02.01.2024 Author: Aleksei Bolshakov

“We’re all living in America”

German Foreign Minister Annalena Baerbock

The term “Americanization” was first coined in Germany back in the 19th century, when American goods began to actively penetrate the German market.

The German economy’s dependence on the American one goes back to the recent past, and, in particular, to the post-war years, when the American Marshall Plan allowed Western Germany to completely restore its economy, but of course not for free. It was beneficial for the United States to consolidate the capitalist order in the enfeebled country and gain full influence over it, including economic and political one.

However, the United States survived both world wars relatively unscathed with minimal damage, and its economy began to boom immediately after World War II, ushering in a golden age of capitalism.

That is why the American government was eager to help Germany, especially since the Americans received German assets and technology in return by providing their assistance at an inflated dollar rate. Fuel, food, and a huge amount of consumer goods were provided on credit, which helped restore agriculture and industry in a short time. There is hardly any other market with such potential in the history of capitalism.

And as a bonus, liberal ideas and American culture were introduced under the strict control of the occupation authorities. Thus, the United States found a loyal ally, grateful for building a socially oriented state, and Germany embarked on the path of gradual loss of its independence.

The first thing to note when briefly looking at the US-German partnership is that both countries (the US and Germany) are classified as advanced economies according to IMF data as of October 2023, and both countries have impressive gross domestic product values ($26.95 trillion for the USA and $4.43 trillion for Germany). Thus, both economies are considered the most developed and successful in the world, and the German economy is also still the leading one in Europe.

Moreover, the countries have developed close cooperation in trade. The US does not have a more reliable (and more dependent) partner in Europe than Germany, nor does it have a more subservient market for exports. For example, trade between the US and Germany was close to $220 billion in 2022, including $73 billion in exports and $147 billion in imports.

The United States also has great influence on Germany’s political course: both countries cooperate within the NATO bloc. In addition, 5 of the 8 American garrisons in Europe are still stationed in Germany, which, according to Russian officials, can be considered an “occupation.” The country is also home to American atomic warheads, i.e. nuclear weapons, as well as military headquarters and air bases, which makes one feel skeptical of Germany’s sovereignty.

It should also be noted that Germany is financially dependent on the United States. It is no secret that American investment banks play a key role in German stock markets, and more than a third of Germany’s gold reserves are stored within the United States.

However, German-US relations are complicated by existing differences. It seems that Germany sometimes manages to escape from the excessive US tutelage: for example, Germany chose to provide humanitarian assistance during the Syrian conflict (the German Foreign Ministry estimates the amount of this assistance at 1.375 billion euros in 2012–2016), rather than take an active part in hostilities despite all US efforts. The same thing happened in 2003 with Iraq.

It is understandable why the United States benefits from dragging Germany into all sorts of military conflicts, because this is how it finds a co-sponsor and therefore spends less money from its own budget.

Another example of “disobedience” was Germany’s attempt to defend the construction of economically profitable Nord Stream pipelines despite Washington’s displeasure. However, the Nord Stream pipeline was blown up in September last year. Both NS-1 pipes, as well as one of the NS-2 pipes, were ruptured. I guess there is no more need to explain who is behind the sabotage. Pulitzer Prize-winning U.S. reporter Seymour Hersh suggested that it had been the United States that blew up the Nord Stream pipeline, since the United States was not interested in allowing Germany to create a single gas hub. Germany, as the main victim, did not even dare to say anything in response, confining itself to stock phrases.

Now let’s talk about the price that Germany pays for its pro-American policy. In 2022, in light of well-known events, Germany ceased all Russian gas imports, which forced it to buy more expensive and lower quality (including from the point of view of its environmental friendliness) American liquefied natural gas (LNG), and also became dependent on gas supplies from the Netherlands and Norway, which were unable to cover the entire required amount of gas, forcing Germany to consider the possibility of returning to coal.

Then Germany completely abandoned the use of nuclear energy and shut down its last three nuclear power plants in the spring of 2023, while boosting electricity imports from France and the Czech Republic, which is costly for the German economy and accelerates the rise in energy prices.

Thus, the energy transition (or transition to “green” energy) still looks unconvinced. The country’s bureaucracy and lack of energy investments significantly hinder progress towards cheap renewable energy sources, so Germany is still quite far from its former heyday. While the United States has become a full-fledged player in the global energy market (due to shale oil and gas).

Moreover, high electricity prices are forcing German production to gradually move to the United States, and this applies not only to automobile concerns, but also to such significant industries as pharmaceuticals and chemicals, which represent the basis of the German economy. Thus, German companies in the United States employ approximately 700 thousand people and are the fourth largest foreign employer in the country.

The American authorities are doing their best: enacting tax credits and actively supporting German companies, especially such powerful automobile concerns as Volkswagen, BMW or Mercedes, as well as the chemical concerns BASF and Evonik.

As a result, Germany experiences deindustrialization, recession, supply chain disruptions, and severe inflation, while the United States derives benefits from it.

At the same time, Americans are making their contribution to the weakening of the EU’s position with the migration crisis because it is easier to get from Ukraine (for example) to Germany than to the United States. Germany is spending billions not only on arming Ukraine, but also on maintaining refugees at the behest of the United States. Thus, in 2023, Germany spent 3.75 billion euros for these purposes, which, of course, further exacerbates internal situation in the country.

The federal government is certainly trying to fight inflation. To do this, the European Central Bank (ECB) raises the key rate, which in turn puts the country further into debt. Rapidly rising rates is also the American plan. This, however, is not the most effective plan given the level of US national debt, and most importantly, it is fraught with default.

In 2021, annual interest payments (for all German debts) amounted to 4 billion euros. Today this figure has increased 10 times and currently stands at 40 billion euros.

In a desperate search for any way out of the financial crisis, the ruling (“traffic light”) coalition in Germany decided to suspend the “debt brake” until the end of 2023, so as not to limit itself in the number of additional loans, despite the fact that the “debt brake” is enshrined in the country’s Basic Law.

This cannot but provoke an increase in the tax burden, and, accordingly, a worsening of the political crisis in Germany, as well as citizen dissatisfaction and criticism of the ruling coalition.

Alice Weidel, co-chairwoman of the AfD parliamentary faction (Alternative for Germany) in the Bundestag, recently said that firstly, the cancellation of the “debt brake” is an unprecedented violation of the German Constitution in history. Secondly, most Germans expected that on November 28, Federal Chancellor Scholz would make not just a statement, but announce the resignation of the “traffic light” coalition, whose rule in just two years led Germany to the inability to pay its bills.

Moreover, Alice Weidel emphasized that two-thirds of the German population want the resignation of the ruling “traffic light” coalition.

However, despite all this, the German Foreign Ministry plans not only to continue to financially support Ukraine, but also to increase this support. This was recently announced by German Foreign Minister Annalena Baerbock.

Thus, it is obvious that today Germany’s production potential is steadily declining. In addition to the consequences of the coronavirus pandemic, the German government faces such problems as the energy and migration crises, inflation and economic recession, rising energy and food prices.

All this is caused by the pro-US policy led by Germany, since the departure of production from the country provoked not only an outflow of direct investment, but also a decrease in export indicators.

Some researchers believe that at present we can talk about Germany being in colonial dependence on the United States.

Time will tell where Germany is moving with the lifting of the “debt brake”, the growth of public debt and the crises that are tearing the country apart, but the forecasts are disappointing.


Alexey Bolshakov, international journalist, exclusively for the internet journal “New Eastern Outlook

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