GER politics thread

[Jimbuna]

World will never recognize attempts of Russian Federation to occupy territory of Ukraine, - Sholtz

The world did not recognize Russia’s annexation of Crimea eight years ago, nor does it recognize attempts to annex new Ukrainian territories.

Chancellor Olaf Scholz of the Federal Republic of Germany stated this while addressing the participants of the second summit of the Crimean Platform, Censor.NET informs with reference to Ukrinform.

"The international community will never accept Russia's illegal imperialist annexation of Ukrainian territory... We condemn Russia's attempts to forcefully integrate parts of Ukrainian territories. Our message is clear: any shameful referendums and other attempts to change the status of parts of Ukrainian territory will never be recognized," - emphasized the German politician.

He noted that "such steps will make any negotiations impossible."

Russia's unprovoked and unjustified war of aggression against Ukraine has met with strong opposition from the Ukrainian people, whose determination and courage are respected around the world, Scholz said.

Ukraine, as he noted, refused to submit to the rule of the strong, a situation where large powers can "swallow" smaller ones whenever they want.

The Summit of the Crimean Platform demonstrates that Ukraine's partners are more united today than ever, Scholz is convinced. He called the holding of the summit more than timely and reminded that today the world commemorates the victims of Stalinism and fascism. Source: https://censor.net/en/n3362630

[Skybird]

FOCUS summarises well what I am complainign about all the time in the German management of the gas crisis. Maximum incompetence at work. And plenty of ideology. BTW, after Quatar (zero deal) and Norway (small deal increase) now Canada had to let down the Germans' and their hopes to drastically increase gas delivery rapidly. All that the German got from Trudeau is long-termed intentions declared in a paper. I know there were plenty of smiles exchanged and plenty of friendly words, but thats what it comes down to: a declaration of intention for - of course: green - hydrogen being produced and shipped at some years away in the future. Insiders say since the production sites and shipping facilities and transpüortaiton capcities needs to b e build first. we are talking about a future 5 to 10 years away - minimum.

Also, the Germans invest again into making themselves exclusively dependent on others. Everythign is better, in German eyes, than to produce the power right where it is needed, which from a standppoint of physics and economics by far would make the most sense. Its an giant energy waste just to get some net energy in return. How very green!


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Three gas mishaps by our government stun even experts

The desired effects of the gas levy are neutralized by the reduction in VAT. The revenue from the instrument ends up with the wrong people. At the same time, ever scarcer gas is being used to generate electricity in unprecedented quantities. What is going wrong in the traffic light coalition?

The traffic light coalition in Berlin no longer has a grip on the issue of gas supply in Germany. There's no other way to explain the string of mishaps and inconsistencies that gas customers are currently having to pay for. This is the verdict of many economists following last week's numerous decisions on the subject. The political opposition continues: Union leader Friedrich Merz speaks of "chaos with announcement".

In fact, the traffic light government has made three mistakes that show it is not using the right instruments to deal with the crisis.

Mistake number 1: Gas surcharge up, VAT down

Mistake number one is the combination of a gas levy, which Economics Minister Robert Habeck announced as unavoidable last Monday, and the reduction of VAT to seven percent for gas, which Chancellor Olaf Scholz promised two days later.

So gas is first made more expensive, which encourages consumers to save gas. Then it is made cheaper again and the effect fizzles out. Economists are perplexed by so much actionism in the German government: Stefan Kooths, vice president and head of the Kiel Institute for the World Economy (IfW), notes that the VAT decision "dilutes an essential desired purpose of the gas levy: to save gas."

Marcel Fratzscher, president of the German Institute for Economic Research (DIW), thinks that the reduction of the value-added tax for low-income earners is better than nothing, but still far too little. "Much better are direct transfer payments, such as an energy allowance, of 100 euros per month & person for households with medium and low incomes," Fratzscher writes.

Jens Südekum, professor of international economics and member of the Scientific Advisory Board of the German Federal Ministry for Economic Affairs and Energy, advocates letting price signals take full effect and cushioning them with socially graduated income transfers. And Ifo President Clemens Fuest sees one main problem with the measure: private households would be relieved, but companies would be burdened because they would only pass on the VAT to their customers. "I'm not sure that's what the government intended," he wrote on Twitter.

Glitch number 2: The billions from the gas levy flow to the wrong people

In the future, German gas customers will pay billions of euros with their gas levy to domestic and foreign corporations that are doing just fine without this revenue. This emerges from a report by Trading Hub Europe, the company that ultimately organizes the levy on behalf of the Ministry of Economics.

Trading Hub published a list of eleven companies on Monday. In addition to the Düsseldorf-based utility Uniper, which is already known as a beneficiary, is financially shaken and is already being supported by the state, for example, the Baden-Württemberg-based EnBW, the Austrian OMV and the Swiss Axpo are among the likely recipients of the money.

EnBW expects to make billions in profits this year despite rising energy costs, recently increased its dividend and is enjoying a share price that has risen nearly 30 percent since the beginning of the year. Nevertheless, its subsidiary VNG, a gas trading company based in Leipzig, has applied for money from the gas levy.

Another example is the largest Austrian group listed on the stock exchange: OMV. As an energy supplier and petroleum company, OMV has benefited greatly from high oil and gas prices, more than doubling sales and profits in the first half of the year.

Swiss energy supplier Axpo also wants money from German gas customers. It is currently suffering a little from the energy crisis, but at a high level. The half-year figures were not as brilliant as in the past, but a profit of around half a billion Swiss francs remained at last.

Group CEO Christoph Brand speaks of a "good result in stormy times. To keep it that way, he is apparently now tapping German gas customers. Habeck had described the gas levy as "the fairest way to distribute the additional costs among the population." The fact that the money is now going to high-earning corporations contradicts this assessment.

