The End of the German Miracle

Howard Davies at Literary Review:

Kaput is about the problems facing Germany rather than the successes of the UK. Münchau (the clue is in the umlaut) is very pessimistic about his native land. It can do little right, in his view. In the German version of Winnie-the-PoohPu der Bär, he is I-Aah, the gloomy donkey. But I-Aah often has a good point to make, and so does Münchau.

The core of his argument is that the German economic model is broken. How so? Let me count the ways. For decades it has been built on engineering excellence driving exports of manufactures, particularly cars and machine tools. Now that Germany’s Asian rivals have enhanced their productivity, that model increasingly depends on access to cheap energy. The Germans placed two large bets to sustain this model. The first involved establishing a warm and cuddly relationship with Russia, an approach pioneered by the former SPD chancellor Gerhard Schröder, whose ties with Putin were (and indeed still are) remarkably close, and sustained by Angela Merkel.

more here.

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