Germany Flushes Itself Down the Toilet

Germany is the economic powerhouse of Europe. Economically speaking, when Germany sneezes, Europe catches cold.

At the moment Germany seems to be coughing and sniffling a lot, yet not much attention is being paid to its sickness internationally. To me it’s an important issue, but maybe it’s being eclipsed by the Danse Macabre in Ukraine and the elaborate kabuki theater of Kamala Harris vs. Donald Trump in the USA.

I was prompted to track down the video below after reading this tweet by Zlatti71:

Germany’s economy is continuing to decline. In southern Germany, where the automotive industry was once the primary driver of growth, the situation has become alarming. Over the past two months, the supplier industry has experienced a drop in order intake by about 10 to 15%, signaling significant challenges for the sector.

Boris Palmer is a German politician who became well-known over many years as the mayor of the city of Tübingen (Baden-Württemberg).

He recently said: “This is a decline like I have never seen before, the heart of Baden-Württemberg as an industrial region. The situation is truly alarming. Tübingen, once a thriving city, is now a case for redevelopment.”

The video shows a segment from a recent edition of the Markus Lanz talk show on the German public broadcaster ZDF. Many thanks to Brunhilde for the translation, and to Vlad Tepes and RAIR Foundation for the subtitling.

The translator sends these background notes on the dramatis personae in the video:

Markus Lanz is the talk show host.

At the start of this segment, the banner at the bottom says, “Michael Roth will not run for the Bundestag in 2025.”

Michael Roth belongs to Chancellor Olaf Scholz’s governing Social Democratic Party (SPD). He has served as a member of the Bundestag since 1998 and was minister of state for Europe at the German Federal Foreign Affairs office from 2013 to 2021 under Angela Merkel. So he had been a bigwig in the SPD. At the beginning he tells the host that he no longer holds any important positions in that party.

Boris Pistorius (who does not appear in the video, but is mentioned) is a Social Democrat who serves as Minister of Defence under Chancellor Scholz.

When Michael Roth says at approximately 2:46 that he’s had enough of dealing with Gerard Schrӧder’s Russia lies, he’s referring to this sort of thing (from Wikipedia): “After the 2022 Russian invasion of Ukraine, Schröder was criticized for his policies towards Vladimir Putin’s government, his work for Russian state-owned companies, and his lobbying on behalf of Russia. In March 2022, the Public Prosecutor General initiated proceedings related to accusations against Schröder of complicity in crimes against humanity due to his role in Russian state-owned corporations, while the CDU/CSU group demanded that Schröder be included in the European Union sanctions against individuals with ties to the Russian government. An SPD party arbitration committee ruled in March 2023 that he had not violated any party rules and would remain a member of the party.”

The blond guy who starts speaking at about 2:56 is Boris Palmer, who is the mayor of Tübingen. Once a Green, he transitioned from Wunderkind to “problem child” in his party. He’s the guy who praises Gerhard Schröder for having gotten the German economy on the road even though it caused trouble with his party.

At about 4:10 the banner says “Boris Palmer is considered to be the best-known mayor in Germany.”

The woman, Eva Quadbeck, is a journalist, the head of the capital editorial office of the RND editorial network, which is closely tied to the SPD.

Hellequin GB adds this note:

Boris Palmer is no longer with the Greens. He’s now an independent with the Free Voters. Nevertheless, in this discussion on ZDF he is saying that they have a €40 million financial hole, but he just opened up an elaborately heated bicycle bridge, at a cost to the taxpayer of €16 million. That guy is not for real. He’s just like the rest.

For an extensive analysis (in German) of the discussion on Markus Lanz, see this post from Tichys Einblick.

