The chief executive of Deutsche Bank Christian Sewing told a meeting in Frankfurt "We are not the sick man of Europe. But, it is also true that there are structural weaknesses that hold back our economy and prevent it from developing its great potential. And we will become the sick man of Europe if we do not address these structural issues now." According to Herr Sewing the issues are: high and unpredictable energy costs, slow internet speeds in many regions an outdated rail network. Additionally, backlogs in digitalisation, red tape and a shortage of skilled workers. He accused Germans of becoming "too comfortable" after the success of the 2010s and criticised what he called a "paralysing aversion to change". The German economy is only 0.2% larger than it was before the onset of the pandemic, suggesting it has lagged far behind its G7 rivals including the UK.
According to Herr Sewing the answer is to cut red tape on banks and push for greater EU integration. He stated that "globalisation as we knew it no longer exists". As a result, the EU should strengthen its internal market and adopt a shared energy and education policy. This would "allow the EU more sovereignty and independence from other states and regions and would be the best form of de-risking in a world of global conflict and uncertainty." It seems to be a call for a 'Fortress EU' (he said Europe, but of course the EU likes to conflate EU and Europe.
He touched on one of the Elephants in the room. The reckless green policy of the German government in decommissioning all its nuclear power stations and making it dependent on Russia for energy. There is another Elephant, whose name the EU refuses to speak. The Socialist founders of the cooperation on coal and steel that morphed into the common market, dreamt of a European Super State. Displaying a worrying level of ignorance, they claimed that Europe was going to be 'reunited'. Of course, everyone from Karl der Große through Bonaparte and Hitler had tried to create a pan European Empire. All had failed. They all failed because they were national imperialists. The new Europe would be different. It had at its core the fear of Germany. Tying Germany into a United States of Europe, they believed, was the only way to stop the Germans being beastly.
The Common Market grew not by consent, but by stealth. Problems created, demanded solutions and the solution was always the one Herr Sewing proposes. More integration. And so we come to the other Elephant, the Euro. Creating a single currency was intended to lead to political union. Political union would require, amongst other things, a transfer union without which the Euro zone is condemned to failure. The rich countries of the north, concerned with the profligate habits of their southern bedfellows were never going to agree. There was, however, another reason. Countries joined the Euro at a fixed rate. Germany joined when the mark had been weakened by reunification. The result is that, according to the IMF in 2017, Germany had gained an advantage of 12% by using the Euro.
The Freiburg based Centre for European Policy in a 2019 study examined the result. It's stark. Germany and the Netherlands are the only countries to have benefited from the Euro. In twenty years Germany's Euro advantage had given Germans a €23,000 per capita benefit. They report that outside the fortunate two, the Euro caused a drop in prosperity. According to them: In France, this fall amounted to €3.6 trillion and in Italy €4.3 trillion. These reductions equate to €56,000 and €74,000 per capita respectively.
That paragon of left-wing virtue the New York Times summed it up in an opinion published in July 2010. " Germany has been free-riding on demand generated elsewhere in the Eurozone. This is not healthy "system competition" between members of the currency union, but a "competitive devaluation" in all but name. It is a zero sum game: Germany has been able to rely on wage restraint because others have not. Germany's beggar-thy-neighbor strategy poses a bigger threat to the single market than the currency devaluations engaged in by Italy and others prior to the introduction of the Euro."
And so that Elephant? If Germany is failing, despite their Euro advantage and having beggared most of their neighbours what does the future hold? Can Germany only survive by turning the EU into an economic colony? Is the EU actually the German Co-Prosperity pact? Is everyone else going to have to pay Danegeld. Danegeld, perpetual Danegeld? In a series of articles published by the Bruges Group, Bob Lyddon has highlighted the hidden liabilities of the Eurozone. In this one from June 2023 he highlights the threat that poses to the Deutsche Bundesbank
Yesterday there was a limited display of sanity by Sunak. For the first time since he usurped the premiership he sounded a bit like a Tory. The country needs more. Keir Starmer is wedded to the EU cult. It is a cult because its adherents ignore economics, democracy to say nothing of common sense in there headlong rush to jump off a cliff. Frankly, I've given up on the Conservative party, but just maybe there is a glimmer of hope. Cut taxes, Frack, Drill and Invest in Rolls Royce Small Modular Nuclear Reactors. Appoint a commission of independent scientists (not paid by the subsidised green lobby) to examine the reality or otherwise of Global Warming. End the EU occupation of Northern Ireland and reunite our country. Before they land, load illegal immigrants onto vessels and take them to British owned distant islands for processing. Refuse to process anyone who claims they don't know who they are, but help those who've lost their papers to find them. Stop wokery and sack civil servants who work for the EU, but are paid by us. All or even some of these actions would dramatically change the political outlook. The fact that Tory MPs who are actually greens would leave would be an added bonus.
Seven years after the Brexit referendum it is time we saw action on delivery. Time we had a government that puts Britain and our security first.
