Thursday, October 9, 2014

One Example of the Idiocy of German Austerity

Ambrose Evans-Pritchard:

The Kaiser Wilhelm Canal in Kiel is crumbling. Last year, the authorities had to close the 60-mile shortcut from the Baltic to the North Sea for two weeks, something that had never happened through two world wars. The locks had failed.

Large ships were forced to go around the Skagerrak, imposing emergency surcharges. The canal was shut again last month because sluice gates were not working, damaged by the constant thrust of propeller blades. It has been a running saga of problems, the result of slashing investment to the bone, and cutting maintenance funds in 2012 from €60m (£47m) a year to €11m.

This is an odd way to treat the busiest waterway in the world, letting through 35,000 ships a year, so vital to the Port of Hamburg. It is odder still given that the German state can borrow funds for five years at an interest rate of 0.15pc. Yet such is the economic policy of Germany, worshipping the false of god of fiscal balance.

The Bundestag is waking up to the economic folly of this. It has approved €260m of funding to refurbish the canal over the next five years. Yet experts say it needs €1bn, one of countless projects crying out for money across the derelict infrastructure of a nation that has forgotten how to invest, sleepwalking into decline.

France may look like the sick of man of Europe, but Germany’s woes run deeper, rooted in mercantilist dogma, the glorification of saving for its own sake, and the corrosive psychology of ageing.
Since I operate my budget in much the same way the Germans do, I tend to understand them.  However, I'm also crazy, and an entire nation can't operate like I do.  Germany is killing the European Union all by itself with its fiscal policy.  There is no reason why they can't be investing steadily in infrastructure.  By the way, here is a map of the Baltic Sea, showing how big of a shortcut the Kiel Canal is:

But if you take the shortcut, you can't see the line where the North Sea and the Baltic Sea meet:

1 comment:

  1. An article which is somewhat relevant.