The Powerlessness of Germany’s next chancellor

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1. Submission Statement: Friedrich Merz, Germany’s likely conservative next chancellor, is campaigning to Make Germany Great Again by promising an economic revival and restoring Germany’s tarnished international credibility. However, many factors make this goal vanishingly unlikely.

   In summary, Merz has yet to realize that Germany is a bystander in a world where the big three superpowers are led by strongmen also determined to make their nations great again- often at Germany’s expense. When it comes to real hard power, Germany cannot compete with the superpowers.

   Both Xi and Trump are determined to destroy the German auto industry, Putin is determined to make Germany a Russian satellite, the Bundeswehr is a joke, and Germany has no natural resources. The odds for a German revival are slim. Europe as a whole risks being a passenger in a world controlled by Trump, Xi, and Putin.

2. Germany should just take stronger positions, improve the relationships with France (and maybe Italy), deal with China and contain Trump exuberance. Then and only then, maybe, it should give a damn about Russia. As for the natural resources there are plenty. Willing to use them rather than buy them probably little. The car industry must wake up, we need a serious and adult discussion there. The world has changed and keep producing the same car over and over again has become anachronistic, prise-wise and type-wise.

   Edit: forgot to say that Merz can do it. But he needs to be willing to make unpopular decisions, such as energy policies or welfare subsidies. Also increasing the military spending. This is all very difficult, I’ll admit it. We need a strong man. He could very be the one but he has to commit to it

3. Germany is collapsing as a manufacturing nation due to lack of labour, the signing of free trade agreements with competitor nations and the end of cheap Russian gas.

   Germany built its economy on a three legged stool:

   1. The first leg was guest workers. German manufacturing was carried out by conscientious post war Germans, and with Turkish “Gastarbieter” – guest workers doing that manual lifting.

   Things changed after unification and new EU rules, especially the Treaty of Amsterdam in 1999, when visas, asylum, immigration and other policies relating to the free movement of all persons, including third-country nationals, were moved from the JHA pillar to Title IV of the EC Treaty (EC Treaty, Arts. 61-69), and hence from an intergovernmental approach to policy-making to a common approach.

   The other big change was in attitudes within Germany. Young degree holding Germans didn’t want to bolt wheels onto BMWs. They wanted to wear suits.

   This shaky leg explains why Merkel was keep to allow so many refugees into Germany in 2015. Sadly she quickly found out that they don’t want to do manual work either.

   2. The second leg was the EU captive market. With free trade across borders Germany became the major manufacturing nation for the EU. Tariffs on imported goods allowed Germany to make higher profits.

   But that captive market has fallen away because the EU is now signing free trade agreements with other manufacturing nations. A free trade agreement with Korea came into force in 2015. An economic partnership agreement was signed with Japan in 2019. A free trade agreement with China is underway.

   This will open the door for foreign manufacturing and end Germanys captive market.

   3. The third leg is the cheapest energy in the world – Russian gas. In 2019 Germany was paying USD4 per unit of natural gas compared to Japan who were paying USD8.40 per unit. This is precisely why Germany is a major chemical and fertiliser manufacturer and Japan isn’t.

   All that just changed forever.

4. Europe will become a museum

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