The model nation for centrist liberals is in political and economic turmoil.
Source - Spiked -
21/01/24
Germany has long occupied a special place in the liberal-elite imagination. Over the past few decades, and especially since the world was upended by the votes for Brexit and Trump, Germany has been held up by the great and good as a model nation. As the rest of the West lost their minds, or so the story goes, Germany remained a paragon of economic efficiency, political maturity and environmental stewardship. The last bulwark of the liberal order in an age of rising populism.
This elite Germanophilia is best embodied in John Kampfner’s Why the Germans Do it Better: Notes From a Grown-Up Country. First published in August 2020, it became an unlikely bestseller in the UK. It received rave reviews and was declared ‘book of the year’ by the Guardian, the New Statesman and The Economist. Its central claim is that Germany has forged ‘a new paradigm in stability’ that the rest of the world ought to follow. It is hard to think of any book that has aged quite so badly, quite so quickly.
Indeed, the news coming out of Germany lately paints a wholly different picture: one of economic collapse and interminable political strife.
Even though 2024 is just a few weeks old, Germany has already been rocked by huge farmers’ protests, with thousands of tractors blocking cities and motorway junctions this past week alone. It has been crippled by transport workers’ and doctors’ strikes. Factories in its much-vaunted manufacturing sector are shutting down and shipping production elsewhere. The federal government is struggling to reckon with a budget crisis and is ushering in a new age of austerity. Data released this week showed that Germany had the worst economic performance last year of any major economy. In the year ahead, it is predicted to have the slowest growth in the G20, apart from Argentina.
So far, the German public has focussed its anger mainly on the current government, led by chancellor Olaf Scholz. The Ampel – the ‘traffic-light’ coalition of Social Democrats, Greens and Free Democrats – can only muster a combined share in the polls of 21 per cent, down from 52 per cent at the 2021 federal elections, and only slightly less than the 22 per cent currently enjoyed by right-wing populists the Alternative for Germany (AfD). But Germany’s problems have far deeper roots than just one unpopular government and its hapless leader. They are structural. In fact, so much of the current crisis can be traced back to precisely the aspects of Germany that are so often admired by liberal-elite observers like Kampfner – most of all, its embrace of green ideology and its democracy-dodging elites.
A world leader in green dogma
Germany’s green movement is one of the oldest and most influential in the world. Its Green Party was the first in the West to be in government – initially between 1998 and 2001, and now since 2021. Other mainstream parties were also early adopters of green ideology. Angela Merkel, one of the longest-serving chancellors of the postwar era, wanted the world to know her as the Klimakanzlerin, the ‘climate chancellor’.
It has taken the global energy crisis, prompted by Russia’s invasion of Ukraine in 2022, to truly kill off Germany’s industrial strength. But the death sentence was surely handed down in 2010, when Merkel’s government initiated the Energiewende – the ‘energy transition’ to renewables.
The Energiewende amounted to the world’s largest single investment in wind and solar power. The trouble with this plan was that, unlike fossil fuels, which can be tapped on demand, renewable-energy sources are ‘intermittent’ – they cannot produce electricity when the wind doesn’t blow and the Sun doesn’t shine. And so they need a constant supply of back-up sources, usually fossil fuels like coal or gas, to keep the grid running. This is why, despite Germany’s green reputation, the energy transition has had little effect on CO2 emissions. It is also part of the reason why Germany developed its now infamous dependence on imports of Russian gas.
Madder still was the Atomausstieg, the plan to rid Germany of all its nuclear plants. Despite nuclear power providing plentiful, reliable, cheap and even carbon-neutral electricity, every major political party in Germany is opposed to it, following decades of hysterical, fact-free campaigns by environmentalists. In 2000, the SDP-Green government announced a nuclear phaseout, with the first plants due to be dismantled in 2007. Then, in 2011, following the Fukushima disaster in Japan, Merkel doubled down on the policy. In April last year, the Ampel closed Germany’s last three nuclear plants. It did so even in the grip of the energy crisis, as the government struggled to source alternative energy supplies to Russian gas, such is its devotion to green ideology.
