«Mega-Streik» or the beginning of the end of the German economy
by Richard Stahl
While German foreign minister Annalena Baerbock spoke of 360 degrees turns one would have to make in order to get out the crisis, the German economy is really doomed and that is not a joke.
On March 28, the largest strike in 30 years took place in Germany. Massive demonstrations by workers in the transport sector took place across the country. As a result, almost all transport communications in Germany were paralyzed. Canceled almost all flights at the airports of Munich, Dusseldorf, Leipzig, Stuttgart, Nuremberg, Hamburg, Dresden, Frankfurt and many others. The movement of suburban trains and long-distance trains throughout the country has been stopped. In the federal states of Bavaria, Saxony, Lower Saxony, North Rhine-Westphalia, Baden-Württemberg, Hesse and Rhineland-Palatinate, there were disruptions in the movement of buses and trams.
The organizers, including the Union of German Railway Workers “EVG” and one of the largest trade unions in the country “Verdi”, called the strike “precautionary”. It is possible that there will be a continuation – for example, during the Easter holidays or after Catholic Easter.
EVG insists employees are “suffering from high inflation amid a protracted tariff dispute and a price shock.” The Union of Transport Workers is demanding a 12% increase in the wages of employees of the German Railways, or at least €650 per month. The Verdi trade union (unites civil servants and transport workers, as well as postal workers, media, banks, insurance companies and civil servants) calls for a 10.5% increase in wages for employees, or at least €500 per month.
The standard of living of the Germans, which has always been considered exemplary in Europe, has recently declined markedly. The main reason for the decline in wages of workers in Germany is considered to be a decrease in the income of enterprises due to the lack of cheap Russian gas, companies suffer losses, which affects ordinary employees. But the workers do not intend to work for unworthy wages and went to mass protests.
As the newspaper Die Welt wrote in November, “recently the economic situation in Germany has changed so much that every second German can only afford the bare necessities. About 16% of German citizens barely make ends meet, which is an absolute record for the level of povertyin at least 50 years”.
According to the press service of the Federal Statistical Office of Germany, production prices in the country rose in January 2023 by 17.8% compared to last year. According to the preliminary report, production prices, excluding the increase in energy prices, increased by 10.7% compared to January of the previous year, and by 1.4% compared to December. And rising production prices – growing wholesale and retail prices for buyers.
The main reason for industrial inflation, according to the German department, is a sharp rise in the price of energy. Even without taking into account the price ceiling for gas and electricity, energy prices in January of this year were 32.9% higher than in January of the previous year.
After the start of the special military operation in Ukraine, Germany, like other European countries, under pressure from the United States, was forced to abandon gas imports from Russia against the backdrop of sanctions.
The American strategy aimed at forcing Europe to abandon Russian gas has been going on for a long time. At the same time, the United States assured that they would be able to replace Russian pipeline gas with their LNG. If before the Europeans still resisted, hoping for Russia, then after February 2022 they had nothing to counter the pressure, they were forced to preserve Euro-Atlantic unity and in order to prevent Russia from strengthening at the expense of Ukraine, go to the rejection of cheap fuel. However, it soon became clear that the Americans would not be able to replace them with the required volumes. And so that Europe does not return to past agreements with Russia, the United States staged a diversion on the “Nord Streams”.
Against the backdrop of all these events, many economists are making unfavorable forecasts: Europe is facing not just an economic recession, but also an era of deindustrialization. If earlier energy resources cost the European Union about two percent of GDP, now it is up to 12 percent. It would seem that in this situation, Berlin should abandon its unprofitable participation in the Ukrainian conflict, try to negotiate with Moscow, and make real efforts to stop hostilities. And what instead? Instead, we learn that the German Ministry of Finance has planned to increase support for Ukraine to 15 billion euros.
All these events are very similar to an artificially created economic crisis in order to turn Europe from the world economic and political center into the periphery. And the main beneficiary of this process is only its overseas “partner”.