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ECONOMY

Toasting times for Germany’s leftists

Roger Boyes, the Berlin correspondent of British daily The Times, explains why Germany’s leftists should raise a glass of bubbly to the global economic crisis.

Toasting times for Germany's leftists
Gysi gets his drink on. Photo: DPA

The Adnan restaurant in Berlin is famous for its €17 lamb chops and its truffled pasta so it was a bit of a surprise that champagne-socialists like Oskar Lafontaine and Gregor Gysi did not turn up at a recent party there for Der Spiegel journalist Jan Fleischauer.

Perhaps it was to do with the title of his new book, “Among Leftists – From One of Them Who Accidentally Became a Conservative.” Or perhaps they simply weren’t very hungry.

Still the place was full of top-shelf German right-wingers including Axel Springer’s Matthias Döpfner and Economy Minister Karl-Theodor zu Guttenberg. Plus a whole cruise ship full of second-fiddle conservatives in attendance added to the celebratory mood as if they had just won an election and were dancing on the graves of the left.

And you have to see their point. For some mysterious reason Europe’s left (except in tiny Iceland) is in retreat. We have the biggest crisis of capitalism in human memory and what is the hard left doing? Hiding under the bedcovers when this should be their hour.

Did not Oskar predict all this in his anti-globalisation books? Lafontaine was never shy before about telling us that he was right, even when he manifestly was not. It was his cleverly named party The Left that first identified bankers as “gangsters,” who called for bank nationalisations and massive taxes on the rich.

And yet there they are in opinion polls in recent weeks stubbornly stuck at 10 percent, just a nose ahead of the almost invisible environmentalist Greens. The centre-left Social Democratic Party (SPD) meanwhile is surging ahead thanks partly to Finance Minister Peer Steinbrück’s bullying of Ouagadogu and other shanty-towns like Zürich (one thing I have noticed over the years: Germans hate bullies in everyday life but love them in politics).

Steinbrück has understood something about the zeitgeist. The electorate wants to castrate bankers but at the same time wants politicians with testosterone, a kind of weird societal manhood-transplant. And this being a big election year, this is the season when voters get what they want.

But what about the country’s lefties? I worry about them. There was obviously a structural defect, an engineering problem as soon as The Left was born out of an awkward union of disgruntled western German trade unionists and eastern German ex-communists. The point of the merger was to soak up large numbers of unhappy west SPD voters who admired Lafontaine for leaving the Social Democrats in a pouty huff, but it never happened.

Instead, the western members of The Left are largely crazies and the kind of obsessive bean-counters that so scarred poor Jan Fleischauer’s childhood. The eastern leftists meanwhile have turned themselves from Bolsheviks into Mensheviks and from Mensheviks into Gutmenschen – they are the party that actually listens to their constituents and empties their bed-pans. How were these two bits ever going to merge? They are like two rats in a sack.

And so the only way The Left can survive is by constant radicalisation to disguise the cracks. Their programme shows that they have given up the idea of national government: a €100 billion future fund, another €100 billion every year for education, climate change measures and health, plus the scrapping of NATO.

The fundamental problem, of course, is that the Germans like their left-wingers to be cuddly.

The Left’s leaders were never as successful nationally as when Oskar preferred a glass of Sekt to class warfare. That is, he came across as a fat, loving father who liked to eat well. The same went for party-Gysi, dancing with women who were at least a metre taller than him. It was as if they were saying, yes, let’s have a revolution – but one in which every citizen, however poor, has the right to eat oysters washed down with a good dry white wine.

That, I discovered this week in a new biography written by Tristram Hunt, is what Friedrich Engels actually wanted. “Engels believed in cascading the pleasures of life – food, sex, drink, culture, travel – down to all classes,” writes Hunt. “Socialism was not a never-ending committee meeting, but a life of satiated enjoyment.”

Every Sunday, Engels would open up his house in London’s Primrose Hill and throw a party. August Bebel remembers leaving at two in the morning after a night of pilsner, claret and Maitrank.

Now that is a leftist political thinker who would get my vote. If Engels had been in charge, Fleischauer would not have had to write his reckoning with the German left-wing. And Gysi could have come along to Adnan and had a lamb chop with a good conscience.

For more Roger Boyes, check out his website here.

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ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

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