October 13, 2022 - 10:10am
The International Monetary Fund has recently updated its world economic outlook, predicting a global growth rate of only 2.7% (compared to 6% in 2021). One of the worst performers is the Eurozone, which is expected to grow by only half a percentage point — and even that prediction could turn out to be too optimistic.
The problem is particularly acute in Germany, where borrowing costs are beginning to rise and the markets are noticing. The backbone of German innovation and a major source of future growth are its small to medium sized businesses. Almost 40% of total corporate turnover is generated by these enterprises, and they account for 55% of value added in the German economy. They also train the future industry workforce, and are responsible for 1.3 million of the 1.5 million training places in German companies. Keen innovators, smaller companies are often investing twice as much in research and development as their larger competitors. Unfortunately, the current crisis is hitting precisely this sector of the economy hardest, driving up insolvencies among Germany’s so called ‘Mittelstand’.
The tragedy is that the government in Berlin is doing next to nothing to reassure investors. Current proposals are not addressing necessary steps to maintain the country’s industrial base, but instead consist almost entirely of throwing money at the problem. The government wants to spend up to €200bn (almost 5% of GDP) to “shield” enterprises from energy shortages, but it is becoming increasingly clear that no money in the world can increase the supply of energy if, simply, there is not enough. The most important step would be to ramp up domestic energy production, but neither the Social Democrats nor the Greens have any realistic plans in this regard, with the exception of more wind and solar farms, which will not save Germany’s industry.
The problems in Germany go much deeper. As this paper shows, Germany is losing its competitive edge across the spectrum; from education where outcomes are stagnating to entrepreneurship where the number of startups is declining. German universities, once the envy of the world and the role model for America’s Ivy Leagues, have fallen well behind.
So, who will be the future investors in an economy that is losing its entrepreneurs? The answer for many Germans seems to be the state, in the hope that every problem can be papered over by massive government spending, entirely ignoring that more spending with less production will lead to ever more inflation.
But this is not the 1870s or 1930s, where, despite the economic depression, German companies founded in the 19th century maintained their innovative edge. The problem is that the current recession and its driver, a serious lack of energy, is part of a massive wave of deindustrialisation across the continent. That will be difficult to unwind, making this recession unique. Unless a significant course correction takes place, it will be the final one before a descent into a world of permanent European stagflation and economic decline.
Ralph Schoellhammer is assistant professor of International Relations at Webster University, Vienna.
Raphfel
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SubscribeAs a Protestant I do not completely love JD’s reliance upon the Magisterium, i.e. “historical Christianity” because I’m less than convinced that those ideas are adequately based in Holy Scripture. However, I’m much more inclined to accept JD’s logic than the kind of “gotcha” criticisms from naysayers like Stewart.
“Vance, the practical politician, must find a way to reconcile the two camps — or, at least, to preserve his freedom to lean now in one direction.”
Exactly, except that in the secondary role of VP he has to do so – like Ginger Rogers – backwards and in high heels, a feat made more challenging because he’s dancing with Soupy Sales, not Fred Astaire.
The far left have been subverting Christianity for decades, trying to justify their various hateful agendas, like open border ‘immigration’.
How do you know your enemy? They’ll tell you it’s ok to commit suicide and that strangers matter more than family.
JD Vance is brilliant. Looking forward to him demolishing many more midwits who fancy themselves an intellectual match for him.
I’m seriously thinking of getting “I really don’t care, Margaret” printed on a t-shirt.
Let’s get one thing straight – if JC came back down today he’ll be in the refugee camps and with the homeless migrants and not with the likes of JD and his warped view of JCs teaching.
JC may have said ‘render unto Caesar’ but he was drawing a sharp distinction that JDs late arrival to Catholicism fundamentally seems to have missed. Caesar is not God and God knows no national boundaries JD. You choose to work with a man who thinks nothing of demonising others for personal gain and prefers walls to brother and sisterhood. Thirty pieces of silver indeed.
A succinct, lucid exposition of the consensus of many church leaders for the past 50 years, but they have been wrong, as the state of the world and their churches demonstrates.
In the gospels JC spends time with all classes of people, rich and poor. He visits the home of an officer of the army of occupation, heals his daughter and praises his faith; he’d be excommunicated by “right thinking” contemporary Christians for doing that in Gaza.
His family were refugees themselves, but they returned home as soon as it was safe. This is a crucial point; refugees want to return home, unlike so many migrants we have on the UK. A system designed to give temporary respite to distressed people before they could return home has been made into globalist racket which keeps developing countries poor by asset stripping their populations while simultaneously destroying the cultures of the target nations. Presenting this travesty as a moral or Christian act is grotesque.
I also take issue with your disparaging Vance’s “late arrival”. I grew up in an environment where converts were the butt of jokes because of their earnestness but experience has taught me that adult converts are usually better informed and more sincere than cradle Catholics; this certainly seems to be true of Vance.
Maybe Vance can debate the proposition that the Catholic clergy is principally comprised of people who commit sex abuse of minors on social media.
Stewart’s true name is Roderick, not Rory.
