Tagged: germany

Vincent Dreher

Seven years in crisis: Some questions for the Eurozone

DER SPIEGEL 29 2015Recently, German media entered uncharted territory. While conservative newspapers have always identified the Greek government’s profligacy as root cause of the ongoing crisis, the liberal press had maintained more balanced positions. Yet on July 9, 2015, the weekly DIE ZEIT asked: ‘The Greek trap – the crisis-ridden country has a culture inimical to achievement. How can it be overcome?’ DER SPIEGEL proclaimed (in its July 11 issue) the necessity of ending the German romanticization of its arcadia in Attica. The title read: ‘Our Greeks – rapprochement with a strange people’.

Since when has culture advanced as main explanation for a country’s (economic) misery? How can shortcomings in a state bureaucracy be taken to explain an entire people’s failure of achieving prosperity and societal welfare?

In logical consequence of this narrative, the subsequent Eurozone-Greece agreement of July 13, 2015 figured as ‘the most intrusive economic supervision program ever mounted in the EU’ (FT). The drastic measures alongside the required ‘ownership’ of reforms revealed the deep mistrust in Greek institutions. The source of most, if not of all, failures was located in the Greek government’s incapacity, or reluctance, to accept conditionalities and implement reforms.

Unit labor costs and competitiveness in the Eurozone

This is yet another instance of misinterpreting the symptoms of a disease rooted in the fundamental misalignments within the Eurozone. There have been idiosyncratic issues in Greece (reporting failures, unsustainable debt since 2010), just as there have been home-grown issues in other crisis-hit member states contributing to the current escalation. However, these problems represent only the tip of the iceberg. It is not the misbehavior of individual governments, let alone cultures, which underlie the seven-year-old crisis. It is persistent failures in the economic governance of the Eurozone. Recent data from other Southern members are hailed as heralding the end of misery (EC, Reuters, FT, WSJ). The following discussion will demonstrate to the contrary: as long as the shortcomings in the institutional set-up of the Euro and the failures of member state coordination of fiscal policies persist, the crisis will continue. Greece today, who tomorrow?

Unit labor costs, the ratio of total labor costs to productivity, are interpreted as the best approximation of an economy’s competitiveness. Judged by these standards, today’s Germany is competitive. This is not merely due to its superior productivity though. German multinationals as well as the famed Mittelstand are very capable. But the great divergence of unit labor costs compared to Southern European economies was due to wage restraints and welfare cuts, beginning with Schröder’s Agenda 2010 in the early 2000s (Mickey Levy, Flassbeck, Spiecker, The Economist). Addressing ‘the sick man of the Euro’, the reforms (and other factors) put the German economy ahead. This was achieved, however, at the cost of society’s lower strata and its Euro partners, as evidenced by subsequent divergences in balance of payments across the Eurozone (Gavin Davies). Bound by the Euro, others could no longer devalue their national currencies to improve competitiveness. During the decade of the European boom, no one seemed to worry. Southern economies expanded strongly, while Northern capital was flowing in and financed investments and consumption. Consumption of Northern, of German goods for that matter. Apparently unnoticed, Eurozone’s North and South diverged.

Since the onset of adjustment programs across Europe, however, unit labor cost convergence has moved center stage. Yet this is not a joint effort – i.e. via wage restraint, reforms and export-orientation in the South combined with wage increases, fiscal expansion and domestic consumption in the North. Instead, the benchmark has been set by Germany and Northern Europe, and the others are asked to adjust. During the past years, Southern economies have undertaken enormous efforts. Greece, above all, is the star pupil (OECD, Economonitor). But to little avail. And even if the recent recovery across Europe (except Greece) proved sustainable – when every Eurozone member strives to become  ‘competitive’, who will act as counterpart? The German ‘Sparpolitik’ in the 2000s was offset by Southern expansion. Who is buying now, when everyone is saving?

The structure of the Eurozone and the European Central Bank

Divergences of unit labor costs, clouded by the boom, were further reinforced by the ECB’s single nominal interest rate. Paul de Grauwe and Notre Europe argue that increasing inflation in booming Southern economies lowered real interest rates, thereby rewarding further economic expansion. The reverse was true for the North, which still profited of huge export-gains. Additionally, due to increasing real exchange rate spreads the prices of comparable products across member states diverged, making Northern manufacturing more and more attractive (Vistesen, Dadush, Wyne). Hence economic dynamics pushed states further into imbalances, not merely the often denounced human fallacies. Where is the public discussion about these curious, and obviously significant, dynamics?