Breakdown number 3: Gas used en masse to generate electricity

In May and July, more gas was burned in Germany to generate electricity than ever before. This admission by the Federal Network Agency, which is subordinate to Economics Minister Habeck, must be seen as a mockery by people who will soon be spending hundreds of euros extra for a warm apartment. They are being told that gas has become a scarce commodity. One that has to be bought at a high price, that will continue to be indispensable for heat generation for a long time to come, and that people urgently need for heating and industry for firing and production.

That's why gas storage levels are currently published somewhere almost daily, just as Corona case numbers were in previous years. The message behind it: The weal and woe of industry and private households depends on it in winter.

If more electricity is needed than can be supplied by renewable energy, coal and oil-fired power plants, but gas is needed elsewhere, then the nuclear power plants that reliably produce electricity should continue to operate. However, the Greens in the traffic light government do not want to know anything about this. What is clear is that the energy debate is ideological.

[August]

[Skybird]

FOCUS on Robert Habeck:


Between rhetoric and substance: Habeck's 5 crucial mistakes

Robert Habeck, Germany's Economics Minister, never fails to impress with his rhetoric. But the substance behind it currently fails to live up to the promise of his rhetorical style.

Robert Habeck is an exceptional rhetorical talent on the Berlin stage. He doesn't use the thin linguistic wood of the others, who fill entire speeches with their prefabricated components. His language is vivid, often earthy and therefore vital. He has a sense of rhythm. He wants to convince, not overpower. He sometimes lets people watch him think.

But just as on the executive floors of business, a strict distinction must be made between substance and style in politics. And it is precisely with substance that Robert Habeck's delivery problems begin.

Language does not automatically transform into a high political product quality. Robert Habeck's substance does not currently deliver what his pop-art style promises. If you strip away the rhetorical packaging, you'll notice the technical quirks and intellectual errors:
Exciting, but no time right now?

1. naiveté in Qatar

It was unparalleled naiveté to rely on the verbal promise of the Prince of Qatar. Habeck's trip to the Orient has brought no relief except for the unflattering kipper image for German electricity customers. The videos that Habeck sent from there ("I launched a new energy partnership in Qatar") seem like satire today.

2.Gas customers are turned into perpetrators

For decades, the Greens upheld the polluter pays principle, only to betray it in the hour of government participation. Most of Germany's 21 million gas customers were forced to connect to the gas grid when they bought their new properties or live in rented apartments that were connected to the gas grid decades ago without their involvement. They are not perpetrators, but victims. The minister wants to charge them 34 billion euros.

3. tax collection through gas levy

The original attempt to garnish this levy with a value-added tax surcharge and thus turn it into additional revenue for the state was lucrative for the state and brazen for the citizen. Anyone who believes that this was an error on the part of the ministerial bureaucracy, as Habeck later claimed, is underestimating the precision work of the state. If there's one thing the state knows how to do, it's tax collection, which, in the words of Peter Sloterdijk, "presupposes the tax tolerance of the giving side as a premise."

4.Gas customers should buy gas suppliers' increased world market prices

Habeck's idea that gas customers should take the risk of increased world market prices off their gas suppliers is already absurd as an idea. In the same way, bank customers would have had to bail out financial institutions during the financial crisis by paying a surcharge on their checking accounts. And in the Greek crisis, a state gyros fee plus an ouzo levy would have been due.

But the gyros lover and the ouzo drinker have as little to do with the mismanagement of Greece as the gas customer has to do with Putin's war and the explosion in gas prices. This is precisely why the ouzo levy never existed, not even as an idea.

5. rejection of continued operation of nuclear power plants

Robert Habeck justifies his rejection of the continued operation of the three nuclear power plants still in operation with an untruth that remains an untruth even if it is constantly repeated by him. "We have a gas problem, not an electricity problem," Habeck says. The phrase also found its way into the repertoire of the energy minister and vice chancellor in the variant "We have a heat problem, not an electricity problem."

Both are wrong: The gas shortage is already making the price of electricity more expensive, because gas is not only used in the heating market, but also to generate electricity. If all three nuclear power plants are taken off the grid at the end of the year - as Habeck wants - there will be an electricity shortfall of six percent of current consumption. The demand cannot be covered by sun and wind alone, which is why gas, which is already in too short supply, would have to be used to generate electricity again.

Conclusion: The well-behaved citizen still follows the word acrobatics of the Minister of Economics and the state-organized rolling grab into the pockets of gas customers with stoic composure. He pays and he suffers. He grumbles, but he does not revolt. The philosopher Peter Sloterdijk had a hunch: "The resignation of the citizen is the basis of sound public finances."

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There are reports that secretly now the ministry of Habeck has started to plan for an extension of nuclear energy. Even if later this year the extension would come - and that is absolutely uncertain - it would cost Germany dearly, since they could run in reduced mode only due to their almpost burnt out fuel. If the Greens would not have blocked the idea for half a year, and listened to the industry that said in early April they could get, if need be, nuclear fuel within 6 months instead of Habeck's claimed "12 months minimum", then these three reactors could run with full load from Octobre, November on. Further, three nuclear powerplants that were taken of the net last year, are in a condition that they could still be reativated, their fuel rods are still inside the cores and techncial analysts checked the installations and said they are ready to go - they could have been connected to the grid before winter, too.

The ideological fanatism of the Greens and some SPD blokes costs Germans and the German state finances dearly, so dearly. What did I quote Richard von Weizsäcker with recently? "The political parties have made the state their prey."

It continues with another folly, the gas Germany has in its Northern regions - but stubbornly rejects to make availabe for extraction. Yes, it would not solve the issues we have this winter, but in the long run it would. That gas could keep us floating on deep into the next century. But "No!" - it shall not be. Its against the ideology.

