Germany’s ‘Krisenmodus’ Has No End In Sight

Authored by Conor Gallagher via NakedCapitalism.com,

The Association for the German Language chose the term Krisenmodus as the ‘Word of the Year’ for 2023. I’m not sure they’ve ever awarded a back-to-back winner, but krisenmodus (crisis mode) looks to have a chance to repeat in 2024.

The current government coalition has lost almost all trust from the public, yet they soldier on determined to make things worse for the vast majority of Germans. The Greens push for more war, the Free Democrats want more social spending cuts, and Chancellor Olaf Scholz and his Social Democratic Party (SPD) are in the middle adopting the worst from both sides and leading Germany to ruin.

The chancellor’s decision making likely won’t get any better after a Christmastime bout with Covid-19 – if he sticks around much longer (more on that below).

On the international front, Deutsche Welle declares that this year “Berlin must find ways to deal with two wars, an increasingly aggressive China, and a world order in transition.”

Led by the ill-equipped and overconfident Green, Annalena Baerbock, Germany’s foreign policy has been disastrous and has spilled over into the domestic arena. Severing itself from Russian energy drained government coffers; at the same time, in addition to the money and weapons already sent to Ukraine, Berlin wants to increase military spending and become more interventionist. After running up the tab in these areas, there are now calls for a renewed fiscal responsibility, which means social spending cuts at home.

A botched energy transition led by the Greens, which has industry collapsing and higher prices for consumers, militarization, and austerity – has proved to be an awful combination for the average citizen. And the data is grim.

Inflation continues to be problematic, the economy is contracting as industry shrinks, exports to China are declining and there is constant pressure from Atlanticists to self-impose a further reduction, living standards are declining, political paralysis reigns on most matters except social cuts and more military spending, wealth inequality grows, and industry continues to leave the country:

Farmer protests are also now taking place across the country in response to the government’s decision to phase out a tax break on agricultural diesel.

Scholz paid homage to the krisenmodus in his New Year’s address (including erroneously blaming blaming Putin for “turn[ing] off the tap on our gas supplies”), centered around the fairytale that Germany’s crises are just a string of bad luck as opposed to the result of government policy. He concluded with the following:

“If we realize this, if we treat each other with this respect, then we don’t need to be afraid of the future, then the year 2024 can be a good year for our country, even if some things turn out differently than we expected today, on the eve of this New Year.”

Such vacuous rhetoric is a sign that Scholz knows the path the country is currently on is doomed and yet plans nothing to change it. If anyone was watching, it was another reminder why Scholz’s approval rating has sunk to a miserable 26 percent and he and/or his government could soon be headed for an early exit.

Will the Government Collapse?

While German law makes the current zombie coalition difficult to kill, it’s not impossible. From POLITICO EU:

In order to avoid a repeat of the helter-skelter politics of the Weimar era, which contributed to the rise of the Nazis, the framers of Germany’s postwar Basic Law sought to ensure stability by creating a political system that required conflicts to be resolved quickly with as little disruption as possible.

As such, they set a high bar for snap elections. Only the chancellor has the power to call a confidence vote in parliament, for example, and only the president can call a new election. That’s why confidence votes in Germany are rare (there have only ever been five) and are usually tactical moves by chancellors seeking to bolster their political standing.

The only case where a chancellor was removed unwillingly was in 1982, when the FDP abandoned its alliance with Chancellor Helmut Schmidt’s Social Democratic Party (SPD), forcing him to call a confidence vote that he lost.

The government led by Scholz just barely cleared a recent hurdle that could have led to its downfall. Members of the supposedly fiscally-conservative FDP recently voted to remain a member of the coalition in an internal party vote on the question. Only 52 percent were in favor of remaining, however. The time in government has been disastrous for the FDP, as its national support has crumbled from 11.5 percent in the 2021 election to around five percent today; if it comes in below five percent in the next vote, that  would mean being left out of the Bundestag altogether. The FDP is now determined to rediscover its opposition to government spending.

That will mean even more friction with the other two parties in the traffic light coalition. While the coalition looks destined to limp along, Scholz might be prepared to abandon ship/his handlers are ready to toss him overboard.

