Each nation has its collective stories. Historical experiences are saved in this way so that they clot to a solid core. Sometimes they process national trauma, sometimes successes, sometimes triumphant moments. In doing so, they influence social values and political action, formulate commandments and taboos. National narrative contain maxims for what you do and what is not, what is good and what is bad, who you are as a nation and who you want to be.
They are a kind of social operating system. A program on the basis of which concrete application cases run – or crash.
is a professor of economic policy journalism at the Technical University of Dortmund. Previously, the doctoral student worked as a vice editor of the manager magazine. Müller is the author of numerous books on economic and monetary policy issues. For the manager magazine, he gives a pointed view of the most important business events every week and writes the column “magical square”.
What are the stories of the Germans? In any case, economy plays an important role in this. The first German nation state was created late in European comparison, only in 1871, namely from the German Customs Association – the industrialization of the backward small states required larger structures. The following promotion to the first division of the global economy at the end of the 19th century, supported by industry and engineering, is still present in the collective self -demand.
Later, West Germany, founded on the ruins of the moral system failure of the Nazi regime, understood itself as a community of employment. The D-Mark became an identity anchor. The fact that the “economic miracle” was connected with the new currency helped cover the trauma of the 1920s to the 1920s-hyperinflation, depression, Nazi rule, war, flight and displacement-and to feel something like normality. “D-Mark patriotism”, the belief in the unconditional primacy of a solid money and financial policy, became a supporting pillar of the Federal Republican self-image.
When finances get out of control
After the D-Mark rose in the euro in 1999 and the responsibility for the money was transferred to the European level, only the financial policy remained as an economic policy focus of the national self-assurance. That Germany the “debt brake” introduced, the “black zero” worshiped, held up the European “stability and growth pact” and the principle of the “Swabian housewife” (Angela Merkel) To the guideline of the state finance, this self -image arose. And it was popular. When finances get out of control, everything gets out of control – that was the curved experience of the first half of the 20th century.
Also noted: France Has drawn completely different conclusions from history, such as the economists Markus Brunnermeier, Harold James and Jean-Pierre Landau a few years ago In a eye -opening book
have explained. There was too economical households as the cause of weak defense ability – and thus for military defeats (against Germany). Accordingly, French politics should primarily project national strengths, if necessary on a pump.
The history of the Rhine has left the story opposite: Germany no longer wants to be a country of Fiscal Hallodris, France is no longer on the defensive because of self-prescribed financial orthodoxy. This is also why the two countries have been so difficult for a long time to get a common denominator in the euro financial policy, argue Brunnermeier & Co.
The eleventh commandment of the fiscal Ayatollahs
As if there was an eleventh bid – you shouldn’t make any debt! -, Germany is calibrated to economical budgetary policy. Accordingly, many now have a hard time with the sudden swivel of the presumably next chancellor Friedrich Merz (CDU). In fact, the debt brake for military expenditure and to put on a 500-billion-euro special pot for infrastructure (pay attention to the advice in the Bundestag on Thursday), breaks with German traditions and identity-creating stories, especially on the conservative side of the spectrum.
It is stylistically difficult that Merz talked to the election campaign very differently in the election campaign and has repeatedly spoken out against the flexibility of the debt brake as an opposition leader – to put it carefully. On the other hand: if he had promoted a radical departure from conservative economic policy traditions, Merz would have sparked so many in the nuclear electorate and his own party that he would probably have lost the election.
You can also see it like this: the Merz turn reveals a mixture of realism, power to power and dose risk joy. Properties that I want from a Chancellor, especially in times like this. He won’t be easy to convince the conservative-liberal camp. The usual fiscal Aayatollahs are heard again. It will be a first leadership test for Merz.
Risks, side effects
Economic stories that amount to strict beliefs are difficult. And actually dangerous. Because they unnecessarily limit the space of political and economic possibilities and tempt them to risky strategies. This also applies to the left -wing counter -story, according to which debt and deficits are largely unproblematic and necessary for economic recovery and social pacification.
Such reductions are misleading because they hide risks and side effects. To take a look at side effects is essential for a reasonable consideration.
For example: If the state saves, but the public infrastructure, the education system and defense ability suffer, the argument is no longer true of the generation equity of the low debts. The other way around: When rising debts drive the interest at the height, the state displaces private economic activity and brings highly indebted companies and states into trouble. The politically popular black and white property scheme does not meet the complexity of the problem and the imponderables that are adopted from it for the future.