Its mad, mad, mad that the Germans want everything at once: jumping off nuclear, coal, oil and gas alltogether - without having sufficient replacement energy. Renewables do not do the job, and never will do the job. Even more, the warming of climate may reduce wind intensity, we see that with the rain desasters we have: these happen because the weather zones do not move fast, but creepo along, even come to a standstill in a region which then gets all its load. We have had that in Münster 2014, when the whole city drowned: three supercells stayed in place over the city and united their force and did not move at all, for hours, and so we got 200-240l of rain per sqm within less than 2 hours. And similar phenomenons we have seen in other places since then, too. When the air gets warmer, the winds may reach extremes during storms - and in the normal times inbetween blow much lesser. What is it then with the windmill energy production, eh? The Gulf stream weakens, too, the changing temperature patterns may influence weather, too, predicting harsher winters - and more clouds and so less solar panel produced power. Add to this the lacking storage capacities. Right now Germany has enough storage capacity for running its powergrid for around 30-50 minutes. A "Dunkelflaute", a time of lacking wind and sunlight, the experts define as such a period of time lasting 7 days and longer - and we have that 2-5 times per cold season, tendency growing. Doing some math tells you that Germany would need to increase its battery capacity by a factor between 200 and 300 - and be able to charge these up ! And that covers a wind-and-sun timeout of 7 days only. What if it lasts longer?

Die Deutschen spinnen. Dümmer als die Polizei erlaubt.

[Skybird]

FOCUS on the government' recent financial "presents":
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Nine reasons why the savings package of the traffic light coalition is not received by citizens

All in all, the savings package of Chancellor Olaf Scholz's (SPD) traffic light coalition looks very powerful. Nine reasons explain why citizens will not get anything out of it in the end.

If you want to understand the different division of tasks between politicians and journalists, you basically only have to remember two words: Truth and effect.

The good journalist looks for the truth, including the one behind it. In doing so, he does not use, to pick up a nasty word from the NDR editorial board, the "political filter."

The politician, on the other hand, always aims for effect first. If the truth helps him do that, so much the better. But it is not a necessary condition for his advancement. As a rule, he puts a party-political filter over the truth - until it begins to glow red, green or yellow.

Which brings us to the word relief package. Linguistically, an orgy of relief has been celebrated for weeks. Relief packages I and II - together 30 billion euros - were followed yesterday by relief package III (65 billion euros). The finance minister called it "massive", the chancellor "precise and tailor-made".

And indeed, in the relative world of politics, this is a relatively high sum. At least it can be used to achieve a media impact.

Austerity package? No citizen will be relieved - unless he stops filling up his tank and heating his home.

In the real world, however, i.e. in the world of car drivers, shareholders, savers, life insurance policy holders, workers and employees, househusbands and housewives, gas, electricity and oil customers, this is a relatively small sum that evaporates in the wallet faster than a summer rain in times of drought.

Within the next twelve months - and this is a bold claim - not a single German citizen will see a net reduction in their tax bill unless they stop heating, refueling, shopping, working and, best of all, breathing.

The uncomfortable truth is this: The force of the economic dislocation is more violent than the government's capabilities. The government, which is trying to save the day here, cannot have a lasting effect on people's everyday lives in the face of the elemental economic forces of inflation, stock market crashes, energy shortages and the consequences of a stubborn pandemic.

One-off payments of a few hundred euros will have no effect

1 Real wages and thus also the purchasing power of pensions are falling at high speed. In the second quarter of the year, the Federal Statistical Office calculated a price-adjusted wage decline of 4.4 percent in view of high inflation. For the current year, the Institute of Economic and Social Research predicts a real wage loss of 3.6 percent.

This means that the purchasing power of all blue- and white-collar workers - if the sum of all gross wages in 2021 is taken as a basis - will decrease by 56.2 billion euros. The average wage earner (49,200 euros in 2021) will lose around 1,800 euros.

This can only be remedied by wage increases that at least compensate for purchasing power. One-off payments in the order of 200 or 300 euros - as now announced - will not have any effect here.

The state itself continues to drive up the burden

2 The state itself - which pretends to relieve its citizens - is driving their burdens to ever new heights. On Sundays, it relieves the burden, and on weekdays it collects the money. The gas levy alone, which is supposed to bring in 34 billion euros, halves the effect of yesterday's relief package.

Energy will become noticeably more expensive even without the gas surcharge

Even without the gas levy, a noticeable increase in the price of all types of energy is to be expected. Many gas suppliers have already raised prices. According to Check24 the average gas price for new customers is 185 per cent higher than in the previous year. Electricity costs have increased nevertheless by 31 per cent. At the gas stations one hardly believes its eyes. And: The big rollover of the global energy price explosion to the end consumer is still to come.

We are learning that no state in the world can reimburse its customers for what an energy market that has come apart at the seams is demanding.

The state is relieving itself, but not us.

4. 19 percent value-added tax on all inflated goods is another factor. This also reduces prosperity. 19 percent of 100,000 euros is 19,000 euros. But 19 percent of 120,000 euros is about 23,000 euros. In this way, the state earns a share. It relieves itself, but not us. In the first half of 2022, the state collected 17.6 percent more taxes than in the same period last year.

Stock market losses reduce German prosperity

5 The stock market is buckling under the pressure of events. In 2022 alone, investors in the Dax, including many ordinary citizens and their insurance companies, have so far had to absorb a loss in value of around 270 billion euros. This money is gone not statistically, but in very real terms. It reduces the capital income and thus the prosperity of the Germans.

Riester pension serves deliberate impoverishment, not capital formation

6 Without exception, all pension products designed by politicians are not convincing in the current situation. The guarantee given by the legislator of a repayment of the contributions made - for example in the case of the Riester pension - leads to the obligation of fund managers to invest in conservative financial assets. But with conservative investments, progressive inflation cannot be beaten by definition. This means that in the current situation, the Riester pension serves to deliberately impoverish people, not to build up capital.

Even life insurance policies no longer bear fruit in a crisis situation

7 Life insurance policies also bear no fruit in this situation. They are also obliged by law to buy government bonds and the government bonds of reputable states cannot compensate for the high inflation rates. Allianz SE's performance reflects the current unattractiveness of its products and the market's expectation that many people will cancel or let their life insurance policies lapse. Europe's largest insurance company therefore lost around 18 percent of its value, or a good 12.6 billion euros, in 2022 alone.

