this post was submitted on 10 Feb 2024
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The lack of investment in strategic infrastructure, the lack of public expenses, and the mostly monolithic neoliberal economic politics bring them to this situation.
At one point, you need to invest public money in the infrastructure that work for the day-to-day life of everyone. In this case, we speak about the railway network. Europe can't be car centric like the US. The geography and the urbanism of European towns and cities don't allow this perspective.
This has implication on the job market as poorer can't afford a job. The neoliberal politics targeting the social welfare make people poorer and this had influences on the consumption and the economy. It's of course more complicated than this. But, it gives an idea of the situation.
Rail is one thing but there are also others like bike and pedestrian infrastructure, education, internet, digital streamlined government processes. Also maintenance of infrastructure in general.
Rail and other transport decisions do highlight how a lot of the economic policies do not reflect what makes sense but what the existing industry wants to survive for a few more years without adapting.
Another issue is not only the establishment of better infrastructure, but also the maintenance of existing infrastructure.
The postal services are a great example of failed privatization.
In many areas letters now take weeks to arrive or dont arrive at all. Meanwhile many processes require written communication by law. My fathers business was regularly struggling with it. Think about it. You get your invoices late. Your invoices to customers are late. You receive letters from the tax office demanding a reply within two weeks, but they took three weeks to arrive. Each and every time you have to explain, that you couldn't act before, or you need to talk to your customers, why they didn't pay yet.
Germany is exceptional at creating itself so many inefficiencies that it is a cloes to a miracle when anything actually just works for a change.
Obviously the east of Germany is never going to prosper, there is no incentive for companies to go and open their doors in east Germany as they can then just move east a few more kilometer and get workers for 1/3 of the cost.
TSMC, CATL, Tesla, Intel or Avnet would disagree.
Do they though? They are building modern factories with high automations and are getting massive subsidies to do so.
Additionally they need a lot of jobs, the region is poor, so we can only hope that attracting a few high profile players can create an effect that causes others to gravitate there.
As this will most likely also alleviate the AfD problem.
Which one is it? No incentives? Massive incentives?
The first one is intrinsic incentives, the second one I should have called subsidies. You are correct it's messy like this.
While I do see a difference between those two "incentives", they are not that different to me. Both are about the general economic conditions which a company uses to determine where to invest. Also in both cases the conditions are influenced by politics, and shaped by financial policies.
It is distinctly different though. it is especially dangerous to rely on subsidies as a means for attracting businesses. There was an example of Nokia who received about 100 Million to build a cellphone factory in the 2000s. After the subsidies ran out ten years later, they moved the plant to Romania. This is the risk of subsidised business. You pay the difference for the poor conditions, don't receive more in return and then the business goes away anyways.
Well the situation is in east Germany unemployment is high, education and labour skill is reasonable to high, ground prices are low and it's in Germany (the incentives to chose to locate there).
But in the end if a company where to choose solely on those factors Poland and the Czech Republic have all these things (except being Germany) at much lower wages.. so the intrinsic incentives for those companies are to not locate to east Germany.
Hence the required subsidies for some of there companies.. an artificial incentive is added). That without it the companies would not be there, and in the end I would argue the proximity to Poland and Czech republic mean other companies will not choose east Germany.
So yes, we agree the subsidies are part of the whole package weighed by companies, the artificial incentive (subsidie) is only available to a limited group and this is why I think east Germany will remain a problem area for Germany.
Let's wait and see how they agree or disagree after the subsidies they received for moving there have run out, and some other place offers subsidies for setting up shop there.
Subsidy hopping is a thing.
And then they are surprised that people don't trust the government anymore and the fascists gain so much popular support. If you are too much stuck in your ideological corridor where austerity is the holy grail of politics and spending money is evil, and on top of that you are constantly fighting with your coalition partners and get nothing done that way, instead of helping your country out of this economic crisis, this is what you get
Nobody is surprised. The FDP knows exactly what they're doing, which is make as much politics blatantly in favour of their donors as long as they're in power. They don't care about what that does to the general populace or even how they're perceived for it. One or two elections later everyone will have basically forgotten about it again anyway and the whole shtick repeats.
It is not so much that everyone will have forgotten about it and more that they tend to go for first time voters who were maybe 10 years old the last time the FDP pulled the same thing.
I still blame those first time voters for not informing themselves properly before voting. They all should know people whom they could ask, and are old enough to remember, if they only cared enough.
This is what German people vote for. We didn't have 16 years of stagnation because FΓΌhrer Merkel ruled unchecked, we had it because people voted for that shit. And the moment the current government started to pick up the speed a bit and actually pushed some reforms through, the population had a full blown meltdown.
I'm sorry but I never voted for Merkel. Nor any of the other governments that ended up in power.
Doesn't matter, the majority did
We are talking about Germany here, not Italy. Oh wait...
Why invest in infrastructure when Germany and most of the EU has terminal demographics and poor energy policy? If anything they did the next generation a solid by not weighing them down with excessive infrastructure.