The Chancellor was scolded as "Madame No" – but the coalition’s economic stimulus measures can also be seen in international comparison – but there is still room to refuel. And in view of the extent of the economic crisis, it will probably also be necessary to saddle up. An analysis.
Angela Merkel (CDU) has been called "Madame No" because last autumn she persistently refused extensive economic stimulus programs. The Chancellor no longer wears the disgraceful name. Why also? Finally, the federal government has launched two economic stimulus programs, which not only in the opinion of the Federal Minister of Finance "can be seen". In fact, at 3.5 percent of German gross economic output over two years, they are larger than the programs in France and Great Britain. According to a current study by the International Monetary Fund, only China and Saudi Arabia outperform the Federal Republic in terms of spending to stimulate the economy and stabilize the economy.
Economic stimulus packages are impressive
In the meantime, public opinion has got Merkel, Steinbruck and Co. to add some shovel – but also to group various government measures under the umbrella term "stimulus package" in order to "make mass": That was a bit of a misnomer with a rather incoherent collection of instruments. However, each of them does not have to be bad – even if it may also be about "buying votes", as the opposition criticizes.
Short-time work, scrapping bonus – effective instruments?
This applies above all to the state-sponsored expansion of short-time work, which gives employers and the economy an important, months-long respite – before layoffs could be inevitable. The current labor market figures suggest what would have happened long ago without this drug. It will be interesting to see whether the London G20 summit, which is evaluating the national instruments, will recommend short-time working to other countries as well.
However, the scrapping premium, which, by the way, is completely unjustifiably officially known as the "environmental premium", is also effective. The ecological benefit hardly exists – but the economic benefit does. On the one hand, it is fueling the sales of German mass manufacturers, including the ailing company Opel, which has thus had the best company quarter on the German market for ten years. On the other hand, it generally stimulates the surprising current propensity to consume among Germans. This important psychological effect of the scrapping bonus is mostly underestimated. However, it is only a drop in the ocean when it comes to chronically weak domestic consumption.
Further consumption incentives are desirable
However, this cannot be stimulated by reminders from American professors – only by a moderate end to the years of German wage restraint with a one-sided fixation on competitiveness in wage costs, in favor of exports. However, wages are a matter for the social partners – not the government. However, this could enable "more net of gross" for taxes and social security contributions in favor of consumption, beyond the steps already decided such as the health insurance contribution. But "black" and "red" cannot agree on that at the moment.
Significant economic stimuli are also the expanded loan and guarantee offers for small and medium-sized enterprises as well as the 17 billion program for educational infrastructure, urban and road construction – if the Federal Council would finally give the go-ahead. However, the construction industry is still fairly busy at the moment. Larger investments at a faster rate would not be easy to implement at the hardware store.
The state finances everything on credit
Seen in this light, the relative reluctance to date with regard to economic stimulus programs makes perfect sense – but above all because the state also needs something to replenish. Because we are still only at the beginning of the depression, which in 2009 could cause an economic decline of 4.5 percent – but also seven or eight percent! And which can take on even more dramatic features in 2010. Can! Not have to.
One has to live with this uncertainty; The same applies to how much the state bank rescue and economic measures – which, including mere guarantees and sureties in Germany, add up to an estimated 700 billion euros – will really cost in the end. Because it is also clear that the state finances all of this on credit. And the bill will later be presented to the citizens via tax increases and fewer government benefits. This is another reason why Merkel and Steinbruck are resisting overly large spending packages at the moment. And before the summit, their Sherpas emphasize that no further aid packages will be discussed, let alone decided, in London.
Economic stimulus packages III and IV – only a matter of time
However, nobody believes that an economic stimulus package III or IV will not come after all if the economic situation deteriorates dramatically. With further economic stimulus packages there would also be an opportunity for stronger qualitative impulses. Approaches to ecological and economic restructuring – as Obama is striving for in his research, economic and educational policy – are only recognizable in Germany on a small scale, for example in construction work and thermal insulation.
It will be interesting to see whether the black and red coalition will receive suggestions for this at the summit in London: so that Germany really emerges stronger from the crisis, as top politicians are already all too full-bodied claiming. Because it is more likely that Germany, like many other countries, will end up with significantly more debt at the end of the global financial fiasco. The call of the demonstrators "We are not paying for your crisis!" is nothing more than a cry of angry helplessness.