RUTHFULLY YOURS

As Germany’s federal elections approach this weekend, chancellor Olaf Scholz and his Social Democrats (SPD) are bracing for their worst results since 1887. The SPD is battling with its equally unpopular coalition partner, the Green Party, for a humiliating third place, behind the conservative Christian Democrats (CDU) and the right-populist Alternative for Germany (AfD).

The coming bloodbath for Scholz’s government speaks to far more than the haplessness of his leadership or the unpopularity of his party. Germany has just endured two years of recession – the longest economic slump in its postwar history. Industry is in freefall, shedding almost a quarter of a million manufacturing jobs since the start of the pandemic. A series of terror attacks by Islamists and asylum seekers has made many Germans wonder if the state can do its basic duty to keep them safe. Talk of German efficiency and punctuality now sounds like a sarcastic joke, as roads and bridges fall into disrepair, trains are routinely late and infrastructure projects are plagued by delays and cost overruns. One in five German children lives in poverty. Germany is not merely in an economic downtown – it faces a profound structural crisis, largely of its elites’ own making.

None of these problems began in earnest in the Scholz era. The chancellor is merely the current frontman for a long-running ‘consensus’ that has now become unsustainable and unsupportable. Tellingly, at the last federal elections in 2021, Scholz campaigned as the continuity candidate following the long reign of CDU chancellor Angela Merkel, under whom he served as vice-president and finance minister in a ‘grand coalition’. He even aped her signature ‘Merkel rhombus’ hand gesture to ram this point home. The accusation that ‘politicians are all the same’ rings far truer in Germany than elsewhere. Every mainstream party is implicated in this crisis.

Foreign admirers of Germany praise the ability of its politicians to form a consensus, rather than squabble or try to score partisan points. This is what makes Germany a ‘grown-up country’, as John Kampfner puts it in his staggeringly poorly aged 2021 book, Why the Germans Do it Better.

A less charitable interpretation of contemporary German politics would be that its leaders are gripped by groupthink. Policies, ideologies, ways of doing things become easily entrenched. The result is that when the ideas of the day are bad, they are shared not only across parties, but also by the broader elites, in business, media and culture. The main challenge to this received wisdom comes from the fringes, and so it can comfortably be ignored. Not even a change of governing party will necessarily lead to a change of course.

Of all of Germany’s bad bets of the past 20 years, the Energiewende (energy transition) stands out for its sheer irrationality. For a heavily industrialised economy like Germany’s, cheap and plentiful energy is a non-negotiable commodity. And yet, this core purpose of energy policy seems to have been forgotten by a political class that has long been in thrall to green ideology and climate alarmism.

It has taken the global energy crisis, prompted by Russia’s 2022 invasion of Ukraine, to truly kill off Germany’s industrial strength. But the death writ was surely handed down in 2010, when Merkel’s government announced its plan to make the world’s largest investment in wind and solar power, and to speed up the planned closure of Germany’s nuclear plants.

The easily foreseeable snag 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, or indeed nuclear, to keep the grid running.

Even more baffling was the Atomausstieg, the nuclear phaseout. 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 disinformation by environmentalists. In 2000, the SDP-Green government announced the nuclear phaseout, with the first plants due to be dismantled in 2007. Then, in 2011, following the Fukushima disaster in Japan, then chancellor Merkel picked up the pace. (It did not seem to matter that the Fukushima meltdown was caused by a tsunami, and that the risk of such a tsunami battering Germany was nil.)

Not even the global energy crisis was enough to spark a rethink. In April 2023, vice-chancellor and economy minister Robert Habeck of the Green Party forced the shutdown of Germany’s last three nuclear plants. He did so even as energy prices were soaring to crippling heights as the government struggled to source alternative energy supplies to Russian gas. Before the Greens came into government in 2021, nuclear still supplied 14 per cent of German power.

The energy-price crisis has taken a wrecking ball to Germany’s once thriving industrial base. VW, the crown jewel of the German car industry, is cutting jobs and shutting factories for the first time in its 87-year history. Chemical giant BASF, which is older than Germany itself, is radically downsizing. The most energy-intensive companies are producing 20 per cent less than they were before the pandemic.

The Energiewende is not the only factor here, of course. But even before the war in Ukraine had sent energy prices into the stratosphere, between 2006 and 2017, German electricity prices rose by 50 per cent, making them the most expensive in Europe at the time.

Prior to the war in Ukraine, German heavy industry relied on cheap Russian gas to remain globally competitive. Deals cut with the Putin regime ensured a plentiful supply at a cost well below the global market price. The flow only stopped in September 2022, following the sabotage of the Nord Stream pipeline. The loss of these supplies was devastating to German industry. Having to buy gas on global markets made it uncompetitive effectively overnight.

Germany’s fatal entanglement with Russia was enabled not just by raw commercial interests. The political class and capitalist elites alike were also gripped by an End of History stupor. They were convinced that major wars were a thing of the past, and that geopolitics need not have any bearing on the economy or business. Trade alone, it was presumed, would guarantee peace and stability.

Germany has also been blindsided by China’s ambitions. It was expected that China would always be keen to produce cheap low-end goods for German consumption, while buying higher-end, value-added products from German factories. But today, China is rivalling Germany’s manufacturing capabilities in what were once its leading specialities – particularly car-making. In the space of just two years, Germany’s trade deficit with China has grown five-fold.

In his new book, Kaput: The End of the German Miracle, Wolfgang Münchau likens Germany’s trade strategy, of tying its fate so tightly to cheap imports from Russia and value-added exports to China, to a kind of economic ‘Russian roulette’.