Video transcript:

00:01   If I were to stand here as a socialist and say, “No, all that doesn’t work,”
00:06   how would one then conduct an election campaign? —Okay, then concretely. Olaf Scholz?
00:10   Olaf Scholz, it seems to me, has bombed for the SPD [Social Democratic Party] as a candidate
00:13   for chancellor and as the incumbent chancellor. —Did you just say, “it seems to me”?
00:18   That’s how it seems to me. Those are the debates. I am not on the party board
00:21   or on the party executive committee. I’m out of everything.
00:24   You, you as a member of the SPD, an important man in the SPD,
00:28   if it were up to you, who would you put up to run? Olaf Scholz? Is that your man?
00:32   The chancellor you unconditionally stand behind? —So I have never in my whole life
00:38   unconditionally stood behind anyone except my husband.
00:43   Okay. Private matters are now getting mixed with political ones.
00:47   I would actually be interested in political issues now. —Yes, I also did not stand
00:50   behind Gerhard Schröder as chancellor candidate 100 percent,
00:53   because of course I also knew about his weaknesses and his problems.
00:57   This party will go with Olaf Scholz, I firmly believe, into the Bundestag election campaign.
01:02   And someone who drops out, like me, will not explain in a talk show, like a head teacher,
01:08   what is good about it or what is bad about it. —Okay, what would be good about Boris Pistorius?
01:13   Boris Pistorius is someone who, despite making clear
01:17   and also very controversial statements, enjoys the trust of the population.
01:22   And I hope that in an election campaign he can take on an important enough role
01:25   that we as the SPD can bring the horsepower to the streets that we need to become stronger.
01:30   We are currently at 16 percent; that is pitiful.
01:33   No socialist should be satisfied with that. —So that would be your man?
01:37   That is one of the ones I trust to bring about a better result for the SPD.
01:42   And again, I have the impression that this SPD has made it clear: Olaf Scholz
01:50   is the chancellor and Olaf Scholz will also be the candidate for chancellor.
01:53   You just described what an excellent candidate Boris Pistorius would make.
01:58   You said he can make clear arguments and is popular with the people.
02:03   Aren’t these actually both things that do not directly reflect on Olaf Scholz?
02:06   One of the problems is that for the past three years,
02:10   the SPD has blamed everything on the chancellor.
02:15   I am in favor of the chancellor always playing a central role.
02:20   But in a professional team game, when you put all the strength
02:24   and also good personalities of a party at the front, you’re likely to succeed.
02:30   I think the expectations that were put on Olaf Scholz — he could not meet them all.
02:36   Boris Palmer says we need another chancellor like Gerhard Schröder,
02:40   who cleans up left-wing life lies, as far as the economy is concerned, for example.
02:45   Which left wing? I already have enough to deal with in his Russia lies.
02:50   For me, Gerhard Schröder is not necessarily
02:53   the role model for a future-oriented policy in this world of wars.
02:56   I don’t know if I’ve ever said “life lies” so often.
03:00   But what really concerns me seriously
03:04   was the analogy that, with Agenda 2010, Gerhard Schröder
03:09   helped Germany out of a deep economic depression and restored the performance principle,
03:14   had a lot of trouble with his party, but laid the foundation for at least 15 years
03:18   of prosperity in this country. And now I have the impression
03:22   that there is a chancellor who completely brushes off the problem of the economy in this country.
03:26   And the last 2 months have been much worse than before. This has not really been commented on yet.
03:30   We are now at minus 10, minus 15 percent in many companies in Baden-Württemberg.
03:35   Where was that? Revenue or jobs? —Monthly revenue.
03:38   It’s really going down fast now. That’s a drop like I’ve not seen before.
03:43   Where specifically? —New incoming orders from the automotive industry on down into
03:51   all the supply chains. Engineering. The heart of Baden-Württemberg as an industrial region —
03:56   these are really threatening conditions. And I don’t get any reaction to that at all
03:59   from the chancellor. And what concerns me even more as a municipal politician, of course,
04:03   are the finances of the cities and municipalities.
04:07   We definitely have a rampant escalation of social legislation, federal participation laws,
04:10   youth aid laws, inclusion laws, due to the enormous efforts for refugees.
04:15   For all these social expenditures, we currently have
04:18   an explosion of costs that we had not seen before — with stagnating revenues.
04:23   And when I look at the municipal budget, then I only see a huge hole
04:26   that I have to work on together with the municipal council next weekend.
04:30   How big is this hole? —The hole is currently €40 million.
04:33   Nobody can do anything with that now. —But you are a prosperous city.
04:36   We were up to two years ago. From prosperity to redevelopment.
04:40   Because the social costs are exploding so extremely.
04:43   The revenues are stagnating, and the gap opens up like this.
04:46   And if we want to solve this now, just to illustrate, it’s about 15% of the current revenues.
04:51   We could close the hole by doubling the basic tax
04:54   for everyone, canceling every other bus trip,
04:57   closing a theater and closing an indoor pool. Because…
05:02   That would be about enough to close this hole that we currently have.
05:06   And then you can imagine what that means for the population.
05:09   In comparison with that, the gap that we had with the AfD election in East Germany
05:12   is probably harmless so far. If now, so to speak, the provisioning of municipalities
05:17   is really financially threatened… —Of municipalities, could you explain briefly?
05:21   Did I understand that correctly? —The “debt brake” [balanced budget amendment]
05:24   allows the federal government to incur debt in times of economic weakness despite the debt brake.
05:30   It does not apply to us. —It does not apply to the municipalities?
05:33   We are now under strict legal supervision. No matter how it works, you are not allowed to…
05:36   We have to balance our budget.
05:39   There is legal supervision for this. It also controls it. That’s why very tough measures
05:42   are now being taken in the municipalities. And I would expect the federal government, and
