, warns CEO Herbert Diess); the "bottlenecks" from the container queues that do not spare Hamburg or Rotterdam, to the absence of chips, an indispensable raw material whose lack is currently trying in vain to patch up Infineon.
Meanwhile, i quite a few scandals that have accompanied German finance in recent years, from the periodic thuds of Deutsche Bank to Wirecard scams show that the antibodies of the Bafin system, the German control body, are leaking. The system then pays for the renunciation of nuclear power as well as the use of coal. And so on.
Of course, the leading country of Europe has all the numbers for come out stronger than before, as is appropriate for all of Europe, starting with the mechanical supply chain of North-East Italy, intimately linked to the fate of Bavaria. But this will be it one of the key matches on which the Italian recovery is played. For this reason, alongside the match at the Quirinale and Mario Draghi's future, he deserves to pay attention to the appointment of Jens Weidmann's successor at the Bundesbank. And, even more, the choice of the new finance minister. It could be the penalty taker Christian Lindner, standard bearer of the liberals who ask to have a say on Weidmann's successor. Or the Green Robert Habeck, more and more 'dovish' in monetary policy.
If the Lindner solution passes for Italy, there will be one more problem. Let us hope that the advice of Nobel laureate Joseph Stiegliz will be followed in Berlin: spare Lindner the “impossible task” of applying his “antediluvian budgetary agenda” to today's financial situation because the FDP's and Lindner's financial policy agenda is not only “an accumulation of conservative clichés”, but above all “it is a XNUMXs cliché”.
