Last chance for Germany

We are not the only ones to have been pointing out that in the last decade or so Germany has been on a path to political and economic suicide. Tomorrow morning, Tuesday 18 March, unless a miracle happens, will be the moment when the German parliament inserts the shotgun into its mouth and pulls both triggers. At least that part will be quick – the headless clucking around however will be lingering.

The parliament pulling the trigger is not even the newly elected one – that hasn't been called into existence yet – but the previous one led by the failed Ampelkoalition, the 'traffic-light coalition' of SPD, CDU/CSU, Greens and FDP which fell apart ignominiously at the end of last year. In the last few days of its existence, this rump government of leftovers will be misused to pass a dramatic and far-reaching revision to the German constitution.

How did it come to this?

Since 2011 Germany has had a Schuldenbremse, a debt-brake, in its constitution. Sensitive thinkers are always unhappy at constitutions being tweaked for quotidian reasons, but it happens, so we have to just suck it up.

Currently the debt-brake restricts annual structural deficits to 0.35% of GDP. It is an idiotic construct. Just consider the simple fact that when GDP declines (in a recession, for example), the Government has even less to spend on pump-priming the economy. What would that Keynes chap say, I wonder? When GDP rises, the drunken sailors in the government can take over and spend as though there were no tomorrow. So much for fiscal responsibility.

After last month's election, the Chancellor to be, Friedrich Merz (CDU), found himself and his government in dire need of cash to finance all the wonderful infrastructure projects and the New Model German Army, which was going to rush to the defence of Ukraine with a march on Moscow. That project ended badly on the two previous occasions it was tried, but third time lucky, hey?

Merz didn't fuss about the debt-brake. He invented the Sondervermögen, 'Special Funds'. Even the brainiest scholastic philosopher will never work out how 'Special Funds' differ from old-school government debt. Having set the German language out of operation on this point, Merz proposed that the concept of these 'Special Funds' should, like the debt-brake, be incorporated into the constitution but be quite separate from the debt-brake, thus avoiding tedious discussions on government indebtedness.

The proposed new Article 143h of the constitution will allow the German state to spend anything up to 500 billion Euros on infrastructure over the next twelve years. Where all this money is to come from, at what interest rate and how it will be paid back (if ever) is not further specified.

Since this a a constitutional change it requires a two-thirds majority in parliament. In the newly elected parliament, the government of CDU/CSU and SPD will simply not have the votes. Merz's cunning plan is to pass this major modification while the old parliament is still sitting, in which case he will have enough votes with his existing partners the SPD and the Greens.

Squeezing through a major constitutional change which will affect dramatically the future of Germany in the last few dying days of the old parliament is at best unseemly and certainly highly undemocratic. Particularly the Greens, who will not be in the next coalition, will cast a long shadow over it. But palms have been crossed with Special Funds still to come and all such niceties have been abandoned. The great losers of the 2025 election, the SPD and the Greens have become the great winners.

But the situation is much, much worse.

In order to get the agreement of the SPD and the Greens to his cunning plan Merz has had to make make many major concessions on how and where these 'Special Funds' will be spent. The Greens – who won't even be in the next parliament – have wrung the worst concession of all from him: that Germany will be constitutionally committed to spending a large proportion of this cash in order to achieve 'climate neutrality' by 2045.

As Britain has discovered with its own Climate Change Act, which sets the goal of 2050 for achieving NetZero (aligned with the EU), the over-rigid German judicial system has now a reason to reject any project that does not reduce carbon dioxide emissions on constitutional grounds (with which there can be no argument).

Every building project, every road scheme, every factory development, every manufacturing industry, every aspect of private, commercial and public transport will have no chance of meeting this constitutionally prescribed goal. Every decision will have to be weighed against this single principle.

Therefore, just at the moment when Germany needs to revive its industry and renew its infrastructure, the new government will have to carry out more and more Green deindustrialisation, even though the Green party is not even represented in the new coalition.

Tomorrow, Tuesday 18 March, if that constitutional change is passed by the old parliament in its last gasps, Germany will plunge into the final stage of its existence. Perhaps the old DDR states, now almost completely AfD led, will decide they are better on their own again. Who can blame them?

Update 18.03.2025

Out of the 733 members of the German parliament, the Bundestag, 513 (~70%) voted today for the unfunded spending orgy in Friedrich Merz's suicide note. Having jumped the two thirds hurdle there, the measure now has to go to the upper house, the Bundesrat, but it will be nodded through.

The measure contains 500 billion Euros to spaff around more or less ad libitum together with an effectively unlimited amount to be blown on rearmament – unlimited that is except by the patience of the bond market, which sooner or later will make its feelings about this mountain of debt felt.

This shameful affair has made it clear – as though we had any doubts – that more than two thirds of German parliamentarians are docile dolts, as Private Willis said of the British Parliament nearly 150 years ago:

When in that House MPs divide,
If they've a brain and cerebellum, too,
They've got to leave that brain outside,
And vote just as their leaders tell 'em to.

Gilbert and Sullivan, Iolanthe, 1882. Act II.

That's the best I can do at the moment for cheerful drollery. The image of a new Germany, armed to the teeth, divided between East and West and struggling with social, economic and fiscal collapse, troubles my sleep.