05:47   especially the chancellor, to stand up and say, we really have a problem, as Gerhard Schröder did.
05:52   And then do away with things that we can no longer afford.
05:55   Retirement at 63 is completely unfinanceable. Maybe we need a few more working hours per week.
06:00   The EnBW [energy supplier] works 36 hours. The energy supply is far too expensive.
06:05   We have the lowest annual working hours in the world,
06:09   [lower] than all other countries worldwide. 200 hours less than in Switzerland.
06:13   Prosperity can no longer be maintained like this. We really need a lift in this country.
06:17   That’s what I meant. Gerhard Schröder got something done. And that’s what I’d like
06:21   from Chancellor Scholz. Then he may even be re-elected.
06:24   Ms. Quadbeck, does the SPD have an idea? —Over the weekend, the SPD put a paper in the show window
06:31   that contains many economic aspects.
06:35   But unfortunately, especially when it comes to taxes and fee assessments…
06:41   So you look, you would like to have the industrial electricity price again?
06:46   This would be financed by tax money. —You would like to have the e-car supplement again?
06:52   This would also be financed by tax money.
06:55   So the same e-car funding, that was so brutally capped, is now back again.
07:02   Exactly, the funding that was cut first after the Constitutional Court ruling,
07:05   because the money was no longer in the budget, is now supposed to come back.
07:08   And then pension reform was also propagated again, which the SPD implemented
07:11   through the traffic light coalition [SPD + FDP + Greens] . But it has the hook
07:16   that secures the pension level for those about to retire or who are already retired.
07:22   But the whole thing is paid for by the employees and of course by the companies,
07:27   which have to pay half of the pension contributions.
07:30   And they will really increase sharply if that remains exactly as it is now,
07:34   fixed in the “Ampelgesetz” [law passed by governing coalition].
07:37   So of course I still see the taxes in this paper.
07:42   It was quoted at the beginning of the show. Maybe that’s one aspect we should work out
07:46   for a moment, because it sounds so good.
07:49   You want to give tax relief to 95% of employees by burdening 1% of employees [with more taxes].
07:56   That cannot work. We also inquired at the SPD
07:59   and of course tried to find out what kind of calculation is behind it.
08:04   But they weren’t able to just present it to us.
08:08   So I don’t see how this is going to work at all. So the 1% is now supposed to save Germany?
08:15   1%, exactly. And then there are also those two old acquaintances
08:18   in this paper, inheritance tax and property tax.
08:21   The SPD created a property tax concept in
08:24   2019 under the SPD chairman Thorsten Schäfer-Gümbel, who was interim chairman at the time.
08:32   That was a concept that produced around 10 billion euros back then.
08:36   And this concept states that you can no longer implement an inheritance tax reform
08:41   because it has been all reformed out in Germany. So that’s also in the concept.
08:44   But now in the new paper, again, there is also an inheritance tax.
08:48   To be honest, it’s all pretty much built on sand. It was all written up pretty quickly.
08:53   And what is really missing, Mr. Palmer is
08:56   right about that, are the real impulses that would…
08:59   The structural reforms… that would give the economy structure.
09:03   And it’s actually not just in Baden-Württemberg that things look bad, but in the third quarter
09:06   of this year so many companies went bankrupt, as recently in the financial crisis in Germany.
09:13   And that is in fact a dramatic situation.
09:16   And you can’t just respond to this
09:19   with a few more taxes here and stabilizing the pension there.
09:24   That’s not enough. —Mr. Roth, I know you’re not a financial politician,
09:28   but you discuss such things. Is there any accounting? Is there any correction?
09:34   Are there serious figures? —So if I understood that correctly,
09:38   it was a proposal that was to be worked out
09:41   in detail by the spring of next year.
09:46   The paper was in many parts copied
09:49   from the United States of America.
09:52   So tax relief for employees.
09:55   A huge, also debt-financed investment package
09:59   in green technology, in renewable energies, in infrastructure that needs to be renovated.
10:05   The municipalities will also get something out of it. These are the essential elements.
10:08   And that has to be laid out in detail, for example, in tax policy.
10:13   So what happened in the United States and for which
10:16   the United States has been praised and recognized is now the blueprint for a social
10:20   democratic concept, which cannot be realized in the current coalition
10:23   because we can only invest in a very limited way
10:27   beyond the debt brake as it currently exists.
10:33   And I currently have a country in which
10:36   we cannot meet our obligations for external security and defense.
10:42   We can no longer help Ukraine. I strongly advise against playing internal,
10:47   external and social security against each other because
10:50   I suspect how this will turn out in Germany.
10:53   Then at some point there will be no more money at all for defense, for international affairs,
10:58   for humanitarian aid. Because of course in Germany we will say
11:01   that we prefer to have the welfare state as we know it and appreciate it.
11:04   We have to get out of this situation.
11:07   And unfortunately this is only possible with debt.
11:10   And we can’t take on more debt at the moment.
11:14   We also want to provide tax relief for people. That means we can’t demand from employees
11:20   that they pay more taxes. —I just want to make one small point.
11:24   And then we’ll talk about Ukraine, because that’s important too.
11:28   So you said, they copied [from the US] and then banged something out [the paper].
11:34   They took numbers, said, look, 1% pay more taxes
11:37   and then 95% get tax relief.
11:40   That sounds incredibly good. Previously we talked a lot about populism. Is that populism?
11:45   No, it would be populism… Do you have a figure for that? Is that serious?
11:49   Again, I’m not even in the discussion… —How much do you get when you tax this 1%?
11:54   As previously stated, I firmly believe that our tax experts
11:59   will present a detailed concept by spring.
12:02   So first you get the thing out and then you present the concept?
12:06   Well, it’s common to present cornerstones first and then a detailed debate takes place.
12:11   And then you can also argue about that.
 