The results of the Energiewende have been stark. Electricity prices rose by 50 per cent between 2006 and 2017, giving Germany the most expensive electricity in Europe. The energy shock of the war in Ukraine then sent prices into the stratosphere. In 2022, the government was forced to spend some €440 billion – or €1.5 billion per day – bailing out energy firms, sourcing new energy supplies and subsidising bills. And still cutbacks had to be made to energy use, as supplies dwindled. Town councils dimmed or turned off street lights and even traffic lights. Large landlords and housing associations turned down the heating on their residents and rationed their hot water.
In one of his rare complaints about Germany in Why the Germans Do it Better, Kampfner laments Germany’s failure to live up to its lofty environmental ambitions. Ordinary Germans are as fixated on their petrol cars as Americans are on their guns, he complains. This is one reason why emissions from transport are at the same level they were in the 1990s. They are also too hung up on preserving ‘real jobs for real men’, in coal mines and other polluting industries, apparently. Perhaps Kampfner will be pleased to learn that since his book was published in 2020, Germany’s CO2 emissions have fallen to their lowest levels since the 1950s. But, as even Green Party economy minister Robert Habeck was forced to concede earlier this month, this has had little to do with gains in energy efficiency. It was overwhelmingly due to a sharp slowdown in industrial activity, caused by exorbitant energy costs. Major firms like BASF – a chemical giant that is older than the German state itself – are now closing their factories and offshoring production. Even ‘green’ industries cannot cope. This week, Germany’s largest solar-panel producer, Meyer Burger, threatened to shut down its factory in Saxony and relocate to the US.
German groupthink
It’s not as if Germany’s energy woes were unforeseeable. After all, electricity prices were already rising to unsustainable levels before the Ukraine crisis. But the German political class and the system that sustains it are remarkably impervious to criticism and dissent.
Kampfner poses this in positive terms. Germany is a ‘grown-up country’ because its political process is consensual, he argues. The two major parties, the centre-right CDU and centre-left SPD, regularly form ‘grand coalitions’ to govern from the centre. Politicians, he writes, care ‘passionately about process. About getting it right. Not playing fast and loose.’ He contrasts the ability of ostensible opponents to get along with the increasingly ‘adversarial’ politics of the UK and the US. Britain in the post-Brexit era, he says, is ‘infantile’ and ‘improvised’. Where Britain’s leaders are cast as demagogues, rapt by ‘pseudo-Churchillian self-delusion’, Germany’s are supposedly competent technocrats, quietly getting on with the job. They reach consensus through considered deliberation and skilled negotiation, Kampfner says.
But ‘consensus’ in parliament, among the mainstream political parties or even in the media, is not the same as consensus among the public at large. This illusion of consensus ought to have been shattered after the federal elections in 2017, when the AfD became the largest opposition party in the Bundestag. It has been clear for some time now that the way Germany is run is alienating a growing segment of the population. Some have been so angry with the status quo that they have been willing to put their trust in the AfD, a party that is routinely labelled as extremist by the mainstream.
Back in 2017, when the AfD made its first big mark on politics, it was the only party in the Bundestag to question Merkel’s immigration policy. Back in 2015, she decided to open Germany’s borders to around a million Syrian refugees – without consulting parliament or allowing for any political debate. Today, the AfD is playing a similar role in questioning green ideology and the abandonment of nuclear power (although the CDU is belatedly calling for the revival of nuclear, too).
It would have been possible for the political class to denounce the AfD’s more hardline elements while acknowledging the public’s anger and addressing some of their concerns. But instead of trying to win back the voters they have been shedding, the mainstream parties have tried to draw up a cordon sanitaire between themselves and the populist upstarts. Mainstream parties refuse to work with the AfD, even at the local level. Worse still, they have engaged in legal shenanigans to try to delegitimise and undermine it. In 2021, the AfD was placed under surveillance by the German secret service. This was a blatant act of anti-democratic authoritarianism. But Kampfner lauds it as a stirring example of ‘the liberal-democratic state fighting back’. Now, there is even growing clamour from the liberal mainstream to outlaw the AfD outright. It seems if you can’t beat them, ban them.
