The Pioneer Briefing: Traffic light without a compass

Updated on 04/13/2022 08:12

“The Pioneer Briefing” – controversial, critical and humorous. Knowing what is being discussed politically. Today: the disorientation of the traffic lights.

Good morning, dear readers,

the world spirit ignores our Easter mood and, on the contrary, seems to be preparing a modern witches’ sabbath. Fighter planes rise on the horizon. Investors duck their heads on the stock market. And the government is trying to anesthetize the restless people with more and more promissory notes.

The already critical situation has worsened. It is characterized by persistently high pandemic risks, increasing inflationary pressure, an epoch-making energy price crisis, world food supplies that have become precarious and the military forces building up on our doorstep.

This means that the contract of the German traffic light coalition, which was concluded in the heaven of party politics, has no business basis. Alice was expelled from Wonderland – and is now wandering somewhere between Kyiv, Moscow and Berlin seeking protection. The old coordinates of SPD, FDP and greens offer her no orientation.

Also read: All current information on the war in Ukraine in the live ticker

If things were right in the political sphere of influence, the chancellor would have to immediately impose a holiday ban on his cabinet in this situation before all the dignitaries swarm out again in the direction of Mallorca or southern France. A government retreat would be appropriate – when, if not now. The politics of the next four years must be rethought and renegotiated between those involved. Here is a proposal for the agenda:

1. Financial planning. To date, all additional expenditure has been financed through new loans. Ironically, an FDP finance minister ignited the great debt rocket that will bring about the overload of the national product with mathematical precision.

resolution recommendation: The government needs to rearrange its financial priorities – and that means adjust them to the limited possibilities.

Germany: Inflation picks up speed

2. Inflation. The devaluation of money not only reduces purchasing power, but also leads to the expropriation of savers. At the same time, a policy of curbing inflation – as rightly expected from the ECB – slows down and impedes the chances of further economic growth.

resolution recommendation: In this situation, monetary and financial policy need to be coordinated. Otherwise Europe is threatened with stagflation, i.e. a longer period of economic standstill with simultaneous currency devaluation.

Recommended reading for Robert Habeck: The Stability and Growth Act, which Economics Minister Prof. Karl Schiller initiated in 1967, already contains the basic idea of ​​macroeconomic global control. A contemporary interpretation is now required, especially as far as the instruments are concerned.

3rd Ukraine War. So far, the federal government has provided military aid for 180 million euros. Estonia supplied military equipment worth more than 200 million euros. The US has invested over $3.5 billion so far. Here, too, the reorganization of German priorities is required.

resolution recommendation: The 100 billion for the armed forces, which are to be spent in the coming decades, are possibly better invested in the here and now. If the Ukraine can be maintained as a frontline state against Russia, this means a greater gain for European security than the completely overhauled Bundeswehr in 2050.

4. Agricultural turnaround. The old prioritization meant a reduction in the area used for agriculture and the designation of new nature reserves. Overall, according to the idea, agriculture should be slowed down, also in order to drive out the intensive and excessive use of animals and farmland.

The disadvantage: Against the background of a threatening world food crisis due to the extensive loss of agricultural production in Ukraine and the sanctioning of trade with the agricultural country Russia, this policy is life-threatening for millions of people.

resolution recommendation: Food safety first. world improvement later.

5. Growth. Government policy to date has underestimated what permanent support for other areas of life – from long-term short-time work benefits to fuel subsidies and risk-free corporate loans – means for a country’s growth forces. The compensation payments for all life risks of our time lead to the establishment of the status quo and the weakening of innovative power. That Germany of the 20th century is conserved, the future is missed.

Recommended decision: Less state, more market. That’s not neoliberal, just reasonable.

Conclusion: The traffic light coalition agreement comes from a different time and no longer offers orientation in this new world. Because the needle is spinning, the coalition’s compass has to be recalibrated – not out of desperation, but out of desire for a future that looks better than the present. Or to paraphrase Karl Jaspers:

“The hopelessness is already the anticipated defeat.”

I wish you a powerful start into the new day. I greet you warmly,

Her Gabor Steingart