FLASH
Shkruar nga Andrew Hammond
The latest data show that Germany narrowly avoided recession in the third quarter of this year.
Under normal circumstances, the 35th anniversary of the fall of the Berlin Wall should have been a reason for more joy in Germany. However, this time around, the celebrations of this historic moment will be irrelevant to many people, given the major economic and political crisis the country is currently embroiled in. This crisis was most recently illustrated by the collapse in the middle of last week of the three-party governing coalition, which included the center-left Social Democratic Party (SPD), the Greens and the liberal Free Democrats (FDP).
Chancellor Olaf Scholz dismissed Finance Minister Christian Lindner, at the same time leader of the FDP, declaring that there was no longer "any kind of mutual trust" between them. Scholz, who is himself the head of the SPD, said he would seek a confidence motion by January 15 so that MPs can decide whether or not to open the way to early elections.
Beneath this instability of the governing coalition, a deeper issue is hidden: the breakdown of the traditional dual pole of power between the SPD and the Christian Democratic Union/Christian Social Union (CDU/CSU).
These parties have been the twin pillars of German politics since the end of World War II. But with the SPD now very unpopular, and the CDU/CSU's leadership still uncertain since the end of Angela Merkel's long 2005-2021 government, Germany appears to be moving from de facto two-party politics to one multiparty system.
This is very clearly illustrated by the growing number of smaller parties, which previously functioned as branches of the SPD or CDU/CSU. These fragmentations may mean that politics is generally becoming more unstable and less predictable, with serious challenges after each election for the creation of a governing coalition and thus weakening the chancellor's role.
For most of the 35 years since the fall of the Berlin Wall, many Germans have been largely content with their post-Cold War lot. In general, they have seen themselves as beneficiaries of globalization. But as the growth of smaller parties is showing, this approach may change.
The bad political situation is also reflected in the economic field. The fall of the Berlin Wall hastened the end of Soviet communism and led to the reunification of Germany. But recently, this country has received the nickname of "the sick of Europe". Of course, Germany has long had the largest economy in the region, and is the most powerful nation in the EU.
However, it is already declining. The country has been in a state of hibernation for many years, which has been worsened by the pandemic as well as the energy crisis, which was caused by the Russian invasion of Ukraine. In economic terms, the latest data show that Germany narrowly avoided recession in the third quarter of this year.
However, there are still major challenges after the contraction it experienced last year, at a time when the International Monetary Fund predicted zero percent growth for this year. The major challenges facing the country can best be seen in Volkswagen, which has experienced a sharp drop in profits and may decide to close some of its factories for the first time in its nearly 90-year history. Another worrying sign of declining confidence in the economy could be Germany's birth rate, which is declining after a significant increase before the pandemic. During 2011-2016, the birth rate increased from 1.38 to 1.59 children per woman. However, last year it dropped to just 1.35.
What's worse, public finances could deteriorate further as a result of a decision by the Federal Constitutional Court expected soon, which could reduce tax revenues by up to 75 billion euros.
The case concerns the legality of a so-called "solidarity tax", which was introduced to square the differences between east and west after the country's reunification. If the court overturns the government's decision, it would open a big hole in public finances. This whole situation that I presented above explains the reason why the German nation may be at a historical crossroads today./ Adapted "Pamphlet" from "Arab News"
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