The result of this suppression of dissent, this aversion to democracy and this enforcement of groupthink is that problems go unaddressed and are allowed to fester and grow.
This has allowed Germany’s elites to become complacent. Merkel, in particular, presided over a notable decline in the public realm, from infrastructure to public services. Today, Germany is no longer a country where the trains run on time. Last August, more than a third of long-distance trains were delayed and Deutsche Bahn has been described by auditors as in ‘permanent crisis’. Even slower is Germany’s internet, where its broadband speed has been among the slowest in the Western world, and its 4G coverage the worst in Europe. Curiously, some 80 per cent of German businesses still use fax machines for office tasks, as do a fifth of doctors’ surgeries. Fax machines are due to be phased out in the offices of the Bundestag by June 2024 ‘at the latest’. German efficiency, at least where tech is concerned, is a myth.
Physical infrastructure is often slow to build and over budget, too. Most notoriously, Berlin’s newest airport, Berlin Brandenburg, took nine years longer to build than planned, and missed seven of its slated opening dates. Clearly, those in charge cannot be trusted to govern smoothly. The technocrats are not as competent as they claim.
Ruled by law
The space for political debate in Germany is also limited by the extraordinary power of the Bundesverfassungsgericht, the constitutional court in Karlsruhe, which interprets Germany’s basic law. Kampfner marvels at this set-up – not least at the way it insulates elite decision-making from the influence of the demos. ‘The judges are figures of considerable respect’, Kampfner swoons. ‘They are not pressurised or denounced as “enemies of the people” as their equivalents have been in the UK.’
Apparently, letting the court adjudicate contentious constitutional questions takes the political heat out of them. But Karlsruhe’s power over politics, and its insulation from democratic pressure, has led to some truly perverse decisions. Indeed, so many of the current wave of protests and strikes can be traced back, in part, to a recent judgement by the constitutional court.
In November, it ruled that the government’s spending plans were in breach of Germany’s debt brake – a constitutional provision that limits the federal government to budget deficits of just 0.35 per cent of GDP. This rule would be questionable at the best of times. Most G7 nations can comfortably borrow more than this without spooking the financial markets or racking up unsustainable debt. As troubled as Germany may be right now, nobody seriously believes it would default on its debt if it carried on borrowing as previously planned. Its AAA credit rating shows that it is more trusted to borrow money than the US and UK.
Nevertheless, the court decided that some of the government’s green-energy investments must be paid for out of day-to-day spending, rather than from a separate ‘climate transformation fund’, lest the 2024 budget exceed the debt brake.
In response to this missive from the constitutional judges, the elected government has been forced to hastily draw up a new budget. Naturally, for a government so wedded to green ideology, it has been reticent to simply scrap its expensive climate measures. Instead, much of the shortfall will be made up by unexpected spending cuts and tax rises. A new round of austerity is now in the offing.
Most controversial has been the threat to abolish tax breaks on agricultural diesel and to introduce new taxes on farm vehicles – a move that would cost already struggling farmers roughly €4,000 per year. This has been one of the key drivers of Europe’s latest populist revolt. It has brought farmers and their tractors out on to the streets in their thousands. Indeed, this was the final straw for a sector that had already endured a decade of green-inspired rules, regulations and cutbacks.
In this sense, the farmers’ uprising last week strikes at the heart of modern Germany’s malaise. It challenges the elites’ devotion to greenism at all costs. It is confronting a political system that tries to insulate itself from democratic pressure – that tries to hide from the devastating consequences its agenda is having on voters and on the economy. For far too long, German elites were given free rein to undermine their nation’s prosperity – to impose their fantasy of a carbon-free society on industries and people that they do not understand, and do not care to. Previously, anyone who challenged this was ignored or demonised. But as the current winter of discontent shows, the political class will not get away with this for much longer.
Rather than being valorised as a model nation, perhaps Germany ought to be seen as a cautionary tale – of how a cosy elite consensus, untroubled by democracy, can take even a powerful, successful country to the brink.
Fraser Myers is deputy editor at spiked and host of the spiked podcast. Follow him on Twitter: @FraserMyers.
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