Is the corona crisis bringing the state’s strengths to bear? Not quite – because whoever is supposed to govern after the crisis is confronted with the largest mountain of debt in Germany.
Corona, it is said everywhere now, has brought back the state. In times of great need, politics shows what it can do when it really has to be: closing shops, restricting travel, distributing vaccines. And pay a lot of money for it. All this, so the optimists say, could be a good example: for the fight against climate change, for the expansion of infrastructure, for more social justice. If you are not mistaken.
There are many indications that the state is in a much weaker position than it is today after the pandemic, which by the way is far from over. And that’s plain and simple because he’s running out of money. In Germany, the federal government could get away with new debt of around 160 billion euros in 2020 even more lightly than expected, because a lot of aid funds are only flowing out slowly. This does not apply to 2021. Even if everything goes as hoped with the vaccination, which is by no means certain, the next few months will remain difficult.
It is even uncertain whether things will be as easy as in the previous year from May: The still rather casual shutdown, which only reduced mobility by eleven percent compared to the previous year, may not sufficiently limit infections. Hardly any other country is currently affording so little contact reduction for so much money as Germany. Measured by the number of inhabitants, the Federal Republic has as many corona deaths on some days as the United States Donald Trump.
Somebody has to pay
The Chancellor has been pointing out for weeks that the state’s resources are finite, and the Minister of Finance is also signaling with his call for a wealth tax: in the end, someone will have to pay it. Hardly any of the responsible politicians like to follow those economists who say that the era of zero interest rates will never end and that the public sector therefore enjoys unlimited credit. The experts have been wrong too often for that, and the shock of the European sovereign debt crisis is still too deep in the bones of the actors: Back then, too, it was initially said that a country in the euro zone could never go bankrupt – until national bankruptcy was imminent and ATMs in Greece stopped issuing bills.
In the meantime, it is no longer even considered certain that the Federal Republic can grow out of the corona debts as easily as it once did from the liabilities that it piled up after the bank crash in autumn 2008. Growth in Europe may be too weak for that, less than in Asia and even than in America. The health crisis has strengthened the continent’s cohesion, but not its competitiveness.
Merkel, of all people, is leaving record debts
It is bitter irony that Angela Merkel of all people is now leaving the country with record debts, the woman who once preached the moderation of the “Swabian housewife”. During the financial crisis she liked to refer to the sociologist Ralf Dahrendorf and his criticism of “pump capitalism”, which wanted to buy growth through private and public debt. Merkel may have seen the dangers of the credit glut earlier than others, but she was still unable to prevent the coming crises from the outset, at best tame them afterwards. Political decisions are usually only enforceable when the need is already obvious to everyone.
The time for this will probably come after the general election next year. If the virus crisis ends – hopefully – at some point, it will in all likelihood be followed by a budget crisis. In a way, this is a déjà vu: The New Economy crash and the 2002 election was followed by “Agenda 2010”, and the financial crisis and the 2009 election were followed by the austerity retreat, which among other things fell victim to conscription. Governing will not be more pleasant for the successors, whoever moves into the Chancellery. A position of strength looks different.