8 At the bottom of the food chain lives the German saver, who is being punished first with negative interest rates and now with minus interest rates for his savings activity. As long as the interest lies below the inflation rate, it comes with it to the loss of value. The experts of the specialist portal Tagesgeldvergleich.net calculated that from January to June 2022, German savers had to cope with a loss of purchasing power of 93.3 billion euros due to rising inflation and low interest rates. By the end of the year, they will have lost a total of 186.6 billion euros, which means a loss of purchasing power per capita of 2,140 euros.

Real estate sector also affected by crisis

9 The real estate market - even if many had hoped otherwise - cannot decouple itself from this development in the long term. It is running out of solvent customers, which is why almost all experts assume that purchase prices will soon fall throughout Europe, thus also reducing the value of existing properties.

Conclusion: The 65 billion package will at best change the perception of reality, but not reality itself. The government has yet to have a serious discussion with its citizens about the depth and duration of this economic and social turnaround. For this dialogue, the government does not need money, but courage. Or as the great British storyteller William Somerset Maugham used to say, "Sincerity is the boldest form of bravery."

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[Skybird]

Germany fiscally petrifies. FOCUS writes:
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Spending spree with consequences: The federal government's latest relief package is once again merely a reaction to present-day problems that make it virtually impossible to think properly about the future. Fiscal petrification has long since begun.

The favorite word of all politicians is future. The future must be conceived, secured and shaped. The parties are happy to hold congresses on the future, adopt programs for the future and, in Jürgen Rüttgers, the CDU/CSU already had a minister for the future in 1994.

But as soon as they reach high government office, politicians dive into the problems of the present, never to emerge from them again. The "desire for the future" (CDU) ends in a major self-discharge time and again.

Present problems make thinking about the future impossible: "State loses ability to act"

An important group of voters always has to be quickly reassured, given presents or - as in these days - relieved. With great regularity, the political focus changes - until the future is barely recognizable because of the present. The greed for the moment , to speak with Ingeborg Bachmann, means in reality a continued consumption of the future. The hallmark of the modern state is its eternal need.

The shift in emphasis from the future to the present can be read in detail in the state budget. Social politicians of all parties tell people that there is enough money for everyone. People don't have to make an effort, just tuck in their shirts like starlets. Anyone who doesn't let the state subsidize their house, car, solar system, childbearing or even their pension hasn't understood the game.

This "maternalistic paternalism and care machine" (Peter Sloterdijk), constituted by all parties as a joint venture, means that the normal federal budget has hardly any money left for investments in the future. A large part of the budget, in fact about 90 percent, is "fossilized" , wrote the Federal Audit Office in its report on the 2023 budget: "As petrification progresses, the danger grows that the state will lose its ability to act."

The spending spree set in motion once again by the 65-billion-relief package, the core of which is the handing out of bad checks, will lead to further petrification. Sloterdijk sees a latent social democracy at work here that goes beyond the party of the same name because it is more or less irreversibly built into the procedures of modern statehood.

Germany does not abolish itself - it petrifies

Here are the facts that did not play the role they deserve during yesterday's presentation of the 2023 federal budget by the Ministry of Finance. Whereby Christian Lindner - it should be added to his credit - is not the inventor of fiscal petrification, only its executor:

By 2040, spending on age-related projects alone will explode to 282 billion euros annually.
Already today, taxpayer subsidies to a pension system that has become dysfunctional amount to 112 billion euros.
Unless the trend is reversed, employees will soon have to transfer half of their income to the welfare state
The draft budget does not reveal the true state of federal finances, says the Federal Audit Office:

"The shifting of expenditures and debts to special assets as well as accounting practices distort the picture. At around 78 billion euros, real net borrowing is four times higher than shown in the federal budget."

Austerity package? No citizens will be relieved - unless they stop filling up their tanks and heating their homes

The room for maneuver in the federal budget will now shrink further with each interest rate policy decision by the ECB. Already today, the ECB's Executive Board is set to discuss the next interest rate hike. Rising interest rates also mean more spending for the federal government.
Lindner speaks of a "steep wall" that is building up. For 2023 alone, he has budgeted around 30 billion euros to service the debt that has recently accumulated.
Investments - and these are the only expenditures that are intended for the future - remain constant at between 51.1 and 52.1 billion euros. This corresponds to a share of around twelve percent of spending. Whereby this spending for the future also includes social housing, federal road construction and other self-evident items.
88 percent of the budget volume is effectively withdrawn from changes in the budget formulation process because it relates to statutory entitlements such as social benefits, personnel expenses and precisely pension commitments.

Conclusion:

With the financing of a permanent present, the eternal chalk era continues to reign in schools, Germany's largest transport company remains a Bimmelbahn and the digitization of the administration will not be able to start until the 22nd century. Germany is not doing away with itself, as Thilo Sarrazin once predicted. It's just quietly fossilizing away.

[Skybird]

FOCUS has this interview. H.-W. Sinn is a wellknown economist and longterm warner in Germany.
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Star economist Hans-Werner Sinn, former president of the Ifo Institute, has been warning of inflation for years. Now it's here - and our prosperity is at risk. A conversation about mistakes made by the ECB, errors in climate policy and the culprits behind Germany's decline.

Professor Sinn, war, inflation, a weak euro - is our prosperity in danger? How alarmed should we be?

Hans-Werner Sinn: Quite. Because while the euro crisis was a competitive crisis for the southern European countries, in which Germany came out quite well, this is now a crisis that is massively calling into question the business model of the Federal Republic of Germany, and which at the same time is reminiscent of social upheavals in the past that were caused by inflation.

The hyperinflation of 1923 is approaching its 100th anniversary. Are we facing something similarly threatening?

Sinn: No, there's no question of that, it's not that bad. But, of course, the principle of "nip it in the bud" applies. Every inflation starts small if you don't fight it.

The ECB has long denied demonetization, but at the central bankers' meeting in Jackson Hole at the end of August, Director Isabel Schnabel sounded for the first time as if she had recognized the seriousness of the situation.