9 thoughts on “Germany Flushes Itself Down the Toilet

  1. I will advise first the 1% vs the 95%.
    The thing is the 1% will move their wealth & money away. They will create abroad companies where the profit is realized. (US example:P They will try to prohibit it.)
    Another option usually is different taxation for the whole populace. (Progressive taxing.)
    It can work, but it is really hard to find the appropriate ratio and borders. (In my country they did it once but they managed to botch the ratios terribly. It meant that those that after 10 years would have enjoyed a raise actually earned less as the increased tax rate ate it:P Of course there is another kind of progressive tax that would and could work, but then the system gets more complex. Each one of the new taxations has its flaws and its merits.)

    Regarding the german industrial decline?
    Why so surprised?
    Anyone with a bit of mind could have figured out it is coming.

    However this actually goes back a bit to the Merkel era. When the nuclear power plant shutdowns have been decided. The german energy sector was mostly reliant on nuclear power and natural gas.(from Russia)
    Once the nuclear power plants were shut down only natural gas remained.
    The so called green energies are unable to work as “base power supplier plants”(sorry not sure of the correct term). Only perhaps tidewave plants could have worked to a degree in a reliable way. Wind and Solar are too dependant on the weather.
    Thus it is very hard to keep the grid working properly a lot of natural gas is required to balance it out.
    Which until the Russians supplied the gas cheaply was an option.

