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Germany Can Save Itself, and Possibly the World, by Abandoning Four Failed Policies

The following is a plea to Germany—the war is over and has been for three-quarters of a century. It’s time to stop prostrating yourself for the supposed “good” of Europe. It’s time to take complete control of your domestic and foreign policy, without interference from haughty, busybody world elites, and do what is best for yourself. You will be pleasantly surprised that what is good for yourself is also good for your neighbors and the world.

Here are four failed policies that must be ended:

  1. The green energy projects.
  2. Membership in the European Monetary Union (EMU).
  3. Membership in the European Union.
  4. Membership in the North Atlantic Treaty Organization (NATO) and economic sanctions against Russia.

None of these policies are working. As American humorist and political sage Will Rogers said, “If you find yourself in a hole, stop digging.”

  1. End the green energy projects. This is a good place to start, since your hardworking citizens are likely to freeze this winter. The green energy project, born of the global warming / climate change hysteria, will never power Germany or any other country, that matter. It has failed and cannot succeed. Simply scrap all the publicly funded green energy projects, end all “green energy” subsidies, and wish the private ones well. Sure, maybe there’s a niche here and there for wind and solar, but the national goal to replace fossil fuels must be abandoned. You cannot heat your homes and run an industrial economy on green energy.
  1. Abandon the euro and reinstate the deutschmark. If ever there were a competition for the world’s most foolish currency bloc, the European Monetary Union (EMU) would win all the prizes. As Claudio Grass explained recently, the euro is worse than even a state-sponsored fiat currency. It has no one national owner but nineteen, and a majority want to print more euros. It is the tragedy of the commons applied to currency. You have one vote in decision-making regarding the EMU’s policy, the same as Cyprus and Malta, despite the fact that you are the world’s fourth-largest economy, the largest in Europe, and probably the industrial country with the best public finances.

There is only one chart that anyone needs in order to understand how the EMU’s structure has plundered Germany’s wealth—that of the member balances in the TARGET 2 settlement system. Germany has a credit balance of around €1.3 trillion. A credit balance is good, right? Wrong. Spain and Italy have debit balances of over €0.5 trillion each. This means that they haven’t paid for what they have imported, mostly from Germany. It’s as if you were holding a check from a deadbeat debtor who will not and cannot ever pay for what he has purchased from you. Forget about ever collecting this debt. You have done all you can to support the debtor countries, but instead of using the money to tide them over until they could fix their own economies, the debtor countries have squandered your largess. Write it off as a lesson learned and move on. The fact is that the longer you stay in the EMU, the more capital gets drained from your economy, as your ever-increasing credit balance at the European Central Bank shows. You simply cannot put half of Europe on welfare.

  1. Leave the European Union. Britain did and the sky did not fall, even though Britain has not yet purged itself of all the EU strings. The EU is a closed trading bloc, meaning that it has free trade among members but high tariffs against nonmembers. This makes no sense. Just adopt unilateral free trade with the world. It worked for Britain in the nineteenth century, and it will work in the twenty-first century for any nation smart enough and brave enough to try it. This is just the economic argument for leaving the EU; there is a vital noneconomic argument also. The EU has gone from a closed economic trading bloc to pursuing what its champions call an “ever closer union”; i.e., the EU wants to destroy its members’ sovereignty and assume the role of a megastate ruled by appointed bureaucratic elites in Brussels. That’s right. Your Bundestag will decide only whether German stores can sell beer on Sunday and other earth-shaking problems. It’s a dream that harkens back to the Holy Roman Empire and has been pursued by such freedom-loving statesmen as Napoleon, Stalin, and Hitler. Just get out.
  1. Leave NATO. This is crucial in order to regain full sovereignty. As long as Germany remains in NATO, it will be ruled by the United States. Germany will not have its own foreign policy based upon its special needs in its corner of the world. Of course, leaving NATO and the EU will mean that Germany will be able to abandon the economic sanctions on Russia. These sanctions are failing, even if Germany believes that Russia is at fault in the Ukrainian war. The war will end, hopefully without a great power confrontation, and the decades-long baby steps toward integrating Russia into the world economy will continue. Germany has correctly pursued closer ties with Russia since the old Soviet days, starting with Willy Brandt’s Ostpolitik. Like World War II, the Cold War has been over for decades. Time to get out of the mental time warp and get on with integrating Russia into a new Concert of Europe. Germany can and should lead the way.

Conclusion: What’s Good for Germany Is Good for the World

In conclusion, not only will Germany save itself from economic and possibly political collapse, but abandoning these four failed policies will be a benign catalyst for change in the world. It is more than likely that the EMU and the EU itself would collapse and many nations of Europe would become deutschmark countries instead of reinstating their own currencies.

In this case, Germany, the most fiscally and monetarily responsible nation in the West, will control the currency itself and prevent the fate of hyperinflation toward which the euro is headed now. The dollar itself will be forced to reform in order to trade with a new, better, and more peaceful Europe. You can and must act soon.

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Patrick Barron
Patrick Barron is a private consultant to the banking industry. He has taught an introductory course in Austrian economics for several years at the University of Iowa. He has also taught at the Graduate School of Banking at the University of Wisconsin for over twenty-five years, and has delivered many presentations at the European Parliament.
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