Monthly Archives: November 2014

25 years after the fall of the Berlin Wall – is the world better or worse off with the united Germany?

When Germany’s neighbors – France, UK, Italy, Poland, and the Baltic states – faced the prospect of a unified Germany in 1990, many reservations could be registered. Experiences with a “big Germany” were only 45 years in the past. Margaret Thatcher, Francois Mitterand, and others were very open in their rejection of a unified Germany. Scientists like John Mearsheimer predicted a nuclearization of a unified Germany. Nothing of this sort materialized. But – Germany is not just a, but the core member of the Eurozone and the EU. Germany has a place at the Iran negotiations, and is also active in the Near and Middle East diplomacies. Also, it has its
troops deployed to keep peace or stability in plenty of global crises. There is no Western politician so much in demand in both Ukraine and Russia. On balance – how do we see Germany’s global role today?

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In a world economy where all BRICS are weak or weakening, where Japan is combating its crisis, and only the U.S. has significant growth rates, the weakness of the Eurozone is worrying. What should be done?

The new EU Commission finds itself in the middle of a shooting-out between two increasingly outspoken camps: Should growth be stimulated by quantitative easing, and by state-induced spending programs? Or should austerity policy be continued, accompanied by structural reform in the southern EU countries? This is indeed a question that indicates a divide – mostly between Germany, Finland and the Baltic countries in the second groups, and most of the others in the first. The problems of France and Italy to push their budget deficits below the 3 per cent limit of annual debt against GDP. The southern governments not only encourage themselves, but also Germany to increase spending, forget about balancing the budget (to be reached in Germany in 2015 for the first time in decades), and instead start spending and investing into infrastructure and other goodies. A related fight is going on in the ECB, where a majority supports the line of Mario Draghi to do “whatever it costs” to save the Euro, against some other central bank governors criticizing the lax attitude of the ECB, buying very questionable state bonds ignoring their market value.

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