    Then the US made the coup in Ukraine. They started to use their local political friends to sell them the Ukrainean wealth.(Land, resources etc.) Whereas also increasing hostility with Russia.
    Eventually it lead to Russia invading Ukraine.(Russia has been saying what her red line is for 30 + years!)
    Then all those sanctions got imposed on Russia.
    No more cheap energy to Germany. Also suddenly no way to even get enough resources…as the supply lines were already very well established. To redirect them a lot of money is needed, and they are not cheap neither.
    The US sold the gas 4 times more expensive than the russians.
    The sanctions also affected one of Germany’s greatest purchaser of industrial products ->Russia, who instead started to buy everything from Germany’s number one competitor China.

    Germany gave up a huge chunk of industrial market, gave up its cheap energy, and also faces a huge social and economical challenge due to the migrants.
    (BTW the migrants are also a huge drain. And they will continue to be like that.)

    So Germany as they say managed to stab itself in the groin.
    It was foreseeable. But those that said that this will (or the more cautious said this might) happen were all called conspiracy theorists:)

    So Germany managed to cripple itself in almost every way possible. And with it most of Europe. (Not to mention in the Energy Sector it managed to elevate its rival France:P)

    • Yes, that’s pretty much the way I see it. But I didn’t want to add my unsourced editorial comment, so I’m glad you chimed in.

      • correction in the first sentence I meant to write address:)

        The thing is what was done to and in the EU in accordance with Ukraine and Germany, was basicly the enaction of the Brzezinski plan. Dating back to around 40 years.

        The sad part is that it was not taken into account that many of the sociological, cultural, technological and so on environment has changed and therefore many aspects of that plan are outdated.

        That basicly the US did not just only cripple EU with the enaction of it, but itself as well.

        The funny thing is that Germany might actually be able to use this situation.
        With the coming depression, economical issues, the humanitarian aid they so generously provide might become impossible to give.
        Thus their muslim issue might be resolved, as they will simply leave as the free handouts disappear.
        I am not saying it will happen, i am just saying that Germany has now a chance to deal with the issue. Free handouts removed, and a bit more stricter policies could mean they can remove the muslim threat from their country. (Since they are still only in Stage 2)

        Though this likely will mean that other countries, Belgium, France, Sweden will have to deal with those that leave Germany. But all of those countries are in Stage 3 or 4. At Stage 3, without bloodshed there is no way to stop the islamisation of a country.(If a country’s populace has a certain ratio of muslims within a hundred years it will become a muslim majority country. )

        Of course with the current political environment it is an unlikely Scenario that the germans will use this chance they got. Since the hard left thinking has been ingrained in many.
        (Am also from a country from the ex-Warsaw Pact)

        The US is also facing threats that many do not wish to realize or understand.
        The first one is the economical threat they face:
        – illegal migration
        – drug(mostly fentanyl, and all kinds of other chinese synth drugs)
        These two are a very good way to drain a countries resource reliably. These basicly mean that they are burning their own money.
        The almost unconditional support of Ukraine, which they incited to cross the red lines of Russia also costs a lot. (It would take a very long separate post to tell what actually happened to and in Ukraine)

        Politically/Demography wise:
        The US with the recent illegal immigration, the powder keg they bew up in the Middle East in the past 20 years also means, that the US has entered Stage 3.
        There are about 30 million muslims in the country. They have already managed to infiltrate city councils, take over a few communities, and to appear in higher political circles.
        The unconditional support of islam from the so called university students, who have been brainwashed by marxist ideologies also pose a huge threat.

        So the funny thing is, that many of the things that was done to Germany, also happened to happen to the US as well.
        Currently i would say they are in an early Iran road. Marxists and islam hand in hand to overthrow the current system.
        (Which interestingly will happen to EVERY DEMOCRACY THAT LETS IN MUSLIM MIGRANTS.)

        The Stages i use in reference:
        https://www.americanthinker.com/articles/2011/05/the_five_stages_of_islam.html

  2. Well, the German economy was supported by cheap energy from Russia. What went wrong? Perhaps Germany will get its own back, as a result of this bloody scam – after the upcoming defeat and colonization of Russia. But this is not certain.

