shift in priorities
During the war, Germany discovers its economic interests
A commentary by Max Borowski
03/28/2022 2:59 p.m
Are we willing to sacrifice our economic interests to protect lives? The answer obviously depends crucially on whose life it is about. The shift in the current debate about Ukraine compared to the Corona crisis can hardly be explained otherwise.
It’s about life and death. Those in government around the world must act to stop or at least limit the danger and to protect the lives of tens of thousands, maybe more people. The costs for this are enormous. But there is no question that for the German federal government, life and health are far more important than economic interests. Just formulating such a consideration is considered disreputable – in 2020 in the Corona crisis, when the government and parliament with a large majority sent Germany into one and then another and another lockdown, almost completely paralyzing some industries for more than a year , destroying thousands upon thousands of economic livelihoods. Like many other countries, Germany plunges into an economic crisis of unprecedented dimensions in peacetime. But the political consensus is broad and rock solid: economic interests must not be placed above human life.
Two years later, largely the same political figures are again faced with such a deliberation: How far is Germany willing to go to resist Russia and its war of aggression, which has already cost thousands of lives. This time, the federal government vehemently resists the demand to take what is probably the most effective measure, but one that is most expensive for Germany. In this case, for example, that would be a comprehensive ban on imports of Russian energy. This would help Germany to dry up Putin’s most important source of income.
Of course, there are huge differences between the two situations, so that one can come to the conclusion that an energy import ban is not justified or not at all effective. What is revealing, however, is the different way in which arguments are used in this weighing process. The framing for both sides of the business versus life inequality is very different from two years ago.
During his appearance on ARD yesterday with Anne Will, Chancellor Olaf Scholz warned, among other things, of a “severe economic crisis”, of the loss of “an incredible number of jobs” and of a danger to “mobility”. Economics Minister Robert Habeck even feared for “social peace” in Germany in the event of a gas import ban. Nobody uses the term economic interests, although all of this precisely describes Germany’s economic interests, which were also at stake in the Corona crisis two years ago.
Gut feeling instead of “Follow the Science!”
It seems as if politicians have suddenly discovered what the economy is there for, but at the same time have lost the just over-confidence in their own ability to steer and help it. As Finance Minister at the time, Scholz reacted very differently to the Corona crisis. He launched one aid package after the other with ease in order to cushion the dramatic consequences of his own government’s policies for the economy with “boom”. In order to avert the impending wave of bankruptcies, the obligation to register for bankruptcies was simply abolished. Job losses were largely prevented by a practically unlimited expansion of short-time work benefits.
Economic analyzes clearly show that the consequences of an energy import freeze are comparable to those of the lockdowns during the Corona crisis, and financially they would probably even be less catastrophic. Short-time work allowance, company rescue package, targeted subsidies: The funds tested in the Corona crisis could also help this time. Scholz reacts angrily to appropriate advice from science. It was “irresponsible to add up any mathematical models that don’t really work,” blurted out the Chancellor. How was it again with Corona? At that time, lockdowns with dramatic effects were justified not least with scientific model calculations for the pandemic. “Follow the science!” was the battle cry back then. Now the federal government prefers to follow a vague gut feeling and the industry associations, both of which say: stop gas? too expensive!
Scholz’s argument that export earnings of up to a billion dollars a day are of no use to Putin is also untenable, since strict financial sanctions have been imposed on the Russian central bank, among other things. In fact, Putin needs the foreign exchange from exports or, alternatively, ruble purchases from Western energy customers more urgently than ever to undermine the effect of these sanctions on the Russian currency. An energy boycott would hardly force the dictator into an immediate ceasefire. However, Russia’s economic power would be immediately severely weakened and with it its ability to sustain the war effort in Ukraine. An import ban could save lives in Ukraine, but above all prevent Putin from instigating further wars in the future.
Why is the weighing of “life against economic interests” so different? The only thing that is clear is that the alleged factual arguments that are currently being used cannot justify this postponement of the debate.