Something needs to be done to save Germany. €1 trillion of debt is not it

Russia Today

23-03-2025

Germans are famously – infamously, really – fiscally conservative. Believe me, I know: I am German and have witnessed for decades, indeed all my conscious life, how my compatriots have fretted obsessively over public debt.
They often conflate the rules that may work for individual, personal frugality with what is needed by a modern state and its economy. Indeed, they have crystallized their misguided ideal of how to manage public finance with a tight fist and little foresight in the odd avatar of 'the Swabian Housewife' (Swabians are stereotypically thrifty and prudent; sort of the Scots of the German sense of self).
And whenever the national adoration of the Swabian Housewife was not enough, plaintive sobs of 'Weimar, Weimar' were added. You see, Germany's first failed experiment at (more or less) democracy, the Weimar Republic of the interwar years, is said to have died, among other things, of inflation.
Hyperinflation, so this shaky but (formerly) extremely powerful tale of a
'
unique inflation trauma
'
goes, undermined that state's legitimacy from the very beginning, so that it could never grow strong enough to later withstand the pressure of the Great Depression and the Nazis.
Curiously enough, in this sorely mistaken version of recent German history, austerity was enshrined as the magic charm that will keep inflation away and therefore also other undesirable things such as Leni Riefenstahl movies, fascism, and starting and losing yet another world war while committing genocide.
In reality, it was, of course, precisely the austerity policy of the last Weimar governments, enacted about as undemocratically as is fashionable again now (see below), that really made the effects of the Great Depression even worse and helped open a path to power for the Nazis.
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But this time, everything is different. In a truly unprecedented move –
instantly recognized as historic
, for better or, much more likely, worse – Germany's elites, in politics, the media, and academia,
have closed ranks Nuremberg-party-rally-style to make Germany splurge again
. The upshot is a fundamental policy change, complete with fixing the constitution, another thing Germans usually are obstinately conservative about. And all that to go into massive, quite possibly crippling debt for, in essence, war with Russia.
For, in sum,
there are three ways in which Germany wants to go on a big binge
: The so-called debt brake – an anachronistic and economically primitive limit on public debt – will be removed for anything having to do with 'defense', that is, in reality a massive rearmament program, including civil defense and the intelligence services, as well as for military assistance to Ukraine.
Second, the German government will also incur debt to the tune of another €500 billion to be spent over 12 years. This money is supposed to be invested in climate action (a sob to Germany's militaristic, far-right Greens) and infrastructure.
Infrastructure, here, has much to do with military purposes as well. No secret has been made out of the fact that often decrepit German railways, roads, and bridges, for instance, are to be renovated not merely for civilian and commercial purposes. Instead, as before in German history, trains and autobahn highways, for instance, are being highlighted
as key parts of military logistics
.
And as before as well, the big propaganda story is that they are needed for sending military forces into a fight against Russia. Only that this time, Germany is presented as a hub for all of NATO. Whatever 'all of NATO' may mean in the future.
Third – and usually overlooked – as Germany is a federation, its individual land states are also being empowered to assume additional debt. The way all of this is supposed to work together over the next decade or so, is complex. For instance, there are complicated and probably impractical rules designed to avoid labeling ordinary budget expenses and debt-making as part of this program. Yet the upshot is quite simple: The German government has created a tool
to add a total of about a trillion euros or even more
of debt.
It is true that to some extent, all of the above is simply a local variant of a general EU-plus-UK frenzy: With Brussels, London, and Paris as agitators-in-chief,
the whole shabby, stagnating bloc is dreaming big about going into massive debt
, perhaps even, in essence, confiscating private savings, to confront Russia. With or without the US. That is just another application of the key current governing principle of Western elites: Rule by permanent emergency. And if there is no real emergency around, they just make one up.
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But there is also something specifically German about Berlin's 'Sonderweg' into deadly debt. For one thing, so much then for that old habit of whining about inflation in 'Weimar': It turns out that the one purpose that makes Germans overcome their hitherto allegedly debilitating fear of inflation and debt is – wait for it – launching a re-armament program in the style of 1930s Nazi Germany. Because, we must assume, unlike Weimar, that regime ended really well.
You see the irony, I trust. The Greeks probably spot the tragedy: In 2015, the Germans, most of all, turned their nation into a ritual sacrifice to the EU god of Austerity (the bloodthirsty Kali version of the local Swabian Housewife deity).
Yet if ideological-narrative clumsiness and an astonishing inability to see just how bemusing they sometimes look to others were the only problems here, it would just be Germany as usual. Unfortunately, that is not the case.
Much more is at stake. Because there is a much worse irony: In principle, it is true that Germany urgently needs a big dose of Keynesianism, that is, of using public debt to relaunch its deindustrializing (compliments US and Ukraine) deathbed economy. Yet to tie this fundamentally sane and absolutely necessary policy to a hysterical war scare about Russia will produce great economic waste as well as terrible risks.
These risks include a ruinously costly failure of the policy with horrendously destabilizing domestic effects and an even more ruinous 'success', namely a self-fulfilling prophecy effect, in which what is officially presented as preventing war by increased deterrence will help bring that war about.
Let's get one thing out of the way: The problem is not even that Berlin is admitting, once again, not only how dilapidated the German military is, but that something needs to be done in earnest, that is expensive, about that weakness. A reasonable modernization is urgently needed; and that, in principle, is a fact that serious observers, including in Moscow, are likely to understand (whether they currently find it useful to say so out loud or not).
What makes the stress on rearmament so pernicious in this case are four features that the German elites have deliberately attached to it: Ukraine; exaggeration; a truly deranged, monotonous propaganda drive about an impending war with Russia; and last but not least, a coup-like implementation of the policy by an unusually shameless maneuver.
