The Duran Podcast - Germany trapped in long term economic decline

Episode Date: August 7, 2024

Germany trapped in long term economic decline

All right, Alexander, let's talk about the German economy. And if we are going to talk about the German economy, we have to talk about the general economic situation in the European Union, because Germany is the economic engine of the European Union. As Germany goes, so does the European Union. And right now, the German economy is going down. It is going down very quickly. and that's not good news for Germany, not good news for Ola Schultz, and not good news for the European Union. What is going on in Germany?

That is exactly what's happening. Now, of course, bear in mind, I was in Germany a few weeks ago, and, you know, it was noticeable that people were feeling the economic malaise. It was something that people were bringing up. They were bringing up the fact that there'd been this enormous inflation directly after the events in Ukraine and the stopping of the Russian gas. People were not making the connection, by the way,

with the stopping of the Russian gas, and they weren't yet doing so, but they were experiencing economic decline, the economic decline of Germany. And it was striking how confidence seems to be ebbing even amongst the German people which has always historically, by the way, being very high.

I mean, the Germans have always, people in Germany have always tended to think that their economy is doing really well. Germany knows how to do things. That others should copy what Germany does because the Germans do it well and better than others. You've got a lot less of that this time. But anyway, suffice to say,

over the last couple of weeks, I noticed a whole crop of articles starting to appear in the Financial Times, in various other journals, telling us actually, you know, Germany is not really doing so badly. It's regaining its competitiveness. Its competitiveness level is back to what it was in 2018, that things are starting to look up. And then, of course, the PMI data and the economic figures

came out and they show PMI collapsing I mean it's in the low 40s for industry industrial production continuing to fall

inflation interestingly rising again and it's not actually so surprising because the steady stable supply of cheap energy

from Russia has stopped the government still has a green coalition, a partner. The Greens are still in the government. They still have ideas about how energy should be managed in Germany. You know, they've closed down on the nuclear power stations, for example. So energy prices are rising in Germany. Energy costs are rising.

Inflation is rising. And it turns out that Germany is again falling back into recession. So the entire story of the Schultz government from the very first day of its creation has been of economic failure and of economic decline. And there's been, by the way, an absolutely excoriating article, not article, sorry, speech about Schultz by none other than Victor Orban, who has been talking about how, you know, the, Chancellor of Germany, who, as he was careful to say, he's not a fool, invariably ends up doing those things which the US tells him to do. And the result is a disaster for Germany,

a steady accelerating process of deindustrialisation and economic decline in Germany. And of course, this is now translating into the overall problems of the Eurozone. again there was a lot, huge attempt to try to talk up the overall figures for the Eurozone. I think it managed, was it, 0.8% growth in the first half of this year. I mean, dismal growth by any measure. But the reality is, to the extent that there's been any growth, it has come from the Mediterranean. countries, especially Spain for some reason, that the growth figures have been a bit better there. I don't, by the way, believe that there's any long-term reality to this either.

The Eurozone core, which is Germany and the countries around it, the German bloc, if you like, is doing badly, it continues to sag. and there's no prospect of this changing and no real way, I think, that it can change. Suffice to say, that the major suggestion made by people outside Germany is that Germany abolish its break on deficit financing, starts to do what the US, Britain, France, Italy. all the other countries do, which is borrow and use all that borrowing to reflate its economy

in that kind of way. The experience has been, if you do that, it works for a while, you know, may give you five or ten years of growth, but ultimately it catches up with you in the end, and we see that growth in the very heavily indebted countries now is not very good, and productivity growth in those countries is very poor. it must be said, productivity growth in Germany also at the moment is going backwards. So I don't really see a long-term way out of this. So what does Germany do? What is the EU do? I mean, they've cut off, they've cut off their only way out of this, which is cheap Russian gas, cheap Russian oil. And actually, EU is even going harder on.