Upheaval Across the Board  – Scholz to Resign?

All bets are off on what comes next. New election laws are currently being challenged, it’s looking more likely that threats of banning a certain party will be carried out, and who knows how much worse (or better if you’re an optimist) the situation is going to look when elections are eventually held.

The latest surprise was the German tabloid Bild reporting that Scholz will soon resign due to his embroilment in scandals that predate his time as chancellor.

This move would be to give voters the illusion of change while doubling down on current policies. The most popular politician in Germany, defense minister Boris Pistorius who is also from the SPD would reportedly be nabbed to replace Scholz. He has support from 55 percent of SPD voters, 58 percent of Greens voters, and 48 percent of FDP voters, but also 56 percent from the conservative opposition CDU/CSU coalition.

The public backing of Pistorius comes despite military problems everywhere. Pistorius hailed the decision to base a brigade of soldiers in Lithuania as a “historic moment.” It was quickly evident, however, that Germany isn’t just low on manpower but also facing shortfalls in everything ranging from artillery shells to tents – a problem that would be worsened by sending an equipped brigade abroad. That could be written off as the military trying to boost its budget numbers, and no wonder:

Pistorius regularly amps up the threat of the Russians and Chinese and says Germany must not just spend more to rearm, but also consider reintroducing conscription. In December he told Die Welt the following:

“I’m looking at models, such as the Swedish model, where all young men and women are conscripted and only a select few end up doing their basic military service. Whether something like this would also be conceivable here is part of these considerations.”

All the money and manpower are necessary for missions in “countries that do not necessarily share our values.” This is the only option, Pistorius says, because “the alternative would be to not have any more contacts with these countries and to simply hand them over to the Russians and Chinese, and that would be a lot more dangerous.”

Germany’s second most popular politician shares the same line of thinking as Pistorius – with a twist. Foreign minister Annelena Baerbock has long argued for a more interventionist approach using her definition of feminism to inform Berlin’s foreign policy. Out of all Baerbock’s frightening statements, her Hillary Cinton-esque efforts to dress up the horrors of war in feminist empowerment might top the list. She devoted an entire speech to it last year, doubling down on that selling point for Ukraine:

Because “if women are not safe, then no one is safe”. That is what a Ukrainian woman said to me as we stood near the contact line in the east of Ukraine – before 24 February 2022.

No doubt the women and all Ukrainians feel much safer now, as do the women of Gaza:

Pistorius and Baerbock’s popularity is confounding because the public opposes their positions. From Deutsche Welle:

According to a survey conducted by the nonprofit Körber Foundation in September, in which 54% of respondents said that Germany should be more restrained when it comes to international crises. Only 38% wanted to see greater involvement — the lowest figure since the surveys began in 2017, when it stood at 52%.

In addition, a whopping 71% of respondents were against Germany taking a leading military role in Europe. It seems Germans want one thing above all else: Respite from the turbulence of world politics.

Pistorius and Baerbock promise the opposite, as does the third most popular politician, opposition leader Friedrich Merz, chairman of the center-right Christian Democratic Union (CDU), which maintains its lead in polls:

Roughly one in three voters would cast their ballot for any of the three parties currently running the government. A CDU-led government, while not much more than a different side of the same coin, could be even worse than the current coalition. They also want to continue to arm Ukrainians to be sent into the meat grinder, and Merz, a former corporate lawyer who has  sat on numerous company boards including BlackRock Germany, would likely opt for even faster financialization of the country.

There are caveats to CDU polling, as well as its potential direction once in government, however. As NC reader Voislav points out:

A couple of things to keep in mind. Germany just passed new electoral law, which is facing a constitutional challenge from CDU. The law is aimed at allocating constituency seats based on the popular vote, which will hurt CSU/CDU as in the past their share of constituency seats exceeded what they would have gotten based on the popular vote. Also, in the last election CSU/CDU was polling in the 30’s as well, but only got 24% of the vote. So it is possible that German polling models overestimate their vote share.