Or we send Putin the keys …
My position on the debt brake I explained at this point last summer. Short version: Actually, balanced households are a reasonable thing across the normal economic cycle. In the case of decent tax revenue, enough money flows with which defense and infrastructure can also be paid.
Unfortunately, these are not normal times. If we don’t upgrade massively now, the freedom of Europeans will not survive the next decade. Something has to happen now, and a lot.
The uncomfortable truth is: without Germany Europe will not become capable of defending
. Because of the size of the country and its economy, European defense mainly hangs on us. If we don’t act determined now, we can do Vladimir Putin and Donald Trump send the keys for the Chancellery.
The question of financing remains. Making debt for defense is necessary. One Current study by the Kiel Institute for World Economy
has calculated using historical examples that quick upgrade is possible. Especially when the additional military spending are debt financed – because otherwise it will be too slow and/or the economy would be choked.
Kohl, the debt chancellor
The good news is: we can afford it. The state debt is just over 60 percent of gross domestic product (GDP) – much lower than in all other major economies, where 100 percent are now the norm. The German state enjoys the highest credit rating – solvency level: AAA. Because of the good reputation, the interest is low.
It is hardly surprising that the return on German government bonds initially rose by half a percentage point-to 2.8 percent-to 2.8 percent when the Merz turn is announced. It was a successful surprise. If the first impulse has been let, the interest should normalize.
Exceptional times require extraordinary strategies. For Helmut Kohl, this was no question in 1990. In the 80s, the Christian Democrat – in the sense of German fiscalorbodoxy – ruled with stable debt rates and put a kind of informal debt brake into the factory. In the course of reunification, the state’s liabilities increased by half over the 90s-from 40 to 60 percent. And the current turn of the epoch is a lot more difficult than that from 1990.
Can it be a little less too?
Incidentally, the abolition of the debt brake for military expenditure does not oblige the state to go into debt over the ears. Nobody prevents future governments from paying a large part of the ongoing income for bubbling tax sources. But it is good to quickly create scope in potentially unlimited height.
The same applies to the 500 billion infrastructure package-always set the case that there are majorities in the Bundestag for both measures. The government is not forced to spend all the money. For example, if the economy runs hot or the interest rates excessively, investments can be put up or financed from tax revenue. The “Economic Fund of Germany”, which was launched during the financial crisis with a volume of 115 billion euros to help bankruptcy -threatened companies from the credit clamp, was far from being exploited – and soon closed when it turned out that the economy did not need the money.
In the future, it will again be about financial policy instead of rigid constitutional rules. Parliament has the last word, not the top judges in Karlsruhe. So it should be in a democracy.
Financial policy should not captivate themselves through traditional beliefs. National narratives are important because they create common identity. But you should not prevent a society from facing the challenges of the present.
The most important economic appointments of the upcoming week
Monday
Wiesbaden – economic motors a. D.- New figures from the German export of the Federal Statistical Office and from the orders in mechanical and plant engineering from the VDMA association.
Report season I – Biontech business figures, Traton.
Tuesday
Nuuk – America or Europe? – Parliamentary election in Greenland. Since US President Trump wants to have the island belonging to Denmark, the huge but human area has been the focus of world politics.
Wolfsburg – How on? – Annual press conference from Volkswagen. Europe’s largest car manufacturer is looking for a way into the future.
Report season II – business figures from Henkel, GEA, LEGO.
Wednesday
Washington-Trumppflation-America’s statisticians publish the number of inflation for February, the first month of the second Trump Presidency.
Frankfurt – Madame Euro and its observers – The European Central Bank invites you to the annual conference “The Ecb and Its Watchers”. The opening speech keeps ECB President Christine Lagarde.
Reporting season III – business figures of Rheinmetall, Porsche, Puma, Brenntag.
Thursday
Berlin – Test for Merz – First reading of the Black Red Financial Package for Defense and Infrastructure in the Old Bundestag, which comes together again to form two special sessions. The second is scheduled to take place on March 18.
Reporting season IV – Business figures from FMC, Hannover Rück, Hugo Boss, HelloFresh, Fraport, Grenke, Hella, Enel, Docmorris, Generali, Swiss Re, Deliveroo.
Friday
Wiesbaden – inflation in detail – The Federal Statistical Office provides details of the price development in February.
Report season V – business figures from Daimler Truck, Bechtle, de Longhi, Swiss Life.