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Angela Merkel’s mania for austerity is destroying Europe, says Mehdi Hasan

The German Chancellor is terminating growth and pushing us towards a new Depression.

Which world leader poses the biggest threat to global order and prosperity? The Iranian president, Mahmoud Ahmadinejad? Wrong. Israel’s prime minister, Binyamin Netanyahu? Nope. North Korea’s Kim Jong-un? Wrong again.

The answer is a mild-mannered opera fan and former chemist who has been in office for seven years. Yes, step forward, Chancellor Angela Merkel of Germany, whose solution to Europe’s financial crisis – or lack thereof – has brought the continent, and perhaps the world, to the edge of a second Great Depression. “World Bank warns that euro collapse could spark global crisis”, read the headline on the front of the Observer on 17 June.

With apologies to Mike Godwin and his eponymous law, Merkel is the most dangerous German leader since Hitler. Her eight predecessors – from Konrad Adenauer to Gerhard Schröder – presided over a manufacturing miracle at home and the rehabilitation of Germany’s reputation abroad. Under Merkel, however, the country finds itself isolated once again, loathed and feared in equal measure.

Cartoons in the newspapers of Germany’s neighbours have depicted the chancellor with a Hitler moustache or wearing a spiked, Bismarck-era military helmet. Commenting on the phenomenon, the columnist Jakob Augstein observed: “Her abrasive pro-austerity policies threaten everything that previous German governments had accomplished since World War II.” Merkel, Augstein rightly noted, is “a radical politician, not a conservative one”.

Neighbourhood bully

Merkel did not cause the financial crisis; that (dis)honour still belongs to the world’s “top” bankers. But her deficit fetishism and obsession with spending cuts are exacerbating the continent-wide debt-and-growth crises that threaten to upset more than six decades of pan-European unity and stability.

Then there is her bullying tendency. The majority of Greeks voted on 17 June either to delay or to cancel the EU-imposed austerity plan; up popped Merkel the next day to warn: “No departures can be made from the reform measures . . . We have to count on Greece sticking to its commitments” – and to slap down her foreign minister, who had suggested that the EU might give Greece more time to do cuts.

Merkel prefers to fiddle as Athens burns – and Madrid and Rome, too. Youth unemployment in Spain and Greece is hovering around 50 per cent; in Italy, a third of 15-to-24-year-olds are out of work. Riots beckon as Europe’s far right attracts new supporters. It is ironic that the leader of a nation paranoid about and offended by any mention of its Nazi period seems so relaxed about the rise of anti-austerity, neo-Nazi parties across the EU, from Marine Le Pen’s National Front in France to Greece’s black-shirted Golden Dawn to the fascists of Jobbik, now the third-largest party in Hungary’s parliament.

Merkel’s supporters argue that this is unfair. She is, they say, standing up for hard-working Germans who are weary of bailing out their feckless southern European neighbours. This is nonsense. First, figures released by the OECD show that the “lazy” Greek worker labours for 2,017 hours per year, which is more than the average in any other EU nation – and more than 40 per cent longer than the average German works. So a little less Schadenfreude, please.

Second, it isn’t just southern Europeans who are revolting against fiscal sadism. In May, Mer­kel’s Christian Democrats suffered a humiliating defeat in an election in Germany’s most populous state, North Rhine-Westphalia. It was the party’s worst result in the state since the Second World War. Ordinary Germans are starting to acknowledge that austerity isn’t working.

But Merkel won’t budge. She is a purveyor of the conventional wisdom which says that the economy is like a household that can’t borrow or spend more than it earns. But economies are not households – or credit cards! – and common sense tells us that the solution to a downturn caused by a prolonged drought in demand is not to reduce demand further (by slashing spending). History teaches us that the Great Depression wasn’t helped by Herbert Hoover’s cuts in the US and, in pre-war Germany, it was mass unemployment, not hyperinflation, that propelled Hitler to power in 1933.

Fiscal self-flagellation

In a study published in 2010, analysts at the International Monetary Fund found just two cases, out of 170 examples across 15 advanced economies between 1980 and 2009, in which cuts in government spending turned out to be expansionary for the economy overall. They concluded: “Fiscal consolidation typically has a contractionary effect on output.”

Merkel’s insistence on fiscal self-flagellation, her unwillingness to countenance any fiscal stimulus by Germany or an easy-money policy by the European Central Bank, have pushed depressed countries such as Greece further into depression. The recent announcement at the G20 summit in Mexico that Merkel may now be willing to allow eurozone institutions to buy up the debt of crisis-hit member countries is too little, too late.

This isn’t just about geopolitics or macro­economics. Europe’s austerians have blood on their hands. Suicide rates are up by 40 per cent in Greece; the birthplace of western democracy is being remorselessly reduced to the status of a developing country. Meanwhile, Merkel, as the US economist Robert Kuttner wrote earlier this month, “continues to pursue Germany’s narrow self-interest . . . [because] Germany benefits from the rest of Europe’s suf­fering in two ways – expanded exports and dirt-cheap money”.