Both these factors may make it difficult for CSU/CDU to form the government, forcing them into a coalition with SDP and Greens (so called traffic light coalition). Last time the grand coalition was formed it hurt CSU/CDU in the next election, so I suspect that there would be a lot of resistance internally to doing this. A coalition with AfD would be more palatable to their base. It could also provide cover to reverse energy policies on Russian gas which are unpopular with their main supporters, West German industrialists and business interests.

Merz has ruled out cooperation of any kind with the Alternative for Germany (AfD), but that position might be softening. In September, the Christian Democrats and the pro-business Free Democrats needed votes to defeat a regional government in a crucial budget bill. They turned to the AfD.

Together they were able to push a tax cut through Thuringia’s parliament against the wishes of the left-wing coalition. CDU General Secretary Carsten Linnemann says that his party remains opposed to forming a coalition with the AfD.

The AfD is an ethno-nationalist party with a neo-Nazi presence that says it wants to pursue a Germany first policy – although their idea of Germany might not involve the millions of immigrants in the country.

I’ve written previous posts on the AfD, but just to summarize: there is a fascist element to the party, but its recent growth is largely due to disenchantment with mainstream parties unresponsive to voter concerns as summarized:

Amongst who count as AfD supporters, people with neo-Nazi attitudes make up roughly 13 percent. Those with far-right authoritarian attitudes account for another 43, which means that 44 percent of those expressing support for the party do so without a general identification with far-right politics.

For about half the AfD’s potential electorate, their vote is a matter of conviction. But on top of that for a large part of the AfD’s electorate their preference is a way of signaling – presumably to what they take to be the mainstream – that they are dissatisfied with the status quo and do not believe that their voices will otherwise be heard. When asked why they might consider voting for the AfD at the next election – as 22 percent of those in survey said they would do – 78 percent said that it would be a sign that they were unhappy with “current policies” with 71 mentioning migration policy, in particular…

Overall, the conclusion of the surveys seems quite clear. There has not been a general shift to the right. In addition to a base of far-right wing support, which makes up 15 percent of the population, the AfD is attracting a protest vote that takes it to slightly more than 20 percent support. This is driven by dissatisfaction with migration policy and a general fear of societal crisis.

This polling supports the conclusions of Manès Weisskircher who researches social movements, political parties, democracy, and the far right at the Institute of Political Science, TU Dresden. He argues that AfD’s support, which is strongest in East Germany, can be primarily traced to three factors:

  1. The neoliberal ‘great transformation,’ which has massively changed the eastern German economy and continues to lead to emigration and anxiety over personal economic prospects.

  2. An ongoing sense of marginalization among East Germans who feel they have never been fully integrated since reunification and resent liberal immigration policies in this context.

  3. Deep dissatisfaction with the functioning of the political system and doubt in political participation.

Rather than trying to confront the rise in AfD’s support with actual policy, the party is under spook surveillance, and the state is inching closer to kicking it off the ballot. At the beginning of December, Germany’s domestic intelligence classified the Saxony state branch of the AfD party as a “threat to democracy.”

Voters refuse to get the message. In a survey conducted Dec. 18 to Jan. 1 by the opinion research institute Civey and the Saxony newspaper, Sächsische Zeitung, the AfD only increased its support, coming in at 37 percent compared to the CDU’s 33 percent.

German elites likely believe that banning the party, which would effectively disenfranchise a quarter of the population, will bring stabilization and allow a continuation of current policies, but it’s just as likely to lead to an accelerated breakdown and Weimar levels of chaos.

And yet such a move would fit entirely with the default response in Germany (as well as across the West nowadays), which is to discredit the voter as stupid, racist, fascist, and oftentimes all three.

Take the farmers’ protests happening now across Germany. Rather than respond to their real grievances, the government’s answer has largely been to smear them as racists or fascists. Economics minister from the Greens, Robert Habeck, said this about the protests: “”Calls are circulating with coup fantasies, extremist groups are forming and ethnic-nationalist symbols are being openly displayed.”