Sinn: Yes, Ms. Schnabel has done an about-face after having massively downplayed the dangers of inflation for a long time. As recently as November of last year, the ECB leadership was still talking about a mere inflationary base.

Has the European Central Bank now realized that decisive action is necessary?

Sinn: I have my doubts about that. The forces in the ECB that do not want to act to a sufficient extent are still in the majority, I would argue.

Do you feel a certain satisfaction that you were right in your warnings about inflation, for which you were dubbed a populist and worse?

Sinn: No, I can't take any pleasure in that; the situation is bad enough. I have no illusions about the sluggishness of the public cognition process; I didn't have them before.

Are you afraid that the ECB will not raise interest rates rapidly enough?

Sinn: Indeed. We have been experiencing a stalling tactic since last summer. While the Anglo-Saxon countries announced a turnaround in interest rates early on, the ECB tried to prevent it and talked the issue down. We are now feeling the consequences: there has been a significant movement of capital from Europe to America, where higher interest rates were previously expected. This has appreciated the dollar and devalued the euro, by more than 20 percent, leading to a similarly large inflationary push in goods and services purchased on the world market, including energy.

The ECB has made energy imports directly more expensive. Its policies may be fine if you represent the interests of over-indebted eurozone countries, because inflation devalues their debt and low interest rates keep the nominal debt burden down. What the ECB did, however, was not a policy in the interest of the community of euro countries and certainly not a policy that was in line with the Maastricht Treaty mandate to establish price stability.

Now the ECB is trapped: If it heartily raises interest rates in the fight against inflation, it will drive us straight into recession. An unresolvable dilemma.

Sinn: No, I dispute that. This argument stems from a widespread error in thinking. We are in a stagflation, a situation where the constraint on economic activity comes not from the demand side but from the supply side - specifically, from the Corona-related lockdowns and quarantines. These continue to tighten supply to this day.

On the world's oceans, shipping traffic has still not returned to normal, with freighters idling by the thousands off South China ports, unable to unload their cargo and unable to take on new cargo. This will eventually resolve, but for the time being it means that manufacturing companies cannot get their inputs from China and then cannot deliver them either. On top of that, oil and gas supplies have also been tightened. So overall, there is a lack of supply, not demand.

In such a situation, a restrictive monetary policy dampens inflation because it raises interest rates and weakens demand for credit and thus for goods. But it does not dampen real economic activity, because firms can no longer deliver anyway. That's why there's no justification at all for a low-interest-rate policy like the one the ECB is still pursuing. his

You're saying the ECB could easily raise interest rates without plunging the country into recession?

Sinn: That's right.


Then it might as well raise interest rates by 0.75 percentage points at the next Council meeting?

Sinn: Yes. Especially since even then interest rates would be strongly negative in real terms, given eight percent inflation. We are still a long way from having a braking effect on real economic activity.

To reiterate: You blame the ECB for high gas prices, not Putin and the war?

Sinn: No, it's not that simple. The euro devaluation that followed from the ECB's policy immediately increased the prices of liquefied gas, which are mostly quoted in dollars, on the international markets once they were converted into euros. That in itself could not have changed the price of gas in Europe under normal conditions.

However, because of the shutdowns by Russia, liquefied natural gas has now become the marginal energy source in Europe that determines prices. The devaluation, for which the ECB is responsible, has increased the price of gas in Germany via the liquefied natural gas market.

And how did it happen that we are so dependent on Russian gas, which was once so cheap? Has economic calculation produced political naivety?

Sinn: No. The energy crisis in connection with the Ukraine war would not have assumed this scale if Germany had relied less on gas and more on coal and nuclear power. The fixation on gas is a direct consequence of the green energy transition. Many overlook this.

"I can only marvel at how easily the German people have allowed themselves to be seduced into unrealistic reveries"

The prevailing opinion claims exactly the opposite: if we had relied on renewables earlier and more radically, we could care less about Putin's pipelines.

Sinn: Unfortunately, that's not true. Many people think that the more wind and solar energy we use, the more conventional power plants - be they coal-fired, gas-fired or nuclear - we can decommission. In fact, fluttering green energy needs conventionally generated power to fill the many long dark lulls.

When the wind isn't blowing and the sun isn't shining, we still need electricity. And we need more and more of it if traffic is also to become electric and houses are to be heated with heat pumps. If we triple or quadruple electricity production in Germany, as would be necessary to fulfill all the new tasks, we would also need three or four times as many conventional plants for the dark periods, regardless of how much electricity we can generate from wind and solar power in favorable weather conditions.

It also makes a significant difference whether consumers take showers or a bath in the tub - because that really costs money: Since three times more water is needed for a bathtub than for a shower, bathing is also three times as expensive. Assuming that the bathtub is only used as a relaxing addition to the shower and a consumer only takes a bath once a week instead of twice a week, he could directly save 46 euros in electricity costs per year.

After showering or bathing, women in particular often blow-dry their hair. Many of them probably don't know that the hair dryer is an absolute power guzzler. A comparison makes this clear: for ten minutes of blow-drying hair, an LED lamp can burn continuously for 83 days. So if you let your hair dry for as long as possible before blow-drying and then blow-dry it for just five minutes instead of 15, you'll end up paying 20 euros less on your annual electricity bill.

All this is nothing compared to the number one power guzzler in many German bathrooms: There you will find a washing machine, which accounts for 15 percent of a household's total electricity consumption. It all depends on the appliance itself: If the machine is more than ten years old, consumers are wasting a lot of energy unnecessarily.

Newer machines that have, for example, a so-called Eco program (energy-saving program) or work with a fuzzy logic in which the machine independently adjusts the amount of water to the weight of the clothes - often have ratings between A+ and A+++. These grades provide information about the energy-saving friendliness of the machine in question. If consumers replace their old machine with a new one, they can save 24 euros a year in electricity costs.

Since coal and nuclear power are to be phased out, this leaves only gas-fired power plants to produce electricity during dark periods. A huge, disproportionately large increase in capacity was planned for them, without this ever being made public. In this way, the planners responsible for the energy turnaround handed us over to Putin. Putin has let the energy transition collapse like a house of cards.