Münchau identifies several other orthodoxies that are slowly strangling Germany’s potential. One is Germany’s addiction to protectionism. He describes how a system of ‘neo-mercantilism’, in which the state (often indirectly) props up and shields legacy industries from competition, ends up stifling innovation and dynamism in the long-run.

Equally damaging is Germany’s ostentatiously strict commitment to fiscal discipline. The so-called debt brake, introduced in 2009 during the global financial crisis, prevents the federal government from running budget deficits of any more than just 0.35 per cent of GDP. This arbitrary and needlessly tight fiscal rule not only led directly to the collapse of the current government (when a judge ruled that its green spending plans breached the debt rules), it has also hampered public investment, leading to a noticeable degradation of the public realm.

Around 4,000 road bridges are now in ‘urgent’ need of repair. Germany’s trains are more regularly delayed than Britain’s. Plans for nationwide rail upgrades that could reduce delays have themselves been delayed, with the expected completion date pushed back from 2030… to 2070. Time and again, the self-imposed fiscal rules, introduced by the SPD but broadly accepted by all parties, stand in the way of fixing things. Outside of crises like the Covid pandemic, austerity is a near permanent feature of German economic policy.

Both the slowing of innovation in the private sector and lack of public investment in infrastructure have combined to make Germany a technological backwater – especially when it comes to all things digital. Germany has some of the slowest internet speeds in the developed world, and some of the worst mobile-data coverage in Europe. As recently as 2023, a third of businesses were still using fax machines ‘frequently’ or ‘very frequently’. Tellingly, Angela Merkel once fizzed with excitement when talking about the opportunities the internet might one day bring, describing it as Neuland or uncharted territory. She said this in 2013, six years after Apple had released the first iPhone.

Germany’s digital laggardness presents two critical dangers. First, legacy firms are missing out on the efficiency and productivity gains of digitisation. Second, the tech products and start-ups of the future are being made and founded anywhere but Germany. The 21st century is fast leaving Germany behind.

The withering of the German state, and the elites’ reluctance to confront difficult realities, is felt most acutely when it comes to questions of crime, safety and borders. A terror attack in Munich earlier this month, in which a two-year-old girl and her mother were killed, was merely the most recent in a spate of mass-casualty events linked to Islamism and asylum seekers. Before Munich, there were deadly knife attacks in Aschaffenburg, Solingen and Mannheim – all in the past nine months. In Magdeburg in December, a Saudi-born ex-Muslim allegedly ploughed his car into a Christmas market, apparently in protest against Germany’s ‘Islamisation’. A terrifying list of plots linked to Hamas, ISIS or with other Islamist motivations have mercifully been foiled in recent years. At the end of last year, Berlin’s police chief warned gay and Jewish people to hide their identities, as their safety could no longer be guaranteed in migrant-heavy neighbourhoods.

The overwhelming majority of migrants to Germany are not a threat, of course. But the decision by Angela Merkel to open the borders to all comers during the 2015 refugee crisis was thoughtless, and dangerously so. Never mind the difficulty of properly vetting the more than a million arrivals in that year alone. Each year since the Covid pandemic has brought an additional 240,000 to 350,000 new asylum seekers. Besides, those whose claims fail, and even those who commit crimes, are rarely deported. Beyond a slight toughening of rhetoric, particularly from CDU chancellor candidate Friedrich Merz, the German mainstream seems paralysed to take any meaningful action. A charter flight carrying just seven Afghan and Syrian deportees to Bulgaria earlier this month was presented by the authorities as a great triumph for border security. It’s as if the establishment fears that any attempt to get a grip on migration or the border would give an unwitting boost to the talking points of the hated AfD.

Indeed, the spectre of the ‘far right’ or ‘extreme right’ is routinely invoked by the mainstream, often with the aim of limiting dissent and silencing critical voices. The AfD certainly contains many deeply obnoxious figures, from its leader in Thuringia, who knowingly repeats Nazi-era slogans, to the lead MEP candidate in last year’s EU elections, who claimed that not everyone who wore an SS uniform was automatically a criminal, to the former party chair, who called the Third Reich a mere ‘speck of bird shit in more than 1,000 years of successful German history’. Yet the reason such scandals don’t dent the AfD’s polling is not that Germans have a renewed sympathy for fascism or hard-right nationalism, but because the AfD often stands alone against an iron-clad mainstream consensus. Often the AfD is the only voice questioning establishment shibboleths, from migration to greenism to gender ideology.

Yet rather than listen to voters’ concerns and anxieties, rather than face up to Germany’s decline, the establishment parties have instead tried to eradicate the symptom. Senior SPD figures, including interior minister Nancy Faeser and party co-chair Saskia Esken, have suggested banning the AfD outright. The AfD is also under surveillance by the German secret service, on the grounds that it is a suspected threat to democracy. And no matter how well the AfD does in this weekend’s elections, the other main parties maintain a ‘firewall’ against it, meaning they will not work with it under any circumstances, even to pass votes in parliament. Around a fifth of voters, in other words, know in advance their voices will be ignored.

Until recently, Germany would be hailed as a model of economic dynamism and political stability. Today, it offers a cautionary tale of how a complacent establishment, impervious to public criticism, drunk on fashionable ideology, incapable of adapting to new challenges, can do catastrophic damage to a once successful country. This weekend’s elections will undoubtedly send a clear message: that the German elites’ consensus is no longer fit for purpose. Just don’t be surprised if that message isn’t heeded.

Fraser Myers is deputy editor at spiked and host of the spiked podcast. Follow him on X: @FraserMyers.