on Hungary and Slovakia. They're not even allowing Slovakia now to transit oil by Ukraine. And, you know, Ukraine blocked the old transit. But everyone now knows that it was actually the EU that is behind this blocking of the oil to Hungary and Slovakia. So I mean, they're going in the exact opposite direction instead of trying to at least open up some channels of diplomacy and discussion and business with Russia in order to try and prevent further de-industrialization and recession, they're going harder against the trade with Russia. So what, there's no way out of this, but yeah, the oil transit story to Hungary and Slovakia is directly connected to what we've just been talking about and the problems in Germany, because of course, you're

absolutely correct. The Hungarian foreign ministry has said that the decision to stop the oil flows from Russia via Ukraine to Hungary and Slovakia was not made in Kiev. It was made in Brussels. I mean, the Hungarians have actually said that. And notice that no one is denying it. I mean, the EU themselves are not denying it. And of course, the people who make the decisions in Brussels never make them without first consulting with Berlin. So Berlin is continuing the policies of cutting off Russian oil and gas when it can to Europe. Even if it does so at the price of in effect sanctioning other EU countries, because in effect what's just happened is that Hungary and Slovakia have just been sanctioned by the EU,

the EU has sanctioned two of its own member states. because this is what this amounts to. But what the EU centre, which of course includes Berlin, in fact, Berlin is at its core, is persisting in doing, is that it's cutting Germany, which is it's ultimately Germany that we're talking about.

If oil doesn't flow into Hungary and oil doesn't flow into Slovakia, then realistically it can't go to Germany either. It's cutting off Germany. Germany from its economic hinterland, which ultimately was Russia. So inevitably, so long as this policy is persisted in, Germany and the EU will continue to go into decline. Now, there doesn't seem to be any ability or understanding or willingness in Berlin to change

this policy. I get the sense that the entire political class is united around it. The opponents of this policy are located either on the left within Saravagenex group or on the right within the IFTA. But on the best possible electoral arithmetic, neither of these parties either separately or in combination could ever form a majority in. the German parliament, the most likely new governing party in Germany after the elections, which are due to take place next year, is the CDU. The CDU will return to power, led by Friedrich Mertz, and they're not going to change the policy in any way. I mean, I see no sign of any willingness on that part to change the policy at all. So Germany is now trapped in long-term

decline. It's a long-term decline from a very, very high level, but it's going to accelerate because what's also become clear, and it's something that we have been talking about many, many times in many, many programs that we've been doing on the Duran. Cheap Russian gas was not only essential in keeping the German economy functioning and competitive, but that it also concealed many of the problems that have been accumulating in Germany over a very, very long time, instead of the German leadership using the fact that they had cheap energy to provide them space, political space to carry out major reconstruction and reforms within Germany, to address the many problems that existed in Germany.

they were content to let things continue as they were and the result is that Germany today is exposed as having many systemic problems in its economy which is political class show no understanding of or willingness to fix you're getting more and more reports by the way and you know again people are I know people who are in the mid-Helstrand these you know family-run businesses

that have been the core of the German economy. More and more of them apparently are closing down or going bankrupt. Again, a shattering thing to happen in a place like Germany. The pressures are intensifying all the time. Yeah, but that's been the plan all along. I mean, Germany, okay, so the EU consults with Germany when they make their decisions with regards to now cutting off Hungary and Slovakia from cheap, reliable Russian oil that they got an exemption for, to begin with.

The EU promised an exemption, gave them an exemption. So, I mean, the EU is going back on its word, going back on its deal. What a surprise. Exactly. Yeah, siding with a country that's not in the EU against two member states. What a surprise there as well. But Germany has to consult with the United States. So, I mean, that's the chain of command.

right? So the EU is going to consult with Germany before making any decisions with Hungary's Lachia, but Germany is also going to get the orders from the United States. I mean, this is deliberate. The plan all along was to take apart Germany, or at least to definitely sever Germany's connection to Russia and Germany's economic prosperity. That's done. That's over with now. I imagine Germany is just going to be an economy that's driven by weapons production. I think that's going probably be the main driver of the economy going forward. I don't know, and other services that they're going to be doing. The rest of the European Union, tourism, I mean, tourism, stuff like that.