Energy economists like Claudia Kemfert from the DIW do not accept the argument that green energy cannot be stored.

Sinn: We will not succeed in storing the necessary seasonal weather compensation in the foreseeable future. The existing pumped-storage plants are a drop in the bucket, and they cannot be increased sufficiently. Batteries as seasonal storage systems are still tens of orders of magnitude away from the economic viability threshold. Hydrogen is the only option. However, the loop from electricity to hydrogen back to electricity wastes three quarters of the energy generated, the plants are extremely expensive, and hydrogen embrittles all materials that could be used for pipelines.

So the pipelines have to be replaced every few years. The hydrogen route and derived e-fuels are technically possible, but only at horrendous cost, robbing us of our prosperity.

Do you therefore see a comeback chance for nuclear power? Opponents argue that the remaining three nuclear power plants contribute only minimally to the electricity supply anyway.

Sinn: Green power is also not as extensive as everyone makes it out to be. The six nuclear power plants in question - the three that were shut down last year and the three that will be shut down this year - still generate 20 percent more electricity than all the photovoltaic plants in Germany put together.

Many people overlook how small the importance of wind and solar power actually is in Germany. They account for just 5.5 percent of primary energy consumption and 7.5 percent of final energy consumption. The aim is to reach 100 percent in the long term, but how can that be achieved? And in 23 years.

Since 1990, we have reduced CO2 emissions by 40 percent by shutting down GDR industry and other measures. We are supposed to achieve the remaining 60 percent by 2045. That is absolutely utopian. Or do we now want to shut down West German industry as well? None of that works at all. I can only marvel at how easily the German people have allowed themselves to be seduced into their unrealistic musings.

Do you see no need to stop climate change?

Sinn: Yes, of course! The countries of the world must take coordinated action against climate change by relying on green energies, including nuclear power. But you have to remain realistic. The unilateral path of the Europeans, especially the Germans, only leads to the destruction of competitiveness, but hardly to a CO2 effect for the world.

Why not?

Sinn: Because the fossil fuels that we use less of here, namely coal and oil and also gas, are then consumed elsewhere in the world, by the Chinese and all the others who do not participate in climate protection in the same way, who are in fact our competitors and potential enemies.

The only thing we can achieve single-handedly for the climate is to stop mining lignite, which is located on German territory. For all other fossil fuels, we can achieve nothing at all by restricting demand.

Because oil and gas will then only be burned by others?

Sinn: Yes. If, for example, we pass regulations in Europe that reduce or even ban combustion engines, the carbon bound in the oil will simply go into the air in other areas. Measures on CO2 emissions in the transport sector and unilateral action by Europe achieve absolutely nothing.

The counter-argument is: As we can see from the summer heat, the fight against climate change cannot be postponed; we cannot wait until the whole world joins in.

Sinn: We have to wait, because if we rush ahead and damage our competitiveness, we set a bad example that no one will want to follow. We can only achieve success in the fight against climate change if all or almost all countries in the world commit to cutting back on fossil fuels as well.

The Paris Agreement, which was concluded by 191 countries in 2015, is not such a commitment. While the agreement was highly celebrated, the truth is that only 61 countries committed to restrictions with clearly defined amounts. The others applauded the 61 for releasing the fuels for them. That is the reality.

If we really want to change something, we have to create a world climate club, Chancellor Scholz is right about that. But the club won't work without India, China and all the others who are speculating on getting the cheap fuels that the Europeans won't touch anymore.

They warn of a loss of competitiveness, and the first CEOs are even talking about imminent deindustrialization. Is Germany really in such a bad way?

Sinn: We have seen a contraction in German industrial production since 2018, and 2018 is the year in which the EU's CO2 regulation on combustion engines was enacted. This massive tightening virtually means the death of the combustion engine.

You can only meet the CO2 targets with electric cars, because they are set at zero, although in reality they have the exhaust just a bit further in the coal or gas power plant. This policy has robbed the German automotive industry, and with it the heart of the German economy, of its competitive advantage. Because electric cars can be produced by others, and perhaps even better.

The car managers themselves are more confident. The German auto industry can also play a leading role in e-mobility, they claim. In this respect, the departure from the combustion engine would only be half as bad.

Sinn: That may work for individual carmakers, who gather together the components they need from all over the world, and the profits are then retained for the shareholders, who in turn are also distributed worldwide. But what about the mass of jobs at domestic suppliers? They are gradually being eliminated, and that's where the big problem lies. The fact that VW failed in its attempt to make the running in China with electric cars and fired its CEO should give pause for thought.

Do you expect people to take to the streets because of the loss of prosperity and threaten the country with social unrest?

Sinn: No. Something like that only happens when abrupt developments occur, but we're talking about gradual processes here.

Chancellor Scholz promises not to leave anyone alone. But can the state really compensate for all the financial disadvantages, or will it be overwhelmed at some point?

Sinn: The state is hopelessly overstretched. It can only give to some what it takes away from others. But there will be resistance to this redistribution. And the old course, where central banks were allowed to print money without restraint and then distribute it, can no longer be continued because of inflation. Until now, states simply borrowed when they needed money: They sold the debt securities to the banks, and the banks sold them posthaste to the respective national central bank, which purchased them with freshly created new money. This made everything seem to work. Corona? No problem. Economic crisis in Italy? No problem. Money flows out of the printing press, the standard of living can be maintained.

The only problem is that in this way the money supply increases more and more and that only imaginary incomes are created that are not earned. Many people have overlooked this, and now we are in a situation where Corona has triggered inflation and the ECB is having a hard time gradually reducing the money overhang of 5.3 trillion euros that has been created since mid-2008. I don't see how that's going to work.

FDP leader Christian Lindner vows to stand firm and defend the debt brake. Can this be trusted in view of the political pressure?

Sinn: I take the finance minister's word for it that he wants to comply with the debt brake. He also has to comply with it, because any debt further strengthens the inflationary demand overhang. The times when money seemed to fall like manna from heaven are over.