A second issue identified by de Grauwe is the lack of a lender of last resort. Since the late 19th century, any central bank’s mandate has included the provision of unlimited liquidity in times of financial panic; not so in the Eurozone. When the financial crisis hit Europe, each member had to clean its own doorstep. Capital fled to presumably safer Northern countries and Southerners dried up. The lack of affordable refinancing forced spending cuts, thereby inducing immediate austerity programs. The cuts diminished GDP, which made servicing debt even harder. And only then the European austerity programs were devised and implemented. The question arises: were state budgets ultimately unsustainable and Southerners righteously punished for profligacy? Or did they simply look weaker relative to Northern neighbors, which were favored by investors in times of uncertainty? Evidence points to the latter. Nevertheless, these are the discussions we Europeans should hold.

The Eurozone is not ready for the challenges ahead

Despite improvements in financial governance, such as the banking union or the ECB’s perennial setting of precedents, the economic structure of the Eurozone has seen little of the desperately needed changes (e.g. Hans Tietmeyer, Euractiv). As long as there is not some kind of fiscal union, as long as there are not some kind of common Eurozone debt instruments, the inherent fragilities persist. Furthermore, the majority of European policymakers remain bound to their national constituencies – why should they care for the whole of Europe, when their electoral mandate stems from a fraction of the people?

We need a European debate. A debate about the flawed narrative that the Greek government’s profligacy is said to have caused the economic and political crises; a debate concerning the interpretation of the crisis as a mere lack of competitiveness (what about the European welfare state by the way?); and a debate with regard to the absurd claims about “cultural” limits to economic growth.

Vincent Dreher is a PhD student at the Berlin Graduate School for Transnational Studies. He works on the Political Economy of International Money and Finance, with a focus on international institutions.

Mathis Lohaus

Bavarian Nepotism (“If it Happened There…”)

This post pays homage to Joshua Keating, who has written a number of articles for Slate in which he describes news events from the U.S. “using the tropes and tone normally employed by the American media to describe events in other countries.

CSU leadership in Bavaria, 1976 (CC Wikimedia Commons)
CSU leadership in Bavaria, 1976. CC-BY-SA Wikimedia Commons

BERLIN, Germany — Observers familiar with the political process in the German South were not surprised: after the details of a high-level nepotism scandal in the West European country’s most populous state were uncovered a few weeks ago, very little has happened.

The affair started in fall 2013, with a book published by university professor Hans Herbert von Arnim. While academic publication usually garner little attention in the country  –a number of tabloids dominate the market in the South– the book’s claims of nepotism were sufficient to spark interest at least among political opposition figures, who demanded an investigation. After several months of refusing to comment on the issue, the Bavarian government gave in to a ruling from a local court and published some findings. (Initially, these were accessible through the Bavarian public broadcasting service, but that site no longer appears to be functional.)

According to the report, Bavarian minister of education Ludwig Spaenle has dished out a grand total upwards of 810,000 USD to his wife since 1997. That equals 30 years of the current median household income in Germany. Altogether, members of the conservative-religious CSU party, which rules Bavaria since 1957, handed out almost 1.8 million USD of taxpayer money to their spouses over the last years.

Local officials point out that this is not illegal. The group of CSU silver-backs simply took advantage of a loop hole in the state’s laws (which the insular Bavarians are proud to defend against influences from the federal government). Since the year 2000, politicians have been banned from hiring family members and spouses — but lawmakers allowed for a continuation of existing contracts. This is why the current Bavarian prime minister, a veteran of the CSU who has weathered many scandals in the past, insists that none of the people involved will have to leave office.

The case appears symptomatic of broader problems in Germany. In the Southern state of Bavaria, a small group of elites have had a grip on power for almost 60 years. They are supported by a powerful business and agricultural lobby (the latter of which employs only a small fraction of the workforce, but receives lavish subsidies from the European Union). Traditionally, politics in the Southern state are shaped by social conservatism, local business interests, and a latent xenophobia. No wonder, then, that few people seem to care about a waste of taxpayer money at the top.

Perhaps the problem runs even deeper: one should not forget that Germany, despite its economic might and seemingly unquestionable democratic credentials, has yet to ratify the 2003 UN Convention Against Corruption. After more than ten years of dragging their feet –because of reluctance to curtail the freedom of members of parliament– federal officials have recently indicated that this might happen before the end of the year. Judging from recent events in Bavaria however, the prospect of real change remains slim. Instead, it seems likely that local customs remain entrenched, and  German politicians will find ways to bend the rules in their favor.