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To deal with the most obvious first: German companies may, of course, find production locations and markets in Ukraine, especially if the moronic Western proxy war finally ends (and they would have to thank both Washington and Moscow for that, definitely not Berlin or Brussels). Such investment and commerce would also benefit Ukrainians.
But simply throwing money at Kiev and its corrupt regimes must end, because in realistic terms, Ukraine is not an asset but a great burden. And for those who wish to talk about what they misunderstand as 'values': Ukraine is not a democracy and does not have the rule of law or a halfway free media; its 'civil society' – at least what Westerners encounter in chic cafes in Kiev and on promotion tours across academia – is a bloated grant fraud gig; and to top it all off, it is extremely corrupt. For Berlin, it is perverse, self-damaging, and actually immoral to feed Ukrainian elites even more money.
Secondly, it is not possible to pin down the precise mix between military and civilian deficit spending that would be the optimal Keynesian mix to jolt Germany out its economic coma. But there can be no doubt that the current plans have erred on the military side, probably massively. For one thing, it is a simple economic fact that weapons and other military expenditures are not productive in the usual sense. They are at best third-best to prime the pump of a national economy. Those fantasizing about enormous knock-on effects to compensate for that fact are either ignorant or dishonest.
Unsurprisingly, even the German government's own chief auditing body – the Bundesrechnungshof – has criticized the debt plans: For the federal auditors, they are excessive as a whole. And, regarding their preponderant military side, they find that these expenses should not have been freed from the debt brake, making them, in effect, unlimited. As a result,
'long-term, high interest expenditures'
will threaten damage to state finances as well as corporations, leading to
'economic and social risks.'
Time will tell, but much of the currently fashionable boosterism and boasting is likely to be remembered with embarrassment. Joe Kaeser, the head of the Siemens conglomerate, for instance, may – like Chancellor-elect Friedrich Merz – exult now about Germany
being back
. He has clearly overlooked that, with Germany especially, the question should always be 'back to what?' Yet even he notices that 'we don't know exactly how'.
Really? What intriguing nonchalance when you are about to pick up a trillion euros of additional national debt. No wonder that even Switzerland's arch-capitalist and very Russophobic Neue Zuercher Zeitung has met the new German enthusiasm for debt
with pronounced skepticism
.
Thirdly, there is the war scare. For those who do not know German, it may be hard to imagine just how pervasively unhinged Germany's public sphere has become. Traditional as well as social media are feeding the population a constant, ceaseless torrent of Russophobic war-in-sight propaganda. The very few and thoroughly marginalized German critics of this manufactured mass psychosis speak of
war hysteria
, and they are right.
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Tellingly, a small but ubiquitous platoon of experts-from-hell such as Carlo Masala, Soenke Neitzel, Gustav Gressel, and Claudia Major have gone into overdrive: After years of getting everything – yes, really, everything – wrong about the Ukraine conflict, they are now confidently predicting a war with Russia and telling Germans what to think and do about it.
Their fascinatingly diverse (not) and always fresh and surprising (also not, really not) discussions, pounding Germans on a nearly daily basis from one studio or another, usually now turn on when exactly 'the Russian' (Der Russe!) is going to strike. Opinions vary between essentially tomorrow morning and in a few years.
And that insanity is, unfortunately, now representative in Germany, at least among its so-called elites. One problem with this propaganda is old and obvious: Those spreading it start believing in it themselves. Indeed, in Germany, they have long reached that stage: Like the doomsday cult, which they really are, they are self-hystericizing and self-escalating.
Which means that while a rational German leadership would seek to balance due diligence in matters of security with national-interest-based diplomacy and, yes, cooperation with Russia, this type of approach is now impossible. Instead, those Germans who love to talk in the name of the nation are busy talking it into yet another very stupid, very unnecessary, and, in the end, very lost war.
Finally, there is the way in which this policy turn was executed. It may have been (barely, formally) legal, but if so, then only by the letter of the law. Its spirit and democracy as such have been violated vigorously and in public. For Merz, who is not even chancellor yet, has used the old, pre-election parliament to ram these changes through. The new parliament, already elected, would not have allowed him to find a majority for this operation.
This means Germany's next chancellor deliberately went against the already clearly declared will of the voters, and he did so by using a transparent dirty trick. All the parties helping him do so, including the Greens and his likely future coalition partners from the Social Democrats, have sullied themselves.
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And all that while Merz has shown his contempt for law and decency by inviting the internationally wanted war criminal Benjamin Netanyahu to Germany, and
Sarah Wagenknecht's BSW has been kept out of parliament by obvious election manipulation and extremely likely falsification
. No wonder many Germans have lost belief in the traditional parties. If there is one force standing to profit from all of the above it is, of course, the AfD, Germany's strongest opposition party now. German Centrists: Don't cry on our shoulders and don't whine about 'Russia, Russia, Russia' when your silly firewall against the AfD crumbles. You only have yourselves to blame.
Is there any hope left? Yes, maybe. Because although this is a terrible beginning, the policy just started is also meant to be carried out over a decade and more. Much may happen in that time. For instance, German corporations might finally – if quietly – rebel against being crippled by a self-defeating sanctions war against Russia, especially when their US competitors will be back in the Russia business,
as they are clearly itching to
. The Ukraine conflict may end in such a manner that Germany's Zelensky stans simply won't have anyone left to send the money to. Last but not least, even currently hyperventilating Germans may perhaps notice when Russia does not, actually, attack.
Yet for now, Germany is continuing on its path of severe and self-evident national self-harm. And unfortunately, history teaches that Germans can stay such a course through to a very bitter end. There are no guarantees that things will be better this time.