But the people are groaning about the high energy prices, many households are having a hard time in winter, and the government is waving new rescue packages.

Sinn: That's a matter for politicians to decide; as an economist, I don't want to comment on that. All I can say is: Then the government has to name its horses and riders and say who it wants to take the money away from and give it to those who are now suffering from high energy prices. Again, that's almost everybody. That's the cat biting its own tail

Who will pay for the crisis in the end? Who will be hit hardest by the loss of prosperity?

Sinn: They will hit us all. Some more, others less. The state can redistribute the burdens, but the sum of the burdens remains. And if politicians try over-indebtedness, at some point savers and pensioners will rise up and be robbed of their assets by inflation. Someone will bear the burden in the end. The good Lord does not help there. richer,

Are we dealing with a small dip in prosperity, or do you fear a permanent process of decline?

Sinn: The loss of prosperity is a longer-term process. It has to do with demographics and the massive damage to competitiveness caused by the green energy transition. If the energy that people would have bought on their own is banned, so that everyone has to switch to another energy that they would not otherwise have purchased, that makes us all poorer.


In addition, inflation leads to considerable redistribution effects: Debtors get richer, creditors and the weak get poorer; life insurance contracts, for example, lose value. Similar things happen in the relationship between states; just think of the Target balances, i.e. the Bundesbank's credit claims in the euro system. They amount to almost 1,200 billion euros. With eight percent inflation, the German government will soon lose 100 billion euros a year.

In your view, has inflation reached its peak, as some optimists are predicting?

Sinn: No. I don't think we've passed the peak. This can be seen from commercial producer prices, which are currently 37 percent higher than in the same month last year, and these are on average three months ahead of consumer prices. So there's still a lot of doom ahead of us! It is true that in the past producer prices did not transmit directly to consumer prices, but only by about one third. Everyone can work out for themselves what one third of 37 percent is.

Will demonetization reach double digits?

Sinn: That is to be expected.

[Skybird]

Fritz Varenholt had this on the German industrial collapse.

Fritz Vahrenholt is an honorary professor at the University of Hamburg in the Department of Chemistry and was Senator for the Environment of the Free and Hanseatic City of Hamburg until 1997. From 1998 to 2013, he held board positions in the field of renewable energies at Deutsche Shell AG, Repower Systems AG and RWE Innogy. He was the sole director of the German Wildlife Foundation until the end of 2019.

-------------------------------

We have to point out again and again that the energy markets were already out of joint before the Ukraine war. As a result of the reduction of generation capacities (coal and nuclear power plants) throughout Europe and the failure to develop new oil, gas and coal reserves, as well as a rapid but politically intended increase in the prices of emission certificates, the prices of gas and electricity multiplied as early as 2021. The Ukraine war has further exacerbated this trend.

BDI President Siegfried Russwurm pointed out at the August 31, 2022 government meeting in Meseberg that industry has used 21 percent less gas over the course of this year. However, a large portion has not come from conservation or switching to other energy sources, but from shutting down and downsizing production.

Russwurm: "This is not a success, but an expression of a massive problem. The substance of the industry is threatened." And further, "The situation is already toxic for many companies, or will be shortly." The federal government's response is not to create a competitive industrial electricity price, as in France, but to watch as one factory after another closes its production.

The reaction of Economics Minister Habeck at the Meseberg press conference is remarkable. "The situation that we get cheap gas from Russia will not return.... This is not good news, because it can mean in each case in the affected industries that a structural change and... a structural break can happen. We are responding to this...by continuing the labor policy measures, short-time allowance." He wants to support alternative business models, which amounts to an elegant euphemism for deindustrialization.

Ten percent of Germany's small and medium-sized businesses face collapse. Steel mills like those in Hamburg and Bremen are closing down, paper mills are on the verge of going out of business. The paper manufacturer Hakle is just the beginning. The aluminum industry has largely shut down production not only in Germany - Europe has already lost 1 million tons of aluminum, according to WoodMackenzie. The situation of chemical plants and especially fertilizer factories is also alarming.

The Bergstrasse Academy maintains a depressing list of victims of energy price developments on its website. Why does an academy have to do this, when will our industrial unions finally sound the alarm? Their most important demand should be the creation of a competitive electricity price.

I was very pleased when, during the election campaign of 2021, Chancellor Olaf Scholz formulated his goal for Germany as an industrial country at Industry Day: "My goal is an industrial electricity price of four cents." Today, it has increased almost tenfold. In France, industrial companies are allowed direct access to low-cost nuclear power. For around 4.5 €ct/kWh, industrial companies can purchase a total of 120 terawatt hours, 25 percent of French generation, primarily from nuclear power plants. The EU Commission had already given its blessing to such an approach in 2010.

But we are discussing the shutdown of the last three nuclear power plants. The Green economy minister is offering a lazy compromise of a stretch operation of two nuclear power plants until next spring. He is hiding from us the fact that shutting down every other nuclear power plant will push the merit order further to the left and cause the price of electricity to rise massively. In the merit order, the order in which power plants are used, power plants are sorted by their generation costs in increasing order. As demand increases, more and more expensive power plants are added. The most expensive are the oil and gas-fired power plants. If six nuclear power plants were operated and lignite-fired power plants were revitalized, the cost of electricity would be more than halved. Robert Habeck and the entire German government are hiding this from us.

As you can see, the impact of secured base load from nuclear power and lignite in an electricity market with extremely high gas power prices is fundamental to fighting price increases. It is not fiddling with the merit order, as the German government is now planning, that will help us in the long run, but ending the electricity shortage with cheap power generation.