He sails under false colours in name, as he did in politics.
Of course Vance was christened “JD”. He doesn’t have any actual given names.
They are the initials of his given names.
Stewart has assumed an entirely different given name.
So, a bit like Tommy Robinson?
Indeed, very much like Tommy Robinson.
Both have a body of followers who mistakenly consider them to be “truthsayers” of integrity.
Is he funded by rich US Zionists to forment conflict in the UK too then?
It’s James David Vance….
So why not simply call himself James Vance, rather than JD?
Unherd if you want to grow get better writers with more diversity of opinion.
Hey guys! I have found out how many there are of us! If you have invested in Unherd or work there DON’T READ ON
In the Daily Telegraph they have a similar article on Vance vs Stewart with 2288 comments, and from 500,000 subscribers that is one comment per 218 subscribers.
In the same time window as the DT, 4 hours, five of us have commented. 5 x 218 = 1090 subscribers!
At say 40 pounds per year …. Gross income = 43, 600 pounds.
I note that you are still giving UnHerd your money, even though it seems you don’t like a single thing about it.
I like a good problem to solve. Unherd is just that. It makes a heavy loss obviously. It deflects any criticism of Starmer. It repeats the government narrative. All the Starmer scandals are ignored. Ali, Hermer, Chagoss, Reeves, Pakistani rape gangs. 4 hour interrogations without a lawyer or the right to silence are now commonplace in UK.
Silence about all of these issues in Unherd.
So who owns Unherd?
Vance is hypocritical trash and his opinions on any subject can be safely ignored.
His willingness to prostrate himself at the feet of the orange buffoon who he labelled a N@zi not so long ago tells you all you need to know about him.
Rory Stewart has more integrity and intelligence in his little finger than the entire MAGA crew combined.
Is this Alistair Campbell?
I’m not sure this is the place for your online flirting, dearie!
I like you
You remind me once again how smart I am.
I think most of us here feel the same sense of gratitude to you.
That’s exactly why I am here – to let you people know exactly how smart you are!
Rory is no match for Vance. JD summed him up with absolute precision when he said he’s a man with an IQ of 110 who thinks he has an IQ of 130.
Remember JD on record saying Trump is an ‘idiot’, and worse. So with this in mind what’s your view on the veracity of his utterances?
That’s the wonderful thing about Christianity.
People are not burdened and condemned by the faults and mistakes of their past but can learn from them and seek forgiveness and redemption.
It’s about the evolution of the mind and soul.
Indeed.
Now back to JD – what veracity would you put in his statements? Or are you giving him an advance pardon?
How about you read and listen to his statements and form your own opinion. Harder but ultimately more worthwhile than this trolling, surely.
Clearly you’re burdened and condemned by not being able to read others’ answers to you.
In other words, you can get away with anything.
If you look at Vance’s IQ tweet, he was making a general point about the incompetence, mediocrity and ideological certainty of elites across the west.
What ever you think about Trump, he has broken through this veil of hive-mind middle-management banality by sheer force of personality.
The IQ issue with Stewart was separate to JDs pronouncement on Catholic teaching BW.
Regardless of IQ scores, and I agree intelligence if measured needs a broader appreciation, one can’t argue Trump’s picks been based on talent, experience, consistency or that intangible, innate intelligence. JD knows the key determinant is fealty.
Problem is eventually ability is required to do as serious job.
Yeh but the criticism of prevailing establishment orthodoxies and their midwit backers still stands.
It remains to be seen how successful Trump, or any populist movement in Europe, will be.
But the neoliberal consensus, technocratic managerialism, US-dominated liberal globalism, or whatever you want to call it, seems to be coming to an end.
Trump’s picks do lean heavily in the direction of Dawkins’s”cultural Christianity” which helps Vance overcome accusations of intellectual inconsistency.
I imagine in private he stands by every word. He is clearly Trump’s intellectual superior and I for one am very glad to see him so prominent, much, much more than his three immediate predecessors.
As for Rory Stewart, this is the sort of undressing that every lazy British political commentator deserves.
Roy suffers the Dunning–Kruger effect.
Stewart is not letting it go on X. He has doubled down and is digging a deeper hole for himself and his abstract view of what moral duty is.
He was also interviewed about his encounter with Vance on the BBC Radio4 Today programme this morning. Stewart is creepy!
RS is spoiling over having made
a. a career as a politcal pundit
and
b. most disastrous US Election prediction ever
The latter clearly delivering ‘a shell below waterline’ to the former, HMS Hood style.
I put myself through purgatory listening to Rory Stewart’s recent political autobiography. He reveals there he wanted to join the Lib Dems as an MP but was persuaded not to by friends and family that he could ‘do more’ as a Conservative. What a disgraceful man. Entering a different party out of career vanity.
And what a disgrace the Conservatives for allowing it. (Or was that part of The Plot to destroy the Conservative Party? But that’s another story which you won’t read about in Unherd)
Entering a different party out of career vanity – Is he the first one to do this?
Perhaps the first one to admit it in an autobiography.