I can't think of anything else. There's chip manufacturing, some production in Italy. Maloney's trying to do something with China, but I imagine that eventually she's going to get blocked by the United States as well. I don't think that her trip to China is going to make any difference. The U.S. will tell her to knock it off, and she will, and she'll do whatever her master's told her to do. Keep Germany down. I mean, this has been the NATO motto. Keep Russia out, keep Germany down. And effectively, the United States takes over. The global. list in the United States. They're going to be running Europe. I don't think this is good for the

United States, to be honest, because you don't want to have to take care of a broken bankrupt Europe or fund, a broken bankrupt Europe, but that's what the American people are effectively getting, a broken bankrupt Europe that they're going to be taken care of. And I imagine the European Union, they're thinking the weaker the member states are, the better for us. We can concentrate more power to the center. So I guess that's the, that's, that's, that's, that's, the EU's thinking on all of this when they're looking at Germany and France and the core members disintegrating. Well, this is exactly. There's a lot of points here. Let's start with the last one about the EU centre, the EU centre. Ever since the EU centre started to becoming particularly

strong, ever since the euro, for example, was established, but even going a little before then, what you've seen is a steady decline in economic growth in European growth in Europe. Europe. I mean, it's often difficult to remember, but, you know, Italy, despite its many problems and its historically high inflation, nonetheless had very, very high growth rates in the 50s, 60s, even the 70s. Briefly, in the 80s, it surpassed Britain in GDP. I mean, the so-called surpassed, which has made a huge, you know, impact, as I remember at the time. And then, of course, what's happened is the Europe was established, the EU centre. got stronger, the member states got weaker, and as the member states got weaker, so did the

economies. And of course, the fact that these countries don't have their own currencies means that there is no market mechanism for self-correction. So, you know, Italy runs lots of debts. It has problems with budget and other deficits. Normally, if it was running its own currency, that would make the Italian lira decline. That would boost competitiveness for Italy. That would benefit Italian industry. And Italy is an important export economy. And things would ultimately write themselves. That was how it used to work. It can't do that anymore. And of course, the longer that this process continues, the greater the structural problems. I mean, if you ended the euro now and it reintroduced currencies there would be a period I don't think a very

long period but there would be a significant period a year or so a profound economic chaos and great and and extreme recessions before things began to readjust themselves so the EU centre has become stronger and stronger even and because the member states have been becoming weaker and weaker. And of course, the weaker the member states become, the stronger the EU centre becomes relative to them. And you could see how it is behaving now. I mean, as you've correctly said,

it gave the Hungary and Slovakia the exemption. The exemption was never worth the paper it was written on. I think Orban, frankly, was wrong to agree to all those sanctions, because he should have known that if he did agree to those sanctions in return for these exemptions, the fact is that the exemption would not be honoured. And that's exactly what we've seen. We've seen how the European Union simply goes round in an exemption by getting the Ukrainians to block the oil flows. and this is the pattern. And of course, Germany itself, which for a certain period of time,

appeared to be the beneficiary of this because it was the core state, you know, at the very centre and, you know, the other parts of Europe were the periphery. It's now also experiencing the same problems as all the other EU states are. It's also finding that the growing power of the centre,

the centre's ability to impose policies on the member states, like confrontation with Russia and all the rest, are starting to impact directly upon its economic interests. But the centre now is so strong that it's very, very difficult, even for Germany, even if, if it had the will to do so, to break away. And psychologically, for Germany to do that, is even more difficult still.

And of course, the centre, as you absolutely rightly say, is keen on aligning itself with the United States. But there is something else to understand about the policies of the EU centre. And here we have, if you like, a commonality of interest between the Brussels bureaucracy and Washington, because you're absolutely correct in what you said. It is not in the interest of the United States

to have a broken, bankrupt Europe. I mean, a weak Europe, objectively, is overall, is a drag on American power. This is something that American leaders in the 1940s and 1950s, 1950s understood very, very well, which is why they worked very, very hard after the Second World War to reconstruct Europe, you know, martial aid and all of that. Now, of course, they're doing the reverse. And the reason they're doing that reverse is because both Brussels and Washington at some point came to understand that German prostitution, that German prostitution,

prosperity and German strength were only really possible as a result of this connection with Russia. And Russia being the adversary, Moscow being the one major capital on the Western Eurasian landmass that is no longer subject to the control either of the EU centre or. of Washington. That was absolute anatom. So sever that link, break it completely even at the price

of sacrificing Germany's economic future. And because if you don't do that, then the power of the centre over Germany and the other EU

states cannot be as strong as it has basically now become. The EU centre today is stronger than it has ever been at any point since the European community, the European economic community was founded by the Treaty of Rome in 1960. It has been getting stronger and stronger all the time and the policies it is pursuing of confrontation with Russia are making it stronger still. Of course, stronger, the centre is strong. The centre is stronger, Europe, the continent, the people who live there, the nation states, they're getting weaker. What does that benefit the EU then?

