The Duran Podcast - German Deindustrialization Accelerates

Episode Date: September 12, 2023

German Deindustrialization Accelerates

All right, Alexander, let's talk about the situation in Germany. And maybe we want to talk about Ola Schultz and his jogging accident and the eye patch. But more importantly, we have to talk about the German economy and what's going on there. So let's discuss the deindustrialization, the continuing deindustrialization of Germany. Well, it's absolutely fascinating to see how this has now become a mainstream issue. It's been talked about pretty much everywhere. Eurozone growth has now fallen to 0.6% this year, which, I mean, it's stagnation. I mean, bear in mind that we still have a high inflation situation in much of the Eurozone.

So we're talking about a stagnation situation. But, of course, Germany itself is now clearly in recession. and it's not just a recession, a normal recession, which is a product of the business cycle. This is increasingly looking and it's increasingly perceived within Germany as part of a long-term process where Germany's economic model, as it has been developed over the last, well, 60, 70 years, starts to completely break down. and, well, everybody can look at the statistics. So far, they've managed to keep GDP growth. They've kept GDP growth, well, GDP levels look reasonably strong,

but this has only been done by an enormous amount of extra spending. They're starting to hit, apparently, on the constitutional buffers, that they're, you know, of the extent to which they can run deficits. and there are good reasons, by the way, why Germany doesn't like to run budget deficits, because budget deficits over time tend to undermine a trade surplus and the entire German economic system

is based upon running a trade surplus. So the Germans don't generally like to run a budget deficit, but increasingly they're beginning to push on the outer limits of that. Debt levels are rising within Germany. They can't, in other words, sustain this for very, very much longer.

They're coming under pressure from the EU, which is demanding more money all the time, and the Germans are not happy about the fact that the EU is demanding money and they're basically saying no, at least at the moment. And at the same time,

they're seeing more and more of their industrial manufacturers reduce output, cut back on output, and start thinking about disinvesting in Germany and reopening production in other places. For the moment, that tends to be concentrated in the bigger producers in the chemical industry and such places. But if it starts to work its way through into the sort of middle-level companies, which it's likely that it will, many of which are now coming under severe pressures. Well, then, of course,

we're going to see this process of deindustrialization accelerate and gather pace. And the problem Germany has is that there aren't any obvious solutions to this. Cheap energy from Russia is gone forever. No prospect of that.

They close down their nuclear power stations. Those aren't going to be reopened. There's talk about reopening coal, coal mines, to some extent. that is happening, but that's not a modern energy product anyway. And they've now got a structural cost problem at a time when all the indications are that with China itself slowing, China's going to be looking to export more, or rather to export more aggressively in order to sustain its own economic growth

and of course it is in direct competition with Germany in many industrial fields including increasingly now car production where China has just overtaken Germany and is well ahead of Germany in electric cars and all that kind of thing Is it a stretch to say that all of this was done for Ukraine?

It's across the board collapse It's Project Ukraine that did this? It is absolutely Project Ukraine that did this. And it's one of the most astonishing things. I don't know of any historical precedent for this, where a country, one country, Germany in this case, has jeopardized its entire economic future on behalf of another country, Ukraine, at the behest of still another country, which is the United States, which, let's not forget, is also, in many respects, Germany's economic competitor.

I mean, it's his partner, but it's also its competitor. I've never known this happened before. And, you know, we've come back to Olaf Schultz and his eye patch and all of this. I have to say, I mean, to me, he's looking as if he's increasingly under stress. I mean, he says he's had a jogging accident. I'm not going to argue with that.

But, you know, why go around drawing attention to the fact that, you know, you have a, having to wear an eye patch and all that kind of thing. Why tweet it in that kind of fashion? It seems to me the sort of thing that, you know, if you're a leader, you've had an injury of that kind, you publish a short photo of yourself showing that you have had an injury, you then disappear from view for a few days until you're better. Schultz seems to be doing the opposite.

And I mean, he looks piratical in a way that I can't imagine people in Germany. I'm particularly pleased about. And to me, to be honest, it looks like he is under stress. It's the kind of thing that people who are under stress want to do. They want to show, look, I'm still here, I'm still in charge. I might look like a pirate. I might actually be a pirate. But here I am.

I'm not gone. I mean, that's how it looks to me. And, of course, he's coming under criticism. He's now being booed and jeered. The eye of death is rising in the pulse. but it's quite clear that he has no real plan about what to do. And his team. I mean, you know, we focus it on Schultz, but there's Berbach and there's Habek.

And Berbach gets a lot of the attention, rightly so. I mean, she says a lot of dumb things, but the architect of this collapse, in my opinion, is Habek. Oh, absolutely. I mean, he's the, I mean, to my mind, he's the ultimate true leader of Germany at the moment. I mean, Schultz may be there, but ultimately, he always ends up agreeing with whatever Harbeck wants. That's been the way it's basically played out. So Harbeck wants to close the nuclear power stations. The nuclear power stations get closed.

Harbeck wants to end all oil and gas imports from Russia, so, you know, they end. Schultz has repeatedly said at times that, you know, we're not prepared to do this. we're not prepared to agree to supply tanks or infantry fighting vehicles to Ukraine. Harbeck wants it to happen and they're supplied. So, I mean, Harbeck is by far the strongest figure within this government. He's coming in for a lot of criticism, but ultimately it is he who always wins out in every internal political and bureaucratic battle that takes place within the coalition government. And I get the sense that a lot of people in the SPD are unhappy about this,

but they don't seem to have a clear way of getting out of this either. And besides, so much damage has now been done, how do you turn it round? You can't just restart Nord Stream. I mean, there's one of, I think it's the Minister President of Saxony, one of the German states. He suggested that we see about doing repairs to that part of, that, pipe of Nord Stream 1 that might still be working. I mean, that's not going to happen.