The effort to discredit the farmers is based on the fact the AfD supports the protests and the following:

According to German media outlet Spiegel, members of several right-wing extremist groups, including The Homeland and Third Way, were at a rally in Berlin, as were AfD members. In Dresden, a video on social media showed people carrying flags from the Free Saxony right-wing extremist party clashing with police.

Well, okay. I’m not sure how that invalidates their complaints summed up here: “For a farm like mine, I would lose about 10,000 euros,” said a farmer from Bavaria, Ralf Huber. “For our businesses, it’s a catastrophe.”

What’s crazy about the efforts to smear people with real economic and other policy grievances as Fascists is that there is a pile of evidence suggesting that those grievances ignored can allow fascism’s roots to grow. A 2021 study published in the Journal of Economic History showed that voting data from a thousand districts and a hundred cities for four elections between 1930 and 1933 showed that areas more affected by austerity had more support for the Nazi Party.

Another from 2022 detailed by The Political Costs of Austerity:

Fiscal consolidations lead to a significant increase in extreme parties’ vote share, lower voter turnout, and a rise in political fragmentation. We highlight the close relationship between detrimental economic developments and voters’ support for extreme parties by showing that austerity induces severe economic costs through lowering GDP, employment, private investment, and wages. Austerity-driven recessions amplify the political costs of economic downturns considerably by increasing distrust in the political environment.

Hope on the Left?

On Monday, Sahra Wagenknecht presented her recently announced political party. The “Sarah Wagenknecht Alliance (BSW) — Reason and Fairness” primary focus is on working class issues, which includes repairing ties with Russia and examining whether German interests are congruous with those of Washington. A quick summary of Wagenknecht’s positions from Tagesspiegel:

Wagenknecht has positioned herself as a sharp critic of the federal government’s Ukraine policy and the energy sanctions against Russia. She is for the import of cheap natural gas and against overly strict climate protection policies . She also advocates limiting migration . She has repeatedly described the Greens as the most dangerous party. Additionally, a poll from Bild am Sonntag that shows 27 percent of people in Germany would consider voting for the Wagenknecht-led party.

Other polling shows Wagenknecht’s party already more popular than the war mongering Greens. Should BSW prove popular, Wagenknefcht can expect to pilloried in the media more than she already has. The party is already under fire because out of roughly 1.1 million euros of contributions, 75 euros came from Russia (compared to 7,086 euros from the US).

Wagenknefcht also has detractors on the Left. Oliver Nachtwey writes at New Left Review that, “By juxtaposing ‘globalist’ institutions to national ones, Wagenknecht’s counter-programme offers nothing more than an improbable return to capitalism’s Golden Age.” On the ideas of ‘sovereignty’ and ‘industrial competition’ Nachtwey writes:

Both concepts, which feature heavily in the work of sociologists like Wolfgang Streeck and Anthony Giddens, are dubious from a Marxist point of view, since they substitute internationalism with national-Keynesianism, cooperation with capitalist rivalry. Moreover, if reverting to an embedded national welfare state is difficult in a world where capital flows and productive relations have become transnational, the likelihood is that this project will simply end up producing a regressive form of politics. Wagenknecht exemplifies this danger. Her singular focus on resovereigntization has supplanted a politics of class with one of the nation.

Maybe or maybe that resovereignization is a necessary first step. As Michael Hudson writes in his The Destiny of Civilization:

There is still a tendency to think of nationalism as a retrograde step. But for foreign countries, breaking away from today’s unipolar global system of U.S.-centered financialization is the only way to create a viable alternative that can resist the New Cold War’s attempt to destroy any alternative system and to impose U.S.-client rentier dictatorships on the world.

It’d be a worthwhile experiment for Germany to find out. Of course, the one easiest way for Germany to find a reprieve from its current malaise is to do the unthinkable: make nice with Russia. It might not bring back the past and restore Germany’s economic model, but it would ease the pain. It would at least mean that social spending wouldn’t need to be cut in order to spend more on militarization and energy subsidies.

The fact that both the AfD and Wagenknefcht are still attacked as Putin apologists for suggesting this line of thinking suggests the krisenmodus is going to get worse before it gets better.

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