Try reading Occupational Hazards.
All politicians do it. It wasn’t that long ago Vance was slamming Trump as a N@zi after all
9 people downvoting something that actually happened because it’s politically inconvenient?
No. In America this is basically the rule not the exception. We expect our politicians to vote how we want them to regardless of how they feel about it. If they can’t do that we’ll just send somebody else who will. It’s perfectly normal and acceptable that Joe Biden circa 2020 can say things that completely contradict what Joe Biden circa 1975 would or did actually say about the same issue. It’s when the politicians don’t vote how the people want that the people get upset. In 2010, there were quite a lot of Republicans that were voting in a way that contradicted the voters of their district. Many of these are no longer employed as politicians. Others have sensibly seen the error of their ways and returned to the peoples’ good graces. A few are now whining about how unfair and wrong their voters are to the other side’s media outlets. My response to them is.. ‘You had one job’, vote how the people want and you managed to fail at this simple task. Good luck to you in your career outside politics.
I seem to remember a guy called Winston Churchill changing party on a few occasions.
And his party won only one of the three elections it fought with him as party leader.
He did find time to defeat Hitler though.
I’m unaware that he did any actual fighting.
As with most “war leaders” that was for others to do…and suffer.
I believe Churchill’s efforts were confined to meetings with “allies” (but certainly not friends) of Britain which got the country so indebted as to become a vassal, whilst enjoying a rather privileged lifestyle not shared by the British people.
In the end, the object of the declaration of war, Poland, became a vassal state of a similar dictatorship to that from which it was to be saved.
Even with the most benevolent “gloss”, which Churchill’s (or more correctly his ghostwriter ‘s) subsequent writing gave it, the final result was, in the words of the Japanese Emperor, “not necessarily to our advantage”.
Churchill was 66 in 1940. Do you really think he should have engaged in actual combat? He did fight in the trenches in WW1, after the Gallipoli disaster, having had previous experience in four earlier conflicts. Being a statesman is also necessary for winning wars, would you not agree?
A competent military is necessary for winning wars.
A statesman puts the best interests of his country as his paramount purpose. That very rarely entails fighting wars from which his country cannot benefit.
“The supreme art of war is to subdue the enemy without fighting”. That is the point of the statesman.
And how do you suggest we could have subdued the Third Reich without fighting?
Hitler did have to be fought though, and Churchill was instrumental in ensuring that Britain did what it had to.
A lot of Churchill’s fighting was done against cowards like Neville Chamberlain.
Chamberlain was no coward. His machinations were done to bide his time in building up arms then to enter a European war, pretty much at whatever the cost, this being the whole purpose of the guarantee to Poland.
He did so purely because Britain would be marginalised within Europe and the North Atlantic postwar, were it not involved.
Sitting there while waiting for whoever out of the Germans and Russians would backstab each other first, then getting the USA involved following a deal to ship the UK’s remaining Empire booty to Fort Knox via Toronto, was probably very tactical, but it is not ‘defeating Hitler’.
He fought the Germans only on selected fronts, and much of the British plan seems to have involved fighting the Italians, who were clearly unready for war and would not have been, by their own accounts, until 1948.
I put myself through purgatory listening to Rory Stewart’s recent political autobiography.
Why?
Why did I buy it? I thought it might be interesting. Why did I not give up? Stubbornness? Hope he might show some self-awareness somewhere in the book? He doesn’t. I don’t know. I got to the end.
Based on your recommendation, I’ll probably buy it.
I see nothing untoward in seeing good policies and good people in more than one party. The main parties all contain people with widely ranging viewpoints.
We have two parties of government. The upside of being in one of them is that if your party is in government you have more of a chance to make a difference, to achieve something; you also realise that government requires compromise. If you are in one the other parties, the parties of protest, you can just criticise from the outside, but you may (party loyalty permitting) be able retain the purity of your ideals.
Uh huh. Wasn’t Donald Trump originally a Democrat?
Didn’t Winston Churchill do something like this?
US 1 – 0 UK
Again.
Rory Stewart is a typical UK media voice. That’s our biggest problem. Where are the voices of the Right in UK media discourse?
Yes, he’s the embodiment of ‘institutional man’ or ‘status quo man’. Every regime in history has them floating around, depends on them even.
One of the best moments since X became X – The VP engaging in midwit-meme jibes at Rory Stewart’s expense
I really really wanted to see how Vance would have dismantled Harris as she tried to defend nonsense against common sense and cackling all the while making a fool of herself. Vance strikes me as the quiet, intellectual advocate for the common man who will cite chapter and verse and note the views of this or that philosopher rather than engage in the pointless name calling and braggadocio that his boss does. There’s nothing that’s so unnerving as being beaten at your own game, and Vance’s ability to spar intellectually with the left and debate intellectual abstractions in an insightful way makes him able to actually reach out to the educated voters that Trump alienates with his circus side show antics.
Absolutely. Hopefully he will be the next president
I’m good with that. Hopefully Trump will expire tomorrow, and Vance can take over the top job immediately thereafter.