And the corrosion is apparently going to make repairs of that kind impossible before long. So Nord Stream 1 is probably, you know, it can't be turned back on. How do you, how do you restore that relationship with the Russians? Why would the Russians agree to it being restored? No, I mean, you know, Germany has taken the decision, a terrible decision, to be one of the countries in the front, escalating the conflict with Russia. I mean, it would be a different picture if they, a different story if they took a line, say, similar to Austria, where they've gone along with the sanctions to a certain extent. But for the most part, they've either kept quiet or every now and then they've come out with statements signaling for, for, for, for, peace or saying we need to negotiate or what the Austrian foreign minister said the other day,

which is you can't cancel Russia. We're going to have to work with Russia. We need to find a solution. It would have been better if they followed Austria's line. But instead, they followed Poland's line or Latvia, Estonia, Lithuania's line. And then they went full in, let for tanks and all. And pretty soon, Taurus long-range missiles, that's coming as well. So, you know, we say this every video I ask you this question when we talk about Germany and the position that they're in. Can Germany be saved?

Well, it's a big country and, you know, countries just don't just disappear. I mean, the problem with Germany is not that it's going to collapse tomorrow or the day after tomorrow or next year or the year after. It is that it will go into a long decline like Britain has done. I mean, Britain in the 50s and 60s was still a major manufacturing power. It was one of the leading economies of the world. I don't think many people look at the world. I don't think many people look at at Britain today would say that it still was, despite, you know, the goose-up GDP figures that we continue to publish here. And I think Germany is going to go the same way. I mean, people are already talking about Germany as the sick man of Europe. And if that narrative gains hold, and I don't see how it can avoid gaining hold, that is going to have a major impact on Germany

itself on the way the Germans perceive themselves on German society generally. And as you know, if you've lived in Europe, in Britain, if you find yourself in a narrative of that kind of decline, it's all but impossible to break out. So Germany will gradually think. and of course the Eurozone which is built around it will sink with him just as the British Commonwealth has done I mean remember that

I mean you remember once upon the time the British Commonwealth that we always always used to talk about it it's still there but who pays any attention to it today and I think Britain was a lot more powerful than Germany Oh absolutely

Of course it was so Well of course it was I mean it may it'll be a much quicker Much quicker decline I'm just say maybe you know much quicker decline Much quicker decline much quicker decline and you already see it. I mean, Germany's going through, has gone through in a year, what it took, say, Britain 10.

I mean, but bear in mind, I mean, that, you know, Germany's problems are actually pretty deep-seated, and they predate this crisis. We used to talk about this a lot while Merkel was still there, that Merkel was a force for immobilism, that she was keeping things as they were, but wasn't really charting a proper future course for Germany. And you could see that.

Now, a lot of people talk about the fact that, you know, Germany hasn't, that it's not innovated, that it's not been successful, the new technologies and things of that kind. What people fail to realize is that Germany's economy, when Merkel left it, is actually less diversified, became less diversified than it used to be. I mean, think of Germany once, upon the time. I don't want to specify

the time, but it was, you know, the world leader in rocket, rocketry, for example. It was one of the pioneers in computers. It actually produced this in the 30s and 40s, one of the first computers. Here is, you know, a world leader in chemistry, all kinds of

technologies that, in which today it is completely absent. It became very focused on narrow sectors, involving machine tools and those kind of products

and certain types of light consumer goods and also the motor vehicles which it became over-concentrated in all of that. So if you have that kind of problem you need to keep that base running

and then you need to think strategically beyond that in order to adjust and to try to already defeat that inertia, which is causing your economy to over-specialise. And by the way, I also forgot Germany was a major leader in the past in aerospace. I mean, you know, Germany pioneered civil aircraft in the interwar years. Just saying, so instead of Germany doing that, retaining the strengths, the residual strengths,

that he'd still had, undertaking an deep look at itself, saying, why have we become over-concentrated in too few sectors? Why are we, in effect, trading water? What do we need to do to start moving forward? What they did was the opposite. They've kicked the remaining foundations

of what's left of German economic strength away from underneath them. And now it's far more difficult to change direction when you're going down in that way than it would have been if, say, during the long Merkel years, Germany had took a hard look at itself

and had decided to change course. Yeah, they went to war with their commodity, supplier. Well, their commodity supplier. They went to war with their main commodity supplier and they pinned their hopes on some green dream that no one quite understands what exactly

it really is. Well, absolutely. Some ideology, some religion. Yes, absolutely. And by the way, also, you know, what could have been a key scientific and technological and industrial partner. I mean, don't forget that because

you know, the Russians are still strong. in many of these technologies where the Germans used to be strong. And you can't conceivably see that there might have been a potential matchup there, which might have helped Germany turn around. I'm not saying this out of nothing, by the way. Germans used to tell me this. I mean, I remember I had spoken with people that. I know a bit about Germany.

But they didn't do that. And as you said, they sacrificed. their relationship with their key commodity supplier, and they pursued the green dream. Even though, again, important to stress, the great majority of Germans are not Greens. Now, it is a fact which tends to be overlooked. They're very strategically placed within the political system. They're strong in some of the West German states. They're pretty much non-existent in the former East German.

But a critical mass of Germans have never actually brought into this green dream. But they've been, in effect, hostages within the runaway train, which is what the green dream amounts to. It's a religion. All right. We'll leave it there. The durand.com. We are on Rumble odyssey. Telegram, bitch shoots, Rockfin, and Twitter, and go to the Duran shop, 10% off.

code good day take care