Politeía Digest

Quis custodiet ipsos custodes?

Goodbye to Berlin

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German business and politics – Business bosses are growing impatient with a drifting government.

“I SUPPORT the euro, but not at any price,” said Wolfgang Reitzle, chief executive of Linde, an industrial-gas producer, in a recent interview. He is not alone. Many German business leaders are wondering if the apparently never-ending euro-zone bail-outs, to which Germany is the biggest contributor, are beginning to outweigh the (considerable) advantages of the single-currency area.

Their concerns are aggravated by what they see as political drift in Berlin. Many German bosses, say those close to them, have lost faith in the ability of Angela Merkel’s government to steer Europe out of trouble. Looking towards Berlin from their fastnesses in the Ruhr and southern Germany, they see only weak leadership, perverse decision-making and poor communication. These days many no longer bother making the trip to the capital.

Many business leaders complain that the government, which yokes together the conservative Christian Democrats (CDU) with the pro-business Free Democrats (FDP), is plagued by in-fighting. The CDU wants to keep taxes high to help reduce the budget deficit. But the FDP insists that reducing the burden on taxpayers was part of the deal they agreed when the parties formed their supposed “dream-team” after elections in September 2009.

Now differences over the euro are adding to the headache. In September Mrs Merkel must secure parliamentary ratification of a deal she agreed with other euro-zone leaders in July to expand the powers of the single currency’s bail-out fund. Dissent from some FDP deputies, and even from within the CDU itself, could force her to rely on support from the opposition.

Aside from the euro, bosses’ biggest beef is the government’s decision, in May, to close all of Germany’s nuclear-power stations by 2022. The move followed a moratorium initiated by the government in the wake of the nuclear disaster in Japan, just before an important regional election that the CDU feared losing. Many saw it as an unprincipled U-turn. Only last autumn the government had agreed to extend the lives of some nuclear-power stations by an average of 12 years. The new policy was thought up “without true awareness of the consequences,” said Dieter Zetsche, head of carmaker Daimler, in an outspoken interview with Bild, a tabloid. Most bosses think that they were not consulted properly, if at all.

Some consequences of the new nuclear policy became apparent on August 9th when RWE, a big energy firm, said the move had cost it €900m ($1.3 billion) in the first six months of 2011. A day later E.ON, another power firm, noted an “adverse effect” from the policy worth €1.7 billion in the second quarter alone; it said it might have to cut up to 11,000 jobs. Bayer, a chemical firm, said it was considering moving production to countries where electricity prices have a more certain future. Read more in The Economist.


Written by Theophyle

August 18, 2011 at 9:10 am

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