    • Not just energy, but a few additiona resources too. To keep its chemical industry and paper industry going too.
      The greatest cost which made them as to say less competible was the price of the workers, the salary. They managed to offset this with Russian resources that they got cheap. They also had Russia, as a big market that they could sell their products too.
      They basicly lost both.
      The cheap energy they lost they cannot actually replace.
      a) because they are now not a trusted customer for Russia, so even if new deals will be struck prices will be higher.
      b) Russia managed to find other buyers, thus Germany and Europe will have to pay higher prices than they are used to
      c) Russia also is building up more pipelines to diversify their customer base making their position stronger on the market.
      d) Germany has stopped using nuclear power. -> They also do not wish to use coal plants due to environmental reasons.->Which leads them to very few choices of energy producing plants and facilities. They cannot produce enough energy with Hydroplants(i would say not even a tenth of the need!), no geothermal options, and the solar and wind is unreliable.

      As one who has been watching all these conflicts for a while, and actually studied under a few military, and other analysts, if you look at the picture objectively Russia will not lose the war.
      They population wise 3-4 times bigger than Ukraine, they managed to keep most of the weapons industry afloat, they also have a stronger economy, greater air and artillery support. Their territory is so large, that they can keep their industry going in the hinterlands nearly forever. They also have the resources to keep their complex going. Yes some of the finer electronic devices might be harder to come by…but smuggling in the 21st century is a lot easier:S And they can smuggle in mass amounts of containers.
      China is a silent backer. North Korea is a not so silent backer, now even lending soldiers to them. (For North Korea which has issues of getting enough food, certain resources, diplomatic relations, and where life is cheap, sacrificing a few thousand or tens of thousands of soldiers for the right price…is an acceptable deal.)

      NATO cannot directly involve itself in the war, or it is game over for the whole world.

      It is a said thing to say, but Ukraine is done for.
      The population is demoralized, at least 25-30% left the country, another 5% is dead/wounded/disabled. The infrastructure and industry and even agriculture is in shambles. It has a lot of debt, huge loans too.
      If it is lucky, Ukraine might still be as a country with only the parts the Russians took. However it is entirely possible that something else happens to it. There is sadly no unimaginable screenplay in regards to Ukraine.
      Ukraine’s last good attempt at survival was during the peace talks organized by Turkey. Which Boris (UK PM) demanded to halt.
      To give a recent historical analogy, basicly this was the place where Ukraine could have gotten away with a similar peace treaty as Georgia, where they could have minimized their losses.
      The Kursk offensive from Ukraine was one of the most pointless ventures, and one which basicly eroded the most experienced and technically advanced military units. And it added the final nail in the coffin, as when Ukraine retaliated this way to Russia, it meant that Russia removed its gloves(and yes Russia still allowed some leeway to Ukraine, however strange it is to say, or think), and will offer no pardon. It will only be satisfied with the complete crushing of Ukraine.

      What we are seeing with Ukraine is basicly similar to what happened with Vietnam. They were fighting till the last man, just there the Americans intervened on their Southern allies side. But they eventually pulled out and the northerns won. It is something similar what we see here. Just this time America does not even intervene directly.
      The loans that France and the US grant will have to repayed, and the cost of those will be terrible.

      So for Ukraine there is no way or position to win. Even if by any miracle the war woudl stop with a draw, the Russians would pull back and the territories would be given back, the resources there, the land and basicly everything woudl go to US and French companies.

      It is a terrible thing to see, witness and live.
      But the Ukrainean people and their leaders were lied to and scammed. They fell for it. They believed all the lies that the EU and the US promised them. (Especially the US.) Without what happened(was staged) at Maidan, and all the later on decisions that followed because of it Ukraine would still exist, and even if slowly it would have had a chance to reach the goals it had, like joining the EU. (Beside joining NATO. The Budapest Memorandum was actually by every party. Without Maidan it likely would be still in effect.)

      Ukraine was just a toy for US geopolitical, economical and financial goals. (The EU just followed suit, sadly they are unable to come up with their own goals, and follow the US like good puppies.)

  3. @Concerned Reader
    It’s not possible for there to be 30 million Muslims currently in the United States. I don’t know what is a good source for this.

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