Mathis Lohaus

German Grundgesetz & Asylum

kermani-bundestag
(c) Deutscher Bundestag / Achim Melde

On Friday, German-Iranian writer Navid Kermani gave a speech in German parliament. His remarks were part of a longer ceremony to celebrate 65 years of the constitution (Grundgesetz).

Kermani’s powerful speech [here, in German] focuses on the unique role played by the 1949 constitution in the German language area, “comparable maybe only to the Lutheran bible”. He shows how elegantly designed and politically consequential several parts of the Grundgesetz were at their time (and still are). Equality before the law, and between women and men, for example.

Overall, the speech makes an excellent case for what Germans call Verfassungspatriotismus: patriotism based on pride in our constitution. One aspect of the speech, however, was meant to provoke – and promptly led to criticism.

Kermani sharply criticized GG §16a, which deals with the right to asylum. The initially very short paragraph was amended in 1993, and now the right “is practically abolished” according to Kermani.

Others were quick to point out that Germany is in fact the European country receiving the most requests for asylum.

Considering that there might be more debates on this issue in the future, I collected some data from Eurostat. The table below shows:

  • the number of positive decisions on asylum requests per 100,000 inhabitants
  • the total number of positive asylum decisions 2008-2013

Asylum statistics

As you can see, Germany accepted 7.3 asylum seekers per 100,000 inhabitants in 2013, but was clearly below the EU-28 average in earlier years. Germany was the #3 host country over the last six years. But others are much more generous: Sweden, Austria and recently Norway come to mind, as does tiny Cyprus. But the UK and France in particular have a far more generous record than Germany, both in total and in relative terms.

In case someone wants to play around more, here’s my quick and dirty data file (MS Excel). I recommend two Eurostat documents on the topic: Country-specific figures 1998-2011 (including information on how many requests were rejected versus accepted) and a brand new report on the 2013 developments. Both could help to create a more instructive comparison.

I’d also be interested in links to articles on this topic.

Mathis Lohaus

Links: International Law; Mali; Rwanda; Blogs in Germany

With a couple of bloggers back from ISA and MPSA, I hope we’ll be able to do some follow-up work in the next days. Meanwhile, here are some links to start the week:

At e-IR, Eric Lenier Ives writes about international law as the “permissive promise”:

[I]nternational law reflects a real-world distribution of power such that nations are free, in a sense, to test the will of other nations, to stretch the law and assert their own sovereignty. (…) Though international law may allow for this elasticity, and though it may be abused, it is precisely this relaxed approach that allows international law to act as both a codification of appropriate norms and a growing, living system.

Kim Yi Dionne takes a look back at what happened in Mali since 2012. In particular, she points to a discussion of a recent Afrobarometer poll: “In a complete reversal of opinion from one year earlier, two out of three Malians say that their country is moving in the ‘right direction’ at the end of 2013.”

Laura Seay has put together a very instructive reading list 20 years after the incident that triggered the Rwandan genocide. These are her opening remarks:

Everything that has happened on and since that day twenty years ago is under dispute. From the question of who shot down the plane, to which members of the regime were involved in planning and executing the genocide, to the number of people killed overall, to whether and how revenge killings unfolded, to the continuation of Rwanda’s civil war on the soil of Congo/Zaire and the tremendous suffering that has occurred there, too, to whether the Rwandan government’s success in poverty reduction is justified by its repressive authoritarianism – all of it is contested.

On a completely different note: Now we have some backing for my perception that German scientists don’t really use Twitter. In this recently published survey [in German], 15% of respondents said they use microblogs, and 61% of that subgroup then said they actively post. 30% of all respondents said they use blogs, with a third of that subgroup saying they write posts themselves. Overall, male respondents were much more likely to report an active use of (micro)blogs.

A rather curious finding: The number of people saying they don’t know what a blog is was higher than the number of people saying they don’t know what a microblog is. I guess there really is a lot of hype around Twitter. (The questionnaire mentioned Twitter as an example of the latter category, but did not mention WordPress or any other recognizable brand name for the former.)

Finally, the list of links curated by our colleagues at the Bretterblog [in German] is worth checking out as usual. (Uh, I’m doing meta-links now, I guess!?)

Mathis Lohaus

Steinmeier on Transatlantic Relations

steinmeier-brookings

This morning, I went to see German foreign minister Steinmeier’s speech at the Brookings Institution. Under the heading “Transatlantic Ties for a New Generation”, he argued that to be attractive for young people, the European-American partnership has to be based on shared values and standards of governance. The text is on the ministry’s website. In addition, Brookings published the audio and video recordings of the speech and the Q&A.

