Transcription
All right, Alexander, let's talk about the collapse of the Schultz government, the traffic light Coalition. We're down to two: the SPD and the Greens. The CDU's Merz has now come out and said that he's not going to be doing Schultz any favors. He actually wants the vote of confidence and the election moved up. He doesn't want it to take place in March; he doesn't want the confidence vote to take place in January. He wants this to be resolved as quickly as possible. Obviously, he wants to take power in Germany.
Then we had the revelation that the dispute between Lindner, the Finance Minister, and Schultz was over Ukraine. Lindner was talking Taurus missiles to Ukraine with no money, and Schultz wanted money to Ukraine. What are your thoughts?
I mean, the first thing to say is that there's a huge amount of political theater, manipulation, and grandstanding here. It is fascinating that it was about Ukraine, but we need to understand exactly what happened because there is this major hole, this huge hole in the German government's budget. The government in Germany is constrained by budget rules. Of course, they argue about funding for Ukraine.
Now, again, I don't think people really understand what we're talking about here because it's quite clear to me, though nobody says this, that this is clearly about the loan that was agreed last year—the 55 billion euro loan that was going to be paid over to Ukraine and which was going to be repaid out of the proceeds of the Russian assets.
Then, of course, the Americans became called because there were all sorts of legal problems. Ursula revived the entire plan but without the Americans and said, "We're going to provide $40 billion to Ukraine." It was all said, all suggested, that it would be agreed across the European Union. I said at the time, and I've said it many times, that it's a very difficult thing to do because European Union governments would have to get their parliaments to agree to this, and that might raise all kinds of problems.
What we're looking at here is an argument about the German part of the loan. Lindner, who is the Finance Minister, says that Germany is not in a position to authorize this loan for Ukraine—the German part of the loan for Ukraine, which is of course the biggest part.
So, Schultz comes along and says, "Well, you know, if you're not prepared to do that, what are you prepared to do?" Lindner says, "Well, let's send them Taurus missiles instead." Lindner knows perfectly well that Schultz has ruled out sending Taurus missiles and that Schultz's position, his authority within the German government as Chancellor, depends on him refusing to do that.
Lindner knew perfectly well that Schultz would refuse to send the Taurus missiles. From Schultz's point of view, he had to get those $3 billion for Ukraine passed because if he didn't, it would put him in a very embarrassing position with the European leadership and with the G7. It would mean Germany not fulfilling the obligations that Schulz himself has made on its behalf.
So Lindner knew that. Lindner knows exactly the position that Schultz is in, so he basically staged the whole thing in order to get himself sacked, which of course Schultz was forced to do. With Lindner sacked, the Free Democrats have in effect pulled out of the Coalition.
This is an example of how the whole issue of Ukraine has now become a key point of contention, an issue within German politics itself. It's become a sort of football that the German politicians play with each other, and it'll continue to be this way because, of course, Ukraine is at the source of the whole problem. The reason the Coalition is in crisis is that Germany is in crisis.
The reason Germany is in crisis is that without cheap Russian gas, without the Russian market, without good relations with China, without any of those things, the German industrial economy is falling apart. We've had further declines in production across Germany. I was reading this morning that three years ago, Germany was producing 7 billion cars a year; now it's down to four. In other words, there's been a massive collapse in production.
Volkswagen is talking about closing down its plants; Daimler has effectively stopped production of the Mercedes E-Class, which is the heart of the Mercedes range. They're now lumping it together with the C-Class. I'm not going to get into it—people who are interested in cars know what I'm talking about.
But anyway, all of these things are happening in Germany. The mechanical engineering factories are in crisis; the chemical industry, which is particularly dependent on cheap gas from Russia, is in crisis. Everything is falling apart; the Coalition is falling apart.
They know there's going to be elections soon. Lindner basically wanted to bail out, so he staged this whole thing in order to give himself an alibi as to why he's bailing out. He says he's defending Germany's fiscal position and he wants to press forward with tax cuts and restore dynamism to the economy and all that kind of thing.
Of course, the Social Democrats and the Greens are completely committed to the existing policies and are very unhappy about the things that the Free Democrats were proposing to do. But at least they're now liberated, as they would put it.
Apparently, the mood among the Social Democrats has actually improved because they no longer have to deal with the Free Democrats anymore. They can all look forward to a coalition election, which they want to postpone as far as possible.
In the meantime, the NS and the Christian Democrats are maneuvering to take control. They want elections now, but they have no plan on how to deal with the underlying problems of Germany. They assume that if they do become the new government of Germany, that by itself will be sufficient to solve all the problems, and of course, that isn't true.
Besides this, the Christian Democrats are running at 32%. There's been a small uptick from the time of the last election when the CDU fell below 30%. But by historic levels, this is a very, very low percentage for the CDU, Germany's dominant party.
So quite likely, we're going to see a Grand Coalition between the CDU and the SPD coming out of the election, whenever it is held—a Grand Coalition, however, without Olaf Schultz.
Yeah, Merz is just as bad as Olaf Schultz, though.
Oh, absolutely. I mean, he was the guy that was talking about ultimatums to Putin. If Putin doesn't capitulate, then he's going to greenlight the Taurus missiles to Ukraine—that would be his ultimatum, his war to Russia. Nothing gets solved in Germany, even with the election. I think that’s the problem.
All of this stems from Ukraine because none of them, no part of the German political class, is prepared to admit that Germany's problems originate from decisions made in February 2022. They are all united in continuing to support the policies that were adopted then—freezing the assets, stopping Nord Stream Two, imposing across-the-board sanctions against the Russians, refusing to trade or import Russian oil directly from Russia—all of those things and, of course, doing all of the other things that also happened around that time.
