What you read in an editorial in the Wall Street Journal on the Greens in Germany. The article by Giuseppe Liturri
[An editorial, taken from the WSJ of 29/04, “pulls the sprint” to the Greens in Germany, in the hope that they will finally be able to put an end to the budget austerity that depresses the German economy and entire eurozone for at least a decade. The outcome is rather uncertain, but this article indicates that overseas the measure is beginning to be filled and German economic policy is less and less tolerated]
A decade ago, Germany’s intransigence on bailouts and debt prolonged the sovereign debt crisis of the Eurozone, one of the reasons why the country’s economic recovery has lagged behind that of the United States.
Another crisis, another delayed recovery for Europe and again the size of the fiscal stimulus appears to be decisive. But the rise of the Green Party in Germany could further push both the country and the continent towards the US model of an aggressive package of economic stimuli. Party that could emerge as a partner or even as a leader of the next ruling coalition. The Greens have gone through a major mutation over time, evolving from an anti-nuclear pacifist party to a pragmatic left-wing group that regularly participates in German federal and lander coalitions.
However, the party still has a strong and uncompromising environmental wing, but the leadership is in the hands of its more moderate wing, which includes Annalena Baerbock, the 40-year-old MP appointed last week to run for chancellor next fall.
“Many people were convinced in the past that the Greens would never deal with economic policy: they are only interested in organic farming and yoga classes, they said,” said Sven Giegold, member of the Greens of the European Parliament and party spokesperson for economic affairs. “But these times are long gone: we are already in government in 11 of the 16 German landers. We are not naive. We know how the government works “.
The eurozone has an inherent tendency towards austerity, due to the Stability and Growth Pact and also because a heavily indebted country like Italy could not borrow so much since it no longer controls its own currency.
Over the past year, however, Germany has also had to go through changes. Merkel has offered her support to a € 750 billion European Union recovery fund, funded by Eurobonds, a big step towards a US-style fiscal union. Her government has also suspended the debt brake to provide aid to the economy hit by the pandemic.
These interventions should have been only temporary; the Greens would make them permanent. “Germany has a bigger debt problem,” Giegold said. “This problem and the lack of investment that is putting our competitiveness at risk”.
The Greens would like to modify and loosen the debt brake to allow the country to take out loans for public investments, a move that, they argue, could be economically smart due to German negative interest rates. “The intelligent entrepreneur does not save, he invests. The smart state does the same, ”reads the party’s platform, which advocates strong investments in Internet network improvements, research and development, charging stations, rail expansions, zero-emission buses and urban development.
All this is comparable to President Biden’s infrastructure plan, in proportion to GDP. However, the Greens do not agree with the US left’s widespread use of the deficit.
Instead, the Party would like to make the EU recovery fund permanent, financed with its own taxes, and reform the Stability and Growth Pact so that “an excessive trend towards saving is prevented and investments in the future can be further increased”, according to what is read on its platform.
The obstacles, as you can imagine, are considerable. Even if the Greens were ahead in September, there would be no votes to amend the constitution.
Throughout Europe, traditional centrist parties have often lost votes in favor of right-wing anti-globalist movements. The EU has already lost Britain to an anti-globalist backlash.
For now, however, the leaders in France and Italy are, once again, observing the path of the United States and are eager to imitate its public budget choices. Germany seems ready to join them.