I mean, that's the ultimate problem with the European Union. The member states are much weaker, much worse off. Five years ago, there's no comparison. You go to Europe, you walk around the streets of what I know, Greece, Cyprus. Five years ago, much better than today. It's obvious. It's glaringly obvious. But what is Europe, the European Union, gained by all of this?

I mean, eventually it's a table that's losing its legs. Yes, it is a table that's losing its legs. Yeah, it gets stronger. But it's going to collapse. Yeah. What good are you with weak member states? Yes. If you're the European Commission, if you work in the European Commission,

then you have the enormous psychological satisfaction of being at the centre of power over the whole of the European Union, which is not to be discounted. The exercise of power is tremendously tempting, the ability to make and break nations, to make and break governments, to impose policies on them. governments especially entities when they're like the entities of the European Union are I mean they don't give up power easily and their instinct anyway always is to acquire more and more of it so if you're talking about you know if you're thinking about things in terms of power then of course for the people who work in Brussels this is this is a this is a

is good. The fact that people in Germany and Italy and France and Greece and Spain are poorer than they were, well, this isn't something that worries them so much. That's the first thing. The other is, and this is an important thing to always remember, is that these people who make these decisions are not individually affected by them materially. They're doing very well, they've paid enormous salaries, they have enormous benefits, they can look forward to further promotion within the system, which has infinite ability to provide patronage and promotion. They don't think of themselves, they don't see themselves as leaders of a declining empire. They are on the contrary, you know, cocooned away in this bubble.

where they feel themselves getting stronger and wealthier and where they're all, you know, spending their time telling each other how clever and great they are. And from that point of view, you know, they're doing very well. And of course they go to Washington where they're taken very seriously. Ursula von der Leyen meets all the great people in Washington, all of that. And they can still, because the European Europe is still, you know, important part of the world, they're still able to travel around the world, imagining to themselves that the European Union is taken seriously in places like,

you know, Kuala Lumpur or Singapore or Brasilia or wherever. And, you know, they come in, you know, with large, you know, trains, entourage and all of the rest. And, you know, they still have the sense. that, you know, they're walking on clouds and, you know, acting like gods. So from their point of view, this isn't bad. Until the people get more and more. Well, until the whole thing. And that's, yeah, I think they realize one thing, the European Union, the center,

it's one thing that they have a long way to go before the people actually really get upset. I think we're way, way far, far off from that. Well, indeed. They know it. They know it, exactly. and they can do it and they can play this game and they will do it. And of course, you know, there are also some people who are very fanatical and very fervid, people from the Baltic states, for example, who obsessed with one particular issue,

a mono issue in effect, which is to conflict with Russia. That's the only thing that they're concerned about. And from their point of view, the EU serves its purpose if it fulfills it. So that means that the EU has its loyal spear leaders there. Notice how many EU officials now come from the Baltic states, disproportionate number given the small populations of these places. It's not only the Baltic states just to finish off the video. There are a lot of people, everyday citizens that are very propagandized by the European Union.

For many people, all they know is the European. Union. I mean, I've met people in Cyprus who have told me directly. If the European Union wants to come into my bank and take my money again, so be it. I have no problem with it as long as I can be called European. There are people with that line of thinking. As long as you can call me European, I have no problem with the EU taking whatever they need to take from me, even if it's my own person. Because, I mean, this is the level of propaganda that a lot of people have been subjected to over the past two decades. Yes, because you see, they've managed the incredible and trick of conflating the European Union with Europe. Europe, the civilization, the continent, with all its history

and all its culture, and somehow they managed to persuade people that the European Union is somehow its political embodiment, whereas in fact it's the parasite that's killing the host. All right, we will leave it there. The durand.orgas.com. We are on Rumble Odyssey, Bitchie, Telegram, Rock Finn, and TwitterX, and go to the Duran shop. Pick up some merch like this new t-shirt that I'm wearing today or some limited edition merch like the t-shirt that Alexander is wearing today. This video, the link is in the description box down below. Take care.