To be fair, this speech was more interesting and better prepared than the last foreign policy speech delivered by a Social Democrat that I have attended. Still, if you go beyond the personal anecdotes and jokes he made, Steinmeier said very little, let alone . The Q&A, regrettably, was hurt by the fact that Steinmeier – who had given the speech in English- answered in German. So a lot of time was spent on translation and we only covered four or five (pretty harmless) questions in total.

So, here are the few concrete things I took away from this event. (Plain English translation in italics.)

  • The “no spy” treaty is a non-starter. Instead, Steinmeier wants to have several rounds of talks between U.S. and European officials, which should cover both eavesdropping on government leaders and large-scale surveillance of general population. These talks should include civil society and academia. (We know that’s kind of embarrassing, but what are we gonna do? Nobody wants to kill TTIP because of civil rights.)
  • On the choice to spy: the U.S. government should realize that their surveillance/ spying practices are inappropriate in a setting of close partnership. It must be made clear that democratic bodies have the last words rather than corporate or intelligence interests. (Please be a little bit nicer, for old time’s sake, OK?)
  • Europeans and in particular Germans are committed to show more leadership in foreign policy (“expand the toolbox of diplomacy”). As head of the G8 group in 2015, Germany will push for climate change politics. (But please don’t mention Syria, because we really don’t know what to do.)
  • On Europe: Between Germany and the UK, fundamental disagreements remain about the general trajectory of EU integration. We might see more subsidiarity in select issue areas, but no reversal of integration. (Those ***** Brits! As if we didn’t have enough problems already. Oh, and maybe we should tweak those austerity policies in Southern countries, but please don’t ask about specifics).
  • While the Russian human rights ombudsman Vladimir Lukin played in a constructive role in the talks with German, French, Polish FMs last week, Steinmeier is just as puzzled about Crimea as everybody else. (Nobody knows what’s going on in Ukraine, and even if we knew, we probably couldn’t do much about it. It’s not like we’re a  superpower or anything.)

So, as you can see, no grand commitments or surprise announcements were made today. German foreign policy remains, ahem, underwhelming.

Mathis Lohaus

Links: ISA and Blogging, Munich Security Conference, and much more

isa-vs-wp

Last week, Steve Saideman kicked off a debate after the International Studies Association’s Executive Committee proposed to adopt a policy that would ban editors of the ISA’s official journals from blogging. Several people involved in blogging and/or official ISA business have commented at Steve’s blog. (Nobody called it “lex Nexon”, though.)

Here is another post on why banning blogs is a bad idea. Burcu Bayram has a post on how blogging is useful for young scholars in particular. As immediate reaction to the “ignorance about social media and its role in 21st century IR scholarship and teaching” expressed in the proposal, Steve and others are now planning to create the ISA Online Media Caucus.

Meanwhile, it seems that the ISA’s Governing Council will not implement a ban:

If a vote was held today on the initial proposal, I am pretty sure that we would win.  Of course, if I felt that there would be such a vote, I would do some more work to be sure of it.

The 50th Munich Security Conference is over now, but you can watch many videos of the panel discussions on the conference website (just scroll down past the “highlight” clips).

I agree with Tobias Bunde and Wolfgang Ischinger that U.S. and European members of parliament should cooperate to curtail NSA surveillance and other violations of civil liberties.

Our colleagues at Bretterblog have collected some links [in German] with critical comments on the MSC as well as new developments in German foreign policy.

In other news, I recommend the following items from the (IR) blogosphere:

Mathis Lohaus

Links: Elections, Constitutions, PhDs, Instability, and Teaspoons

The teaspoon population in the author's research center
The teaspoon population in the author’s research center

Mark Kayser and Arndt Leininger sum up the results of their German election forecasting model and compare it to others. They had predicted a share of 47% for CDU/CSU and FDP (very close to the actual 46.3%). But they also point out that it’s much harder to predict the stability of coalitions…

Our model drew on previous election outcomes, characteristics of the government and of voters and, most originally, the relative economic performance of Germany in comparison to the two other most important economies in Europe (…). Our model fared at least as well as traditional polling, making us optimistic about the future of forecasting elections in general and forecasting German elections in particular.

The Comparative Constitutions project has launched a great new website called “Constitute” allowing everyone to get to know constitutions from all over the world. You can browse by country or by topic, but it seems that older versions are not included (via Monkey Cage).

Henry Farrell compares the controversy about the analyst Elizabeth O’Bagy to the case of former German defense minister Karl-Theodor zu Guttenberg, who had to resign in Germany (for plagiarism in his dissertation), but now works at a respected D.C. think-tank:

O’Bagy’s academic credentials were crucial to her status as an ‘expert.’ When these credentials exploded, so did her career. Zu Guttenberg’s value rests not on his purported academic training, but on his past political role and current political connections.

