As an observant Stern journalist put it, German know-it-all Finance Minister Peer Steinbrück can lash out at the American failings that have lead to the current financial market crisis all he wants to, what he and other vocal German critiques of late are really doing is covering up their own grave shortfalls. Germany is sliding into a recession. And whether the Germans will be in good company or not, the federal government here is doing absolutely nothing about it. The United States government is at least taking action, the reporter writes.

Complaining about the American “exorbitant fixation on profit” and “unshakable belief in the absolute freedom within the marketplace”, Steinbrück (SPD), much like his boss Chancellor Angela Merkel (CDU), have an easy game of it now when it comes to pushing the blame across the pond. The shock and outrage about the sudden financial market meltdown felt by everyone on both sides of the Atlantic has practically cleared the field of anyone who might feel inclined to address the complicated process that has led to this situation in an objective, rational manner, much less “defend” what has happened.  

But the real reason for the high-volume posturing in Germany is another: Germany’s so-called grand coalition has absolutely no solution for the coming German recession and makes no illusions about having one. As aptly put with the title of a lead article in Germany’s Zeit newspaper several weeks back: Germany is on Autopilot. The final days of this marriage of convenience have begun, with new elections in Germany to take place in less than a year from now, provided the coalition government holds that long, and despite the great promise many Germans held for a government with a massive majority that could in theory pass any great measures and legislation it might want to, precious little has changed.

And now, with a real crisis presumably right around the corner, even less can be expected. As so often in the past, economic policy in the land of exports primarily consists of following the leader or, to be more exact, being pulled by the economic locomotive which has been, to a large degree, foreign consumers up until now  (and not a few these have been of the American kind). Taking the initiative, taking action, this has not been the German way. Not even now when taking action for a coalition government of this size would be easy – the coalition government most likely to come about next year will probably consist of a complicated mix of smaller parties which will only make taking decisive action all the more difficult.

So complain all you want, Minisiter Steinbrück and company. If that makes you feel better, I mean. But take a look in the cockpit every once in a while to see that your autopilot hasn’t fall asleep at the controls while you’re at it.

Come visit me at Observing Hermann…

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