In a model scenario calculated according to the merit order tool of the EWI (Energy Economics Institute of the University of Cologne), electricity costs are cut by more than half if low-cost nuclear and lignite power plants continue to operate. 170 per MWh (17 €ct/kWh) is still three times as much as before the energy crisis, but it would leave the core of Germany's industrial base intact. But sometimes you get the impression that politicians have already resigned themselves to the erosion of Germany as an industrial location.
-----------------------

The level of dilletantism and destructiveness of this German suicide coalition defies description. Absolute incompetence seems to be a prerequisite for being allowed to hold a ministerial office. The worst crisis since WWII meets the worst government this country has ever had since then. And to do even worse than Merkel's regime - that really means something. But as the German saying goes: "Schlimmer geht immer."

[Skybird]

Test day for the city's sirens in my home town today. After a desastrous nation-wide testing result two years ago, one had planned to improve things and have the network of sirens properly maintained.

Today, of 70 sirens in the city where I lived, only 7 went on, they write. I say "they write", because I did not hear a single thing over the day and if it would have been a serious emergency, no warning whatever would have reached me - because the warning app announced to show a testing alarm also failed.

Second attempt, second complete failure. Germany, autumn 2022. I feel encouraged for our future...

[mapuc]

Could not hear the sirene you say.

Could it be the German has the same system as Denmark-
Here the sirene is tested one time per month(First Wednesday in the month)-Silently.
Only one time per year, citizens will be able to hear the sirene.

Oh missed the part only 7 went on-Which mean you should have heard the sirene(s).

Markus

[Skybird]

No, it definetely was a "loud" test. Meant to be that, at least.

[Jimbuna]

Originally Posted by Skybird

No, it definetely was a "loud" test. Meant to be that, at least.

Don't profess to be an expert on German politics by any stretch of the imagination but the impression I get from reading some of your posts is that whilst many in the UK would like to see a coalition government here in the UK, one look at the German coalition (every party having their own agenda and cancelling each others out in effect).

The people of the UK should see what is happening currently in Germany and perhaps think again of what they wish for.

[Skybird]

CIA expert leaves no good hair on the BND. FOCUS writes:
--------------
John Sipher is considered one of the most experienced intelligence experts in the United States. He does not see Germany's intelligence services as reliable partners when it comes to Russia. And what's more: he considers the Russia analysts from the BND "completely useless."

"Arrogant, incompetent, bureaucratic, useless" - the verdict of an American CIA expert on German counterintelligence sounds damning. In an interview with FOCUS online, John Sipher describes his professional experiences with German colleagues regarding Russia.

Sipher is one of the most experienced intelligence experts in the United States. For 28 years, he worked for the CIA in counterintelligence and was a member of the "Senior Intelligence Service," a leadership team of the U.S. intelligence service for global CIA operations.

He worked for a long time as an agent trainer and was responsible, together with intelligence services of other Western countries, for missions in Europe and Asia that were classified as highly dangerous.
-------------
FOCUS online: How do you assess the cooperation with the German intelligence services?

John Sipher: I'm sorry to have to say this. But although Germany is the center of the European economy, the German intelligence services are absolutely not reliable partners when it comes to Russia.

Actually, I don't like to speak negatively about the German intelligence services, because there are some good people there. And we are all, after all, desperately dependent on Germany to continue to put pressure on Russia.

But the German agents are being held back by their politicians, who apparently didn't want to acknowledge that Putin might be up to something nasty. So the German spies have their heads in the sand. And for that reason, the Russia analysts from the Bundesnachrichtendienst are completely useless.

You are speaking from personal experience?

Sipher: During my time in the intelligence service, when one of the tasks was to defend the country against a state threat from Russia, I noticed how much more incompetent the Germans were compared to all their colleagues from almost all other European countries.

They were also much less helpful than other Europeans. I really can't remember a single time when cooperation with the Germans worked. I also had some close friends who worked with the BND and the BfV (Federal Office for the Protection of the Constitution) in Berlin and Munich.

And their assessments were similar?

Sipher: They all came to the same conclusion: The BfV does solid, serious work - but only if the will is there to do something. And when it came to Russia, both the BfV and the BND deliberately turned a blind eye for years and decades, respectively.

One got the impression that they were so lax in their dealings with Russia because they were afraid of finding out something they did not want to see. Because then they might have had to do something. And they knew that was not wanted by the Chancellery and the German government.

By the way, I also hear these assessments from the secret services of other countries, which also tried to cooperate with the Germans.

Secret agents from other countries also assess Germany negatively?

Sipher: Yes. For example, when voices from other countries have been raised that Russia increasingly poses a threat, German analysts and top people - mostly from the BND - have almost always reacted very arrogantly, claiming that they understand the Russians much better than anyone else.

The rest of us, they say, are simply "full of prejudice" against Russia. So it should hardly come as a surprise that the German intelligence services have a very bad reputation among other NATO partners when it comes to cooperation on Russia.

The motto seemed quite obvious: "Don't search and you won't find anything, and then there won't be any problems." Most other intelligence agencies also found that cooperation with Germany was a one-way street.

The Germans were happy to listen to information from others about Russia's dangerous actions - but conversely, they refused to hand over anything or cooperate themselves.

The main problem was pressure from above, from the German government?

Sipher: Exactly. In addition, the German intelligence services are not adequately funded and are far too bureaucratic. Anyone who has worked with the Germans says that both the BND and the BfV are not taken seriously by the government, hardly even listened to.

Many individual BfV and BND agents did not agree at all with the political top in Berlin. But all of them knew that a rebellion would damage their careers. In the end, no one wanted to cooperate with the German intelligence services because it never amounted to anything.

Do you see any signs that this is changing now?
Sipher: Hopefully, things will improve in the future. NATO's intelligence services will once again welcome the Germans with open arms if they are willing to cooperate in the future.

[mapuc]

If it ain't the energy problems or other problem EU has to deal with. Now they also have to deal with this crisis

The neighbouring countries have been embroiled in disputes for decades and friction has ratcheted up in recent weeks, with both sides alleging airspace violations. Greek officials have raised concerns about another outbreak of conflict in Europe following Russia’s war in Ukraine.

https://www.aljazeera.com/news/2022/...ean-sea-turkey

Markus

[Jimbuna]

Here's me thinking the issue wasn't of German concern but rather that of Greece and Turkey.