Jay Ulfelder argues that we live in a time of systemic instability, which is only inadequately captured by observers that stick to a perspective where “countries are a bit like petri dishes lined up on a laboratory countertop”. So we ought to think harder about connecting the dots between state failures, increasing piracy, the financial crisis, food prices, and long-time cycles of social unrest (which look slightly esoteric to me)…

…and since it’s Friday: Please make sure to read this research paper on the fate of teaspoons placed in the communal rooms of university research labs (via MR).

56 (80%) of the 70 teaspoons disappeared during the study. (…) The half life of teaspoons in communal tearooms (42 days) was significantly shorter than for those in rooms associated with particular research groups (77 days). The rate of loss was not influenced by the teaspoons’ value. (…) At this rate, an estimated 250 teaspoons would need to be purchased annually to maintain a practical institute-wide population of 70 teaspoons. (…) The loss of workplace teaspoons was rapid, showing that their availability, and hence office culture in general, is constantly threatened.

Sören Stapel

Links: German elections, grad student advice, IL/IR symposium, O’Bagy

Election Day in Germany is on Sunday. Yesterday was the information event for my tasks as a poll worker on Sunday. As we all know, Germans are said to be very organized and efficient, but can be harsh. This event proved the rule. And I feel like making fun about one specific disadvantage of being German:

German elections and forecasting

Back to serious issues. A few weeks ago I somehow lamented about the state of forecasting Germany’s federal elections in 2013. Sadly, I wasn’t aware of Kai Arzheimer’s work. In the mid of August, he has launched a series of blog posts on forecasting the German elections and some follow-ups here, here, here, and here. But you could also have a glance at his code and data for replication or just visit his blog in general which is very entertaining.

He also has a piece in the online edition of Al Jazeera on Germany’s elections, the EU, and the future of the Euro.

The European Council on Foreign Relations is currently running a great series looking at how the German elections being viewed from by other EU partners. So far, the series covered Poland, France, Italy, Bulgaria, Britain, and Spain.

Scholars from the Social Science Research Center in Berlin (WZB) have looked at party manifestos of all German federal elections. Their data is now available and they have published some at the Democracy & Democratization blog. See also their introduction to the Manifesto project. The online edition of the newspaper Die Zeit also presented some of their findings (in German). The base line is: political parties differ on many issues in their party manifestos and there is a general turn to the left regarding both economic and socio-political dimensions (less market-oriented and more progressive). But, of course, exceptions prove the rule. Continue reading

Mathis Lohaus and Sören Stapel

German Foreign Policy Bingo

fp_bingo

On Sunday, September 1st, all major TV channels in Germany will broadcast the first (and only) “duel” between Angela Merkel and her challenger in the upcoming federal elections, Peer Steinbrück. As we have criticized in a previous post, both are not exactly known for their visionary positions on foreign policy.

Nonetheless, we will make sure to watch the show. In particular, we’ll pay close attention to any mentions of foreign policy and international affairs.

And to make things more interesting, we suggest you gather a group of friends for a round of “German foreign policy bingo”! We’ve come up with 24 topics that could be featured in Sunday’s debate and created a set of randomized bingo sheets. Please download, print, and share them with your friends:

German Foreign Policy Bingo [PDF with 12 sheets]

PS. For added fun, turn this into a drinking game! Take a shot for every topic that is mentioned, and prepare a bottle of champagne for the lucky winner (in case the candidates actually talk about foreign policy enough to fill a row on the card).

PPS. Think we missed an important topic? Just create your own version (and share it in the comments if you like)! Our word list for convenient copy & paste: Continue reading

Sören Stapel

Elections in Germany: Forecasts and Polls

The election campaign in Germany is about to gather speed with less than 30 days left until election day. I assume we’re going to cover that in more depth soon, too. For now, I can direct you to the Hertie School’s Expert Blog on the German Federal Elections in 2013 in case you have not checked it out yet. They cover a plethora of topics from labour market policies and the German Energiewende to gender equality and family policy.

So let me do the kick-off for some posts that will appear on this blog over the next couple of weeks. Yet, this is not about politics but looks at polling and forecasting in the German case, thereby briefly touching upon some of the recent trends of the German political landscape. I will point out some of the flaws of both polling and forecasts. However, don’t misread the point: I’m not against polls and forecasts as such and have lots of fun following the respective discussion throughout the year. But we should not overemphasize these results, either, as both do not come without problems.

Continue reading