At the end of her term in office, Chancellor Angela Merkel had to face the greatest crisis that Germany has been experiencing since the Federal Republic was founded. The Federal Government’s answer to the corona pandemic is on the one hand more Europe, and on the other hand above all: more money.
The total volume of the so-called Economic Stabilization Fund (WSF), with which German companies are to be saved in the corona crisis, amounts to 600 billion euros. “We will do everything that is necessary,” Finance Minister Olaf Scholz commented on the adoption of the historic rescue package.
But for the US business magazine Bloomberg, the billions of dollars spent by the federal government are no mere bailout – they are part of a “radical plan to transform the country into a state capitalist reminiscent of France or China”. Angela Merkel uses her chance in the corona crisis “to revolutionize Germany’s economy”.
Merkel’s economic ideas: orientated towards France, inspired by China?
Because behind the “feverish crisis management” of the federal government is actually a “deeper strategy that has been worked on for months,” writes Bloomberg.
This means the National Industry Strategy 2030 by Federal Minister of Economics Altmaier, which has been criticized by the markets and corporations as too radical, that is: responsible for the state. “The initiative was dead before it could even be implemented,” writes Bloomberg.
But the corona crisis is now a catalyst for the economic change that Altmaier had imagined. It enables Angela Merkel to “do the most dramatic restructuring of the German economy since reconstruction in the post-war period”.
Bloomberg also thinks he knows what the outcome of this restructuring will be: “When the Chancellor is ready, she will have established a state capitalism in Germany that is closely based on France and is even inspired by China’s success.”
Government officials in Berlin could now choose the winners and losers of the crisis, Bloomberg continues. They could sprout new industries and build national champions. The purchase of company shares by the state is also no longer taboo – and the 9 billion stake in Lufthansa is just a start.
“Merkel has the unique opportunity to correct her mistakes”
However, the billion dollar efforts made by the federal government are only part of the plan for the restructuring of the German economy, Bloomberg writes. Strategic programs are already being planned – including those that protect German companies against foreign competition and those that are designed to reduce dependence on international supply chains.
After the financial crisis in 2009, Merkel simply tried to avert damage from Germany, writes Bloomberg. But the world has changed since then: Transatlantic relations have been shattered by the Trump presidency and China threatens to overtake Germany as the world market leader in the field of modern manufacturing technologies.
Merkel’s tactics have therefore changed. This is also shown by their joint venture with Emmanuel Macron, the demand for a 500 billion euro concept for European reconstruction in response to the Corona crisis. “We have seen that others, whether the United States, South Korea, Japan or China, have relied heavily on global champions,” Bloomberg quotes the Chancellor from the press conference on her and Macron’s demands. “I think this approach is the necessary answer.”
Instead of just rebuilding as in 2009, the current crisis is to be followed by structural change, a modernization of the German economy, which has not been modernized for a long time. Bloomberg’s conclusion: “Merkel has the unique opportunity to correct her past mistakes.”
6 figures that show the extent of the corona crisis for the German economy