Germany’s sectoral decline and its obsession with fiscal austerity

I am currently researching statistical and textual material as part of my plan to produce an updated version of my 2015 book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale (published May 2015) – to take into account the pandemic, Brexit and other major changes that impact on Europe’s position in the world economy and the internal shifts within Europe itself that will make it even more difficult for the Member State nations to maintain their material living standards. My publisher (Edward Elgar) is keen to push this project on. As part of this work I have been examining changes since 2015 across various European states. Today, I discuss the decline in Germany’s fortunes that has arisen as a result of a combination of circumstances: an obsession with fiscal austerity; the suppression of domestic spending capacity; the unrelenting promotion of the so-called ‘export-reliant, manufacturing-heavy economic model’; the election of Donald Trump; and the maturing of the Chinese economy. German politicians, particularly, have become so caught up in the ‘Schwarze Null’ ideology that they have failed to anticipate the medium- and longer-term consequences of their actions. These consequences were all laid out in my 2015 book but policy makers have generally ignored any criticisms of the ‘German model’. Now the chickens are coming home to roost. Fast. And it spells bad times for Europe.

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