So they’re not prepared to do that; they're prepared to argue about smaller things, you know, the various plans that the Greens in particular have to move forward with their green policies and all of that. But those issues are not inconsequential, but they are not the root of the present crisis.
So, you know, you can make changes about heat pumps and things like that, but that's not going to improve the underlying economic problems that Germany now has. The German political class has united behind an anti-Russian policy, which is leading Germany to disaster and rampant de-industrialization, which they have no means to slow down or prevent.
Yes, so they're just going to go down.
Yeah, they're going to go down with Ukraine.
Yes, I mean, it is important. What kind of a policy of choice is that? I mean, what's wrong with these people?
What is indeed wrong with this? Because, of course, the alternatives are there and they are at least being expressed in Germany. They're being articulated by the AfD and, in a different way, by Sarrazin's group, both of which will emerge out of these elections, I suspect, stronger. But, of course, the very fact that it is the AfD and Sarrazin who are talking about these realities is making the German political class even more determined to stick with the existing course, and that's the problem.
They're not prepared to change direction. So it's full steam ahead: rearranging the deck chairs on the Titanic, but full steam ahead towards the iceberg on the horizon, and to which we're going to crash. As Germany crashes, so does the European Union.
Exactly, which is also headed up by Ursula von der Leyen.
Absolutely. It all hinges on Ukraine.
Exactly. It is very astonishing that we have come to this, but it demonstrates a point we've been making in many programs, which is the degree of political atrophy that exists in Germany now.
So, you have a political class that has become completely disconnected from the actual life of the country. Once upon a time, the CDU was very close to the small and medium-sized family businesses which were the backbone of the German economy.
By the way, all of the people who run those businesses are Christian Democrats. Many of them are Social Democrats, but having said that, it was the party overall which looked after them and represented their interests. That was the CDU, and now they're not interested in them anymore.
The SPD obviously had interests in those parties, but it was also interested in the position of the working class in Germany. It was very close to the big unions in Germany, the industrial working class, and had a strong interest in protecting German industry and all that kind of thing.
It's no longer really interested in them either. The Greens, of course, do have their constituency and their interests, and notice that of all the parties of the Coalition, they're the ones that are holding up best in electoral terms because Green voters tend to be, I get to say it, rather more affluent and, at the same time, disconnected from the industrial process in Germany.
So they're not affected directly by, to the same degree, this economic implosion. They're still there; they're still arguing what they want to argue. They want to go forward with heat pumps; they want to stop nuclear power; they want to move away from fossil fuels. They're not going to be swayed from doing any of those things.
But the major parties, the Free Democrats, the Social Democrats, and the Christian Democrats— they’re all, as I said, disconnected from their original constituencies and basically follow the line that is said by the EU center.
The major disappointing figure is, in fact, Friedrich Merz because during Merkel's time he positioned himself as the alternative who would bring the CDU back closer to its roots, the situation where it represented and protected the business interests I mentioned and had a more right-wing perspective.
He was stronger on immigration issues, stronger on social issues, and things of that kind. But in practice, it seems to me that he’s proved little different in terms of leading the CDU from Merkel, even though they pretended to be great adversaries and enemies with each other.
He has no more vision for how to turn the problems of Germany around than any of the others do.
No, he just wants to find a way to destroy Russia.
Yeah, as do the Greens, as does Ursula, and if anything, Schultz is the one person that maybe you could say doesn’t want to.
He's not so obsessed with destroying Russia, but he's so captured and owned by Annalena Baerbock and Robert Habeck that he can’t make any other decision aside from escalation.
I mean, I don't think Olaf Schultz has that vitriol for Russia that Ursula, Merz, and Annalena Habeck do.
I agree. He’s so captured by the Greens that he's just moving in one direction, and he’s not a very bright guy. I mean, that’s obvious.
I wonder what's with all these people and their hatred for Russia that they're letting it destroy their country.
It is what's happening; Germany is being destroyed.
Germany is already destroyed; it’s being taken down.
Germany is being taken down, and I think we're going to see a very different Germany in five or ten years—a much weaker, much poorer Germany in five to ten years.
But I wonder what drives these people with their obsession for Russia: the Annalenas, the Merzes, the Ursulas.
You see, this is a particularly painful subject for me because I'd assumed, I know Germany quite well, that this kind of anti-Russian current in German life had basically exhausted itself in the late period of the Cold War, in the period of Helmut Kohl and all of that. On the contrary, I had assumed, as I said, that Germans overall understood that good relations with Russia were in Germany's interests.
All I can say is it's always been there. I mean, it has a very, very long history going all the way back to the 18th century and even beyond. It's always been there: there's always been a very strong anti-Russian current, and that's tended to be the ascendant one.
It’s the one that has prevailed, and I was very disturbed, astonished, and shocked by it, but it is the reality one has to face. You're quite right; they’re not destroying Russia; they’re destroying Germany, which is always what happens when somebody gets themselves into a state of obsession.
When they become eaten up by hatred and loathing, ultimately, you know, they become like Captain Ahab chasing the white whale. They will ultimately drown themselves and wreck their ship, which is what happens; if you know the novel I'm talking about, Moby Dick, it's exactly what's happening with these people.
As I said, they are obsessed with Russia; they always have been. As I said, it was there in the 30s and 40s; it was there before the First World War.
Bismarck argued passionately against it. He was very concerned at the end of his life that this current was getting stronger and stronger in Germany. Ultimately, he was ignored; his advice was disregarded. Germany was led into complete disaster in World War I, led into complete disaster in World War II, led into division—and you know, the wall and all that.
And of course, it's now being led into disaster all over again because this obsession with Russia is still there. I can't provide a full explanation for it; I’m just shocked to find that it still exists and that it seems to be as strong as ever.
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