The German government has shifted into hyper-mode to defend its green patronage economy. To pay for it, heirs, high performers and savers are being drafted into service. The end of the eco-socialist nightmare will be convulsive and chaotic.
On Friday, the federal cabinet agreed to introduce a new EV subsidy. Roughly three billion euros are set to flow into this bloodless market segment over the coming years – a drop in the bucket compared to the vast sums used to artificially keep the green patronage complex alive. But it is a signal.
A Negatively Sloped Learning Curve
The decision joins a long list of political misfires in recent months – a list unlikely to end with subsidised industrial electricity, heat pumps or refinancing packages for wind turbines. The state simply has too much money at its disposal to be forced to abandon its wasteful, destructive project.
For Bavaria’s minister-president Markus Söder, the revival of this failed subsidy instrument was cause for a small celebration. He promised a “huge boost” for the domestic market, claiming state intervention would secure value creation and jobs – a thoroughly “Söderized” view of reality.
Once again, Söder proved that his personal learning curve has flattened into a downward-sloping line – a phenomenon broadly visible across European politics.
Debt Union And Professional Manipulators
Germany’s EV subsidy stands pars pro toto for the broader European situation. Public debt is exploding across nearly all EU member states. Next year, Germany will post net new debt of around 5.6% of GDP – placing it among Europe’s top debt creators.
This figure is honest – and shows the true fiscal position once the government’s accounting tricks, exemptions, “special funds” and skyrocketing municipal debts are properly added back in.
France and the UK look equally grim. Even once-disciplined Finland is stumbling toward 90% debt-to-GDP with a similarly large deficit. It can no longer be denied: Europe is trapped in a debt spiral.
Schäuble and the Troika
How times have changed. Some may recall the theatrically staged visits of former German finance minister Wolfgang Schäuble and the Troika, who – with maximal media firepower – pinned the sovereign debt crisis squarely on Greece.
In reality, it was perfect camouflage – designed to divert attention from the bailout of Germany’s banking and insurance sector, which had sailed into heavy waters due to political mismanagement.
The public was never meant to see what is now obvious: the EU has degenerated into a debt club trying to execute its ideological mega-projects – like the green transition – through a credit pump, with taxes and inflation serving as the extraction mechanism from ordinary citizens.
Heirs, asset holders, small business owners and the productive middle will pay the bill. The emotionally charged debate over inheritance taxes – and the faux rhetoric about “fairness” – reveals that the political class is now openly planning the confiscation of accumulated private capital.
Inflation as a Hidden Tax
The permanent crisis will inevitably lead to a growing state apparatus – a debt-financed Leviathan that accelerates the inflation spiral with every intervention. No one is supposed to notice how quickly money loses value in this environment. The seigniorage – the hidden gain – goes to the biggest debtor of all: the state.
With every new green initiative, every EV subsidy, every publicly funded wind turbine, the bill rises. Only the delayed price effect helps politicians obscure cause and effect and decontextualise the economic damage of their intervention.
Von der Leyen, Merz, Macron & Co. rely heavily on this effect. They hope the majority of voters never add one and one together – and never question the soft-edged tax squeeze and deliberate erosion of their savings.
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