Germany faces its worst nightmare – becoming France
The new chancellor has the in-tray from hell after today’s election. Huge sums of money must be found for the misfiring economy, pensions and defence.
There is huge pressure to tear up public spending and debt rules that run deep in the national psyche.
More recently, German fiscal discipline was the stick used to beat Berlin’s EU allies.
During the Eurozone crisis, well-heeled German politicians lectured the likes of Greece, Italy and Spain for their irresponsible spending.
Berlin insisted on strict EU-wide limits on budget deficits and public debt after playing an influential role in financing and designing the Eurozone bailout programmes.
Infrastructure and businesses are in dire need of modernisation in a land where the fax machine is not yet extinct.
The population is ageing. Baby boomers born during all-time high birth rates between 1955 and 1969 are retiring, while the workforce shrinks.
This has created a looming pensions crisis, but reforming a system pegged to wage inflation is politically explosive with older and influential voters.
Last year, Germany had a record trade surplus of more than £59 billion with the US, its largest trading partner and where it sends more than 10 per cent of its exports.
The centre-Right CDU leader, a fiscal conservative, must now decide what to do with Germany’s debt brake, enshrined in the constitution, which was introduced after the 2008 financial crisis.
James Crisp Telegraph 23 February 2025
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