Merkel faces the crisis – at home

The German central bank has lowered Germany’s outlook. Instead of the glorious recovery originally expected, there’s a minuscule 0.3% growth expected now. After the Netherlands, Finland and France the crisis has reached Germany. Will chancellor Merkel wake up now?

The Germans now have French standards. The 0.3% is exactly the level France was expected to come in earlier this year, before its own forecasts had been revised. At this time France was already “Europe’s sick man” and considered a time bomb for the Euro. Now Germany is at this level, with the 2014 outlook meager.

The German economic miracle has fizzled out, the consequences of the failed economic policies are catching up. It was Merkel and her finance minister Schäuble who originally pushed for all of Europe to start saving at the same moment.

Stability and fiscal compacts as well as the debt reduction led to the same result: an economically less stable Euro zone and higher debt rates all over the place. The debt is growing as a result of the shrinking economy.

I’d like to cheer if it weren’t that depressing. Through the consequences of the collapsing markets and shrinking exports the crisis finally hits its root cause – despite Germany having been the main beneficiary of it so far.

Merkel catches the crisis and just in time before the federal elections. If unemployment starts rising – as is expected – this may even affect the election outcome.

Will she change course now? Does the liberal-conservative coalition dare to come out with an economic mea culpa, similar to the IMF’s statement? I don’t expect it.

A departure from austerity would be required now, especially since Germany can still afford it. But since Merkel’s old buddy central bank head Weidmann is strongly opposed, this is doubtful.

Social democrat candidate Steinbrück and green leader Trittin should raise vocal opposition to Weidmann now and challenge Merkel publicly. Are we going to still see that?