IS GERMANY MOVING TO A "WAR ECONOMY"?

Marder infantry fighting vehicles

by Duns Scotus

Apparently, Germany hasn't been doing too well economically. Here is an excerpt from the Guardian attempting to label Germany the "Sick Man of Europe":

"Germany is struggling. Its economy has shown no growth in the best part of two years. Its infrastructure is badly in need of modernisation. There are strikes on the railways. Protesting farmers have brought Berlin to a standstill. Deutsche Bank is cutting thousands of jobs. School standards are slipping. There is growing support for parties of the hard left and hard right. For the second time in a quarter of a century it is being labelled the sick man of Europe."

The problem is that the German economy was probably always something of a mirage, an illusion caused by cheap Russian gas, the artificial depreciation of the German currency through the Euro scam, and the first flush of mass immigration and cheap labour. Now the cheap Russian gas has disappeared and the hidden costs of immigration and the Euro are starting to kick in.

Ergo: a relatively "underperforming" German economy!

But has the German economy now found a way out of this trap, thanks to the war in the Ukraine?

Here are some snippets from the Institute for the Study of War:

"European Council President Charles Michel stated on February 6 that the European Council and Parliament reached a provisional agreement on the creation of a new single dedicated instrument – the Ukraine Facility – to pool the EU’s recently announced support package of 50 billion euros (about $54 billion) for Ukraine for 2024-2027.

European Commission President Ursula von der Leyen stated that the EU aims to start payments to the Ukraine Facility in March 2024.

German arms manufacturer Rheinmetall stated on February 5 that it plans to send tens of thousands of 155mm artillery shells, dozens of Marder infantry fighting vehicles, 25 Leopard 1A5 tanks, and an unspecified number of Skynex air defense systems to Ukraine in 2024.

The EU and its member states have made available 138 billion euros (about $148.5 billion) - including its recently announced support package of 50 billion euros (about $54 billion) - to Ukraine since Russia’s full-scale invasion in February 2022. In comparison, the US has appropriated $113 billion to Ukraine since the full-scale invasion, of which over $75 billion was directly allocated to Ukraine for humanitarian, financial, and military support."

This all sounds very generous, but this may not be as entirely altruistic as we suppose.

The essential problem that hyper efficient manufacturing economies, like Germany, have is that they over produce themselves into "poverty."

Either the market becomes saturated or the constant exporting destroys the currency by making it too valuable and thus unprofitable to sell to foreigners. The obvious solution to this kind of problem is to create something that doesn't saturate the market and destroy its own demand. What then could be better than a nice, sanitised, and compartmentalised "little" war not too far away?

This allows the Germans to float Euros, underpinned by the creeping emotional dread all Europeans now feel towards Putin's Russia, to ramp up investment in military production that creates good jobs with little inflationary or currency effects because it all goes "boom boom boom" on the battlefields of the Ukraine.

The recent reluctance of the Yanks to step up on the plate recently for their own rather tedious domestic political reasons has only helped this process.