Germany is being sucked into the austerity vortex it created
Since the financial crisis of 2008, the Eurozone has been in a state of what Martin Wolf calls "managed depression," now considerably worse than the Great Depression of the 1930s. This is almost entirely the responsibility of German policymakers, who are the main political force behind the savage austerity regimes inflicted on nations like Spain and Greece, leaving them with unemployment rates over 20 percent.
Germany itself has done fairly well comparatively, keeping its unemployment rate low and managing at least moderate growth. But it too has passed considerable austerity, which is beginning to tell on the German economy. German industrial output crashed by 4.0 percent last quarter, the worst result since the financial crisis, and the Eurozone as a whole is dangerously close to deflation. The place needs more spending and demand, which makes for sadly ironic stories like these:
That's austerity for you: cut spending and raise taxes for no reason, and then your infrastructure collapses. Indeed, Germany's economy only looks strong compared to the utter catastrophe in southern Europe. Overall growth has been considerably weaker than in the United States (which is not doing that well either). It remains to be seen whether Germany will be able to grasp the nature of their problem, but the solution is obvious: dose the economy with stimulus. A good place to start would be patching up that canal.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Ryan Cooper is a national correspondent at TheWeek.com. His work has appeared in the Washington Monthly, The New Republic, and the Washington Post.
-
Italian senate passes law allowing anti-abortion activists into clinics
Under The Radar Giorgia Meloni scores a political 'victory' but will it make much difference in practice?
By Chas Newkey-Burden, The Week UK Published
-
Magazine interactive crossword - May 3, 2024
Puzzles and Quizzes Issue - May 3, 2024
By The Week US Published
-
Magazine solutions - May 3, 2024
Puzzles and Quizzes Issue - May 3, 2024
By The Week US Published
-
Puffed rice and yoga: inside the collapsed tunnel where Indian workers await rescue
Speed Read Workers trapped in collapsed tunnel are suffering from dysentery and anxiety over their rescue
By Sorcha Bradley, The Week UK Published
-
More than 2,000 dead following massive earthquake in Morocco
Speed Read
By Justin Klawans Published
-
Mexico's next president will almost certainly be its 1st female president
Speed Read
By Peter Weber Published
-
North Korea's Kim to visit Putin in eastern Russia to discuss arms sales for Ukraine war, U.S. says
Speed Read
By Peter Weber Published
-
Gabon's military leader sworn in following coup in latest African uprising
Speed Read
By Justin Klawans Published
-
Nobody seems surprised Wagner's Prigozhin died under suspicious circumstances
Speed Read
By Peter Weber Published
-
Western mountain climbers allegedly left Pakistani porter to die on K2
Speed Read
By Justin Klawans Published
-
'Circular saw blades' divide controversial Rio Grande buoys installed by Texas governor
Speed Read
By Peter Weber Published