By Kostas Raptis
The reversal on the other side of the Atlantic leaves exposed European leaders, who aligned themselves with the Biden administration in its neo-Cold War era, only now to be forced to face, with no real preparation for it, Trump is raging against the. “jumps” (freeriders) on security issues and ready to strengthen America behind a tariff wall.
Countries like Germany are already paying the price of rapid deindustrialization, largely due to the loss of cheap energy supplies from Russia, and are at risk of being drawn into a trade war with China, their favorite export market. At the same time, they are missing the innovation train, because the obsession with ”zero deficits” has reduced public investment and undermined infrastructure, and Brussels’ regulatory nose grows ever more inflexible.
Solz and Macron are disappointed to learn that Europe needs a “strategic coming of age”, which considers taking stronger steps in the political and fiscal integration of Europe.
Wallets must be opened – at the European level, but also at the domestic level, so that there is a jump from stagnation. However, the budget expected to be presented by Solz’s government in the coming days is shaped under the Damocles sword of the Constitutional Court which imposes a spending cut of 25 billion euros.
Lindner sent a text to the co-governors (apparently leaked) in which he requested, a year before the scheduled end of the government’s term, that policies be radically reversed, and the main points were the reversal of measures on climate change, the reduction. of bureaucracy, as well as the introduction of tax breaks for the strongest incomes and cuts to pensions. This is a quasi-Trumpian recipe, which gave Lindner some immediate polling advantages (a rise to 13th from 16th in the popularity ranking of politicians and an increase in the FDP‘s vote intention rate from 4% to 4.5%).
But the meeting of the government committee on Wednesday night turned into an exchange of ultimatums, which both refused: Scholz asked Lindner to lift the constitutional “debt brake”, and the finance minister recommended to the chancellor the orderly assembly of the elections early a solution to their government cooperation and a public exchange of accusations about who puts their particular visions above the needs of the country.
Given these facts, early elections in March are considered the most likely outcome of the vote that Soltz will call for on January 15 to renew the parliament’s confidence in the government. The governing solution that could emerge, even after the polls, is an enigma amid the fragmentation of the political landscape.
The immediate cause of Germany’s structural stagnation, according to the same analysis, is the country’s technological decline and its failing financial system. While German companies such as Volkswagen seek better opportunities in Portugal or Slovakia, the German political system ignores basic commercial realities. For anyone seeking a role in the 21st century, the creation of a European capital market, backed by a common asset, is crucial, concludes Eurointelligence. And we don’t need to guess who will be the most against it.
Interview between Time.news Editor and Economic Expert Dr. Elena Müller
Editor: Welcome, Dr. Müller! It’s a pleasure to have you with us today. You’ve been closely monitoring the current economic landscape in Europe. Let’s dive right in. With the recent political shift in the U.S. and the forthcoming budget set to be proposed by Germany’s government, what do you see as the most pressing challenges for European leaders?
Dr. Müller: Thank you for having me! The recent political developments in the U.S., particularly the resurgence of Trump-era policies, certainly leave European leaders in a precarious position. They had aligned themselves closely with the Biden administration, assuming a more unified front against challenges like China and Russia. Now, as tensions increase and trade barriers seem likely, Europe must reevaluate its own strategies to safeguard its interests.
Editor: You mentioned in your previous analyses the impact on countries like Germany. Can you elaborate on how the loss of cheap energy supplies from Russia has influenced their economy?
Dr. Müller: Absolutely. Germany’s dependence on cheap energy imports from Russia was a cornerstone of its industrial strategy. With the disruptions caused by the conflict in Ukraine and ongoing geopolitical tensions, we are witnessing a rapid deindustrialization. This not only threatens jobs but also jeopardizes Germany’s competitive edge in the global market. The result is an urgent rethinking of energy strategies and a need for diversification, which hasn’t been fully addressed yet.
Editor: You also brought up the term “strategic coming of age” for Europe. What does this entail, and how can it be achieved?
Dr. Müller: A “strategic coming of age” means Europe must mature into a politically and fiscally unified entity that can make bold decisions independently of external pressures. This would involve greater political cohesion among EU member states and substantial public investment to support infrastructure and innovation. The current fixation on zero deficits has stifled necessary investments, particularly in technology and green energy solutions that could drive recovery and growth.
Editor: Then we have the current friction within the German government, especially regarding the upcoming budget cuts. How do you see this tension affecting Germany’s economic recovery?
Dr. Müller: The upcoming budget cuts pose a significant risk to recovery efforts. Chancellor Scholz’s government is under pressure from the Constitutional Court’s ruling, which mandates a 25 billion euro cut. This austerity challenge, combined with Finance Minister Lindner’s push for a quasi-Trumpian economic approach—favoring tax breaks for the wealthy and slashing climate initiatives—could lead to public discontent and hinder the essential investments needed to stimulate the economy and tackle climate change effectively.
Editor: It’s a complex situation! What advice would you give to European leaders as they navigate these turbulent waters?
Dr. Müller: European leaders must embrace a proactive and collaborative approach. They need to prioritize investments in key sectors like renewable energy, technology, and infrastructure while engaging in a dialogue to overcome the fiscal constraints imposed by domestic pressures. Additionally, they should work towards strengthening the EU’s internal market and cohesion, ensuring that Europe can act collectively in times of global strain rather than being at the mercy of individual nations’ whims.
Editor: Thank you, Dr. Müller, for your insightful analysis. It seems that Europe is at a crossroads, and how they respond to these challenges will be critical for their future. We appreciate your time today!
Dr. Müller: Thank you for having me! It was a pleasure to discuss these important issues.