German Government Likely To Bail Out GM-Subsidiary Opel

Link to my article on CNS News today:

Dusseldorf, Germany (CNSNews.com) – As the global financial crisis lashes the auto industry, Germany’s federal and state governments look set to bail out Opel, a subsidiary of General Motors Corp., with a reported two billion euro ($2.6 billion) rescue package.

Opel’s German management, which requested the aid, is struggling with a cash-flow crisis.

German managers point to failings at GM’s insolvency-threatened U.S. head office in Detroit. They claim they are back-owed billions of dollars in investment. Germany’s GM-Opel management is also considering breaking away from General Motors Corp. should it apply for insolvency. Opel employs more than 25,000 people in the German states of Hessen, Thuringen, North-Rhine Westphalia and Rhineland-Pfalz.

Chancellor Angela Merkel called for an emergency meeting in her office on Monday afternoon to discuss options with GM’s European president, Carl-Peter Forster, GM-Opel chairman Hans Demant, and union boss Klaus Franz. Also attending were Finance Minister Peer Steinbruck and Minister for Economic Affairs Michael Glos.

Proposals on the table include a federal bond or guarantee of around $1 billion. This would be supplemented by another $1 billion guarantee from the four affected German states. The funds are reportedly needed to allow the cash-strapped company to continue manufacturing and to pay its creditors.

Read on here.

Germany To Obama: No More Troops For Afghanistan

Link to my article which appears on CNS News today:

Dusseldorf, Germany (CNSNews.com) – Germany has been effusively supportive of Barack Obama – opinion polls showed he had the backing of 85 percent of the population – but early signs of strain are showing with Chancellor Angela Merkel. She has warned the president-elect that she will turn down any request for more German troops in Afghanistan.

Merkel’s coalition partners in the socialist Social Democratic Party (SPD) are also sounding warning bells. In the build-up to national elections next September, however, the government is downplaying any potential for differences with Obama.

Read the rest of the article here.

Ills of Capitalism

There's been a flurry of anti-capitalist rhetoric in Germany of late.

The socialist SPD party in the governing coalition has been burnishing its lacklustre profile - seeking to distance itself from its centrist CDU partner on the one hand, and the ex-communist PDS party on the other.

This may seem a strange abandonment of the political centre. But in Germany the centre is very much to the left of where it might be found in the US or the UK. And the populist success of the ex-communists doesn't leave SPD leader Kurt Beck a lot of room to manoeuvre. And so he's been dusting off trusty old arguments about the iniquity of private capital, the wickedness of greedy corporate leaders, the locust-like threats of global investment, and all the rest of it. A strong central state managing everything is Beck's answer to these ills.

Stefan Theis, Newsweek's economics editor, gives an analysis of how such attitudes are actively fostered by Germany's (and France's) educational system. Capitalism and entrepreneurs are routinely blamed for the world's woes, says Theis, in the economics courses offered by their secondary schools and universities. State control is posited as necessary to curb the damage wrought by business. In this way, says Theis, France and Germany's elites are given an unbalanced view of business and the state.

Support comes from a reliable source. In the Guardian, Madeleine Bunting reviews Oliver James' The Selfish Capitalist, a study of the ramifications of what has been called Affluenza. James notes that the increased economic wealth brought about by capitalism hasn't brought increased happiness. In fact, it has apparently increased the incidence of mental illness, or at least the incidence of treatment for such ills. The inevitable conclusion, drawn by both James and Bunting, is that capitalism is therefore to blame.

Curious how politicians and intelligentsia of the left, having seen that socialism isn't much good at making citizens rich, now line up to flay capitalism for the problems material prosperity brings. The more so given that socialism's promise was always based on the pre-eminence of material goods.

Link to Bunting's review of Oliver James' The Selfish Capitalist:
The big question | Review | Guardian Unlimited Books

Link to Stefan Theis' article:
Foreign Policy: Europe’s Philosophy of Failure

Müntefering Resigns From German Government

Franz Müntefering, the socialist Employment minister and Vice Chancellor in Angela Merkel's coalition, has resigned to look after his wife who has cancer.

Müntefering has long been a bugbear of this blog's, mainly because of his posturing in Chancellor Schroeder's terrible government. Fulminating against the locusts of international capitalism (as was that government's wont), "Münte" blamed Jewish businessmen for Germany's economic woes. He might more usefully have looked at his own government's woeful 9 year record. Working with Chancellor Merkel has calmed him down as he has mediated between Merkel's centre-left CDU and his own socialist SPD parties. In comparison with the latter "Münte" almost resembles a man of reason, rather than the demagogue of limited brain he is.

Recently he was humiliated by his party's leader, a brutish, bearded mediocrity called Kurt Beck, in an arcane dispute about unemployment payments. Beck needed to improve his own profile within the party. He did so with a display of hard-left socialist rhetoric at Müntefering's expense. Now "Münte's" stepping down will give him a measure of revenge.

Müntefering's departure will destabilise the coalition. This could be good news for Angela Merkel, who leads in the polls, mainly because of her personal popularity. An election called soon would mean the end of this hopeless government, and a probable return to power for Merkel's CDU, supported by the centre-right FDP party.

For all the praise being heaped on "Münte" as he departs, this would be his only worthwhile legacy.