Like Sweden and Denmark, Germany is a semi-rational welfare state. It generally relies on a market-oriented approach in areas other than fiscal policy, and it avoided the Keynesian excesses that caused additional misery and red ink in America (though it is far from fiscally conservative, notwithstanding the sophomoric analysis of the Washington Post).
Nonetheless, it’s difficult to have much optimism for Europe’s future when the entire political establishment of Germany blindly thinks there should be more centralization, bureaucratization, and harmonization in Europe.
The EU Observer has a story about the agenda of the de facto statists in the Christian Democratic party who currently run Germany.
…what Merkel and her party are piecing together is a radical vision of the EU in a few years time – a deep fiscal and political union. The fiscal side involves tax harmonisation, a tightly policed Stability and Growth Pact with automatic sanctions for countries that breach debt and deficit rules, and the possibility of an EU Commissioner responsible for directly intervention to oversee budgetary policy in a crisis-hit country. …On the institutional side, the CDU backs a directly elected President of the European Commission as well as clearly establishing the European Parliament and Council of Ministers as a bi-cameral legislature with equal rights to initiate EU legislation with the Commission.
Keep in mind that the Christian Democrats are the main right-of-center party in Germany, yet the German political spectrum is so tilted to the left that they want tax harmonization (a spectacularly bad idea) and more centralization.
Heck, even the supposedly libertarian-oriented Free Democratic Party is hopelessly clueless on these issues.
Not surprisingly, the de jure statists of Germany have the same basic agenda. Here’s some of what the article says about the agenda of the Social Democrat and Green parties.
…its commitments to establish joint liability eurobonds and a “common European fiscal policy to ensure fair, efficient and lasting receipts” would also involve a shift of economic powers to Brussels. While both sides have differing ideological positions on the political response to the eurozone crisis – they are talking about more Europe, not less.
The notion of eurobonds is particularly noteworthy since it would involve putting German taxpayers at risk for the reckless fiscal policies in nations such as Greece, Italy, and Spain. That’s only a good idea if you think it’s smart to co-sign a loan for your unemployed and alcoholic cousin with a gambling addiction.
All this makes me feel sorry for German taxpayers.
Then again, if you look at the long-run fiscal outlook of the United States, I feel even more sorry for American taxpayers. Thanks to misguided entitlement programs, we’re in even deeper trouble than Europe’s welfare states.
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welcome to the fourth reich
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[…] Germany may be more responsible (less irresponsible) than certain other European nations, but the country’s political elite is hopelessly statist. Even the supposedly pro-liberty political party tilts left and wants bigger government. Yet the […]
[…] Germany may be more responsible (less irresponsible) than certain other European nations, but the country’s political elite is hopelessly statist. Even the supposedly pro-liberty political party tilts left and wants bigger government. Yet the […]
[…] As you can see here and here, there’s little reason to be optimistic about the intellectual climate in […]
[…] not a big fan of the German government. Angela Merkel has a disturbing desire to impose fiscal and political union on the European continent. And even the supposedly free market Free Democratic Party seems […]
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Centrists in the CDU need to harmonize THIS equation:
(Merkel + Lederhosen + Cleavage) = A Spectacularly Bad Idea
In other words:
Merkels enorm großer Vorbau symbolisert die EUs zukünftiger Untergang.
[…] the German perspective through Dan Mitchell’s always sharp lenses, you re co-signing a loan “for your unemployed and alcoholic cousin with a gambling addiction”. That would only accelerate the ongoing weakening of the euro as a currency. It would motivate […]
Never trusted Merkel. New she was bad news on day one.
[…] visão pessimista mas provavelmente não irealista: Germany’s Dark Vision for Europe. Por Dan Mitchell. Like Sweden and Denmark, Germany is a semi-rational welfare state. It generally […]
Is it possible that some elements within the German government are attempting to make a unified economy so absurd, that other countries will bolt and give Germany the opportunity to bail?
To rephrase, “it is hard to have much optimism when a strong majority of Europeans, even amongst the “payers”, believes that the solution to permanent sub-par growth and decline is more centralization, bureacratization, centralization.
Europe led the world in the past exactly because it was divided in many geographically adjacent states competing with each other, back when competition was dependent on geographic proximity. Unfortunately that also led to more wars, through it is debatable, to say the least, whether other big countries, China, Russia, etc. fared any better on the violence and misery scale.
European people also grossly misjudged the fundamental reasons for the success of the United states, attributing it to size, when, if anything, size negatively correlates to per capita prosperity. America prospered because of other compensating factors, namely the large initial advantage and endowment of individual freedom it was serendipitously infused at its creation. An advantage it has today almost exhausted and thus America is getting into irreversie trouble herself. But, in any case, the European misconception that size correlates with prosperity was certainly easier to believe and sell, rather than backtracking on the welfare state, and also the US was for a time an intimidating military force (by spending a significant proportion of GDP on low-return military might — which is contributing to its current decline) and so European politicians were more than happy to sell European citizens the very product of politics: mandatory collectivism; as in centralization, bureacratization, harmonization, collective management of the economy.
For Germany in particular, seems like the unfortunate pattern of the German people is to spend a couple of generations building wealth, only to waste it in some mandatory collectivist scheme every half a century or so. Their latest self-destructive project seems to be a unified Europe where political systems and ideology are spared as much competition as possible.
Folks, in historical terms, Europe is the Soviet Union of our times. Historians will one day write about the delusion of prosperity through centralization and harmonization the way they write today about the Bolshevik revolution and self-destruction.