In denial and bent on austerity über alles, Merkel is destroying the European project, pauperising Germany’s neighbours and risking a new global depression.

She must be stopped. 

Mehdi Hasan is the author of the ebook “The Debt Delusion” (Vintage Digital, £3.74). For the New Statesman's position on the Eurozone crisis, read our leader here.

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 25 June 2012 issue of the New Statesman, Europe’s most dangerous leader

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Archbishop Welby and the hidden price of being Mister Nice Guy

Doubtless Welby’s supporters will find such a description rude to the point of impiousness – but for those of us who live in an uncloistered world, the most significant indicators of his true nature lie first in his appearance.

The most important thing about Justin Portal Welby, the 105th Archbishop of Canterbury and Primate of All England, is that he’s not Rowan Williams. How we all miss Rowan Williams! The whole point of the Established Church is that its ministry is for all Britons, not just confessing Anglicans; and Dr Williams achieved this difficult task brilliantly. That he did so was, in large measure, due to his appearance: the most fanatical adherent of sharia law hearkened to his fluting emollience, because, resembling as he does a fictional wizard straight out of central casting, they assumed he was either Gandalf the Grey, or Albus Dumbledore, or possibly both.

With Dr Williams’s successor we must bear witness to a marked decline in the archiepiscopal phenotype. Far from resembling some wand-waving sorcerer, and despite all the rich caparisoning, Justin Welby still looks like exactly what he is: a superannuated Old Etonian oil executive from west London with a sideline in religiosity. His is not a bonny countenance; rather, he resembles a constipated tortoise with sunburn. Frankly, he could do with a beard – the more patriarchal the better – simply to cover up that sourpuss.

Doubtless Welby’s supporters will find such a description rude to the point of impiousness – but for those of us who live in an uncloistered world, the most significant indicators of his true nature lie first in his appearance, and second in the manner of his ordination.

Welby is one of Sandy Millar’s men. (And I say “men” advisedly.) When Welby heard the call to be ordained in the late 1980s he was initially rejected by the then bishop of Kensington, who said: “There is no place for you in the Church of England.” Prophetic words, indeed. It was Sandy Millar, one of the founders of the evangelical – indeed, charismatic – Alpha course, at Holy Trinity Brompton, in London, who came out to bat for Welby. The evangelicals must have been delighted when they got one of their own into Lambeth Palace, yet ever since he took up his crosier he’s been insidiously sticking it to them. I’m going to explain why, but first a word or two about evangelicals.

It’s disconcerting the first time it happens to you: you’re standing up in church, ready to groan your way apathetically through another fusty Victorian hymn, when instead of the moaning of a clapped-out organ, an electric guitar strikes a resounding chord and the worshipper next to you bursts into enthusiastic song. Worse is to follow: for, as she warbles, she slowly raises one arm, extends it, and begins to wave it about like a tree bough while the other arm remains rigidly at her side. Looking around you, you see that the congregation is like unto a forest: so many raised and undulant limbs are there. Yes, you have fallen among evangelicals – and if you thought ordinary Anglicans were a bit too nice then you ain’t seen nothing yet.

Purely to show open-mindedness, my wife attended an Alpha course run by one of our son’s schoolfriend’s parents, who was an evangelical minister. After a few weeks she began to seem a little – how can I put it? – spiritually pained, and when I asked her what the matter was, she said she was having something of a crisis of no faith. “It’s just that they’re so very nice,” she said, “and the God they believe in is so very nice, too. They make me feel anxious I might be upsetting Jesus by not believing in Him as well.”

Nice as he may be, Welby remains an evangelical, and evangelicals have a tricky time when it comes to homosexuality, because although not exactly fundamentalists, they nonetheless cleave strongly to the Word of the Lord, rather than chipping up to the church fête from time to time to buy a few tombola tickets. So, simply by looking into his own heart, Welby knows the situation is intractable: those homophobic Africans and redneck Americans cannot be appeased, and though he personally is opposed to gay marriage, he has said he’s “always averse to the language of exclusion when what we are called to is to love in the same way as Jesus Christ loves us”.

Welby seems to feel Jesus loves us by letting us go, because he is now making noises about a “looser relationship” between the various Anglican churches: one in which – while they all remain attached to the Church of England – the connections between them become more attenuated. Some of his evangelical chums must be swaying with anxiety rather than enthusiasm but they should rest easy; on all other important matters the archbishop is behaving in an exemplary fashion.

Not a week goes by without him making some anodyne statement or futile gesture condemning food banks (then asking people to give to them), offering refugees tokenistic accommodation in the grounds of Lambeth Palace, and generally mithering on about the scourge of poverty while giving spiritual succour to those who’re doing very nicely out of the status quo. ’Twas ever thus: our Established Church may well be for all Britons, but, in Justin Welby, we have a prelate who speaks eloquently for the . . . few.

Next week: Madness of Crowds

Will Self is an author and journalist. His books include Umbrella, Shark, The Book of Dave and The Butt. He writes the Madness of Crowds and Real Meals columns for the New Statesman.

This article first appeared in the 08 October 2015 issue of the New Statesman, Putin vs Isis