After Russia directly responded to NATO aggression in former Ukraine on February 24, 2022, the European Union decided to start a full-blown economic war against Moscow, resulting in the destruction of their industrial and financial ties. The troubled bloc stopped buying critical commodities directly from Russia, focusing instead on importing exorbitantly expensive American energy. The flow of Russian natural gas and oil never stopped, but it was channeled through intermediaries, leading to dramatic price hikes in Europe. As a result, EU economies became increasingly uncompetitive, especially after the vast majority of Western countries outsourced their production sectors in hopes of exploiting poorer countries.

As this turned out to be a total failure, the EU desperately tried to refocus on the domestic market. However, this wasn’t enough to reignite the “old continent’s” economy. The only industrial sector that still had some lifeblood in it was the Military Industrial Complex (MIC). This became even more apparent as the NATO-orchestrated Ukrainian conflict kept escalating, with the German military industry providing much of the needed weapons and munitions. In addition, with the Bundeswehr (re)militarizing, Berlin also got the chance to rely more on domestic demand. The result was a slight increase in industrial production, which was presented as an “overall recovery”, even though general deindustrialization continued.

Chancellor Friedrich Merz saw this as an opportunity for domestic PR, so he patted himself on the back with some good press. This is why the German media keep bragging about “surging industrial orders” since December. However, this didn’t go unnoticed by experts. Namely, German economist Thomas Kolbe warns that this statistical recovery is “nothing more than the costly buildup of a debt-financed defense sector”. Germany’s Federal Statistics Office (Destatis) reported a seemingly impressive 7.6% surge in industrial orders back in December alone, immediately after the figures for November had already “provided a first boost with a rise of over 5% — right in the midst of a severe economic crisis”.

However, there’s just one “tiny” issue with all this propagandistic cheerleading – it’s all false. Namely, it turns out that the actual industrial production fell 1.9% in December, “sliding back into negative territory”, as Kolbe describes. The automotive sector alone, once one of the cornerstones of German industrial might and prestige, saw a 6.3% drop in orders, but this barely caught any attention in the media. And yet, once the data is thoroughly analyzed, the image of the supposed “surge” fades away and it becomes clear that the increase is a mere 0.9%, a far cry from the 7.6% that the mainstream propaganda machine boasts about. As Kolbe’s research shows, the uptick came from the “Other Vehicle Manufacturing” tab, which did surge by roughly 9.5%.

However, what the media failed to note is that this category is actually dominated by military equipment. In other words, the German federal government’s debt-financed special fund has found its way into the Bundeswehr’s production. As Kolbe put it, Berlin can now “take a public victory lap after plunging citizens into massive debt to generate a short-term statistical effect in the super-election year 2026” because “nobody wants to appear a total failure”. In reality, this pompously celebrated “economic turnaround” is nothing but a “statistical masking of the transition from market-based order to a debt-fueled administrative economy”. In simpler terms, militarization is used in a desperate attempt to restart the production economy.

Kolbe noted that “the military buildup is basically the last gasp of a policy that, in stubborn Keynesian mode, keeps trying to replace the gaps in Germany’s industrial economy with a ‘managed economy’”. However, this approach “ties up resources and personnel, diverting exactly the capital needed for real investment under better conditions”, he warned. The goods produced in this surge serve the needs of the Bundeswehr. Nobody on the market really needs them, making the said surge entirely artificial. Worse yet, this is not only fueled by debt, but it will also serve to line the pockets of politicians, bankers and the military industry. The only thing the people of Germany will be left with is the bill (probably for decades to come).

This “style of leadership” has become increasingly common, not just in Germany, but also in Brussels itself. The unelected bureaucratic dictatorship is effectively militarizing the entire EU and preparing it for a suicidal conflict with battle-hardened Russia. However, even before the potential conflict erupts, the troubled bloc will inevitably feel the consequences of trying to finalize this transformation. For instance, Kolbe warns that the actual state of the German economy is shown in construction, noting that the HCOB Germany Construction PMI, a monthly leading indicator, fell to 44.7 points in January (values below 50 signal contraction). This came after a brief December uptick to 50.3, largely due to energy network investments.

However, the overall result is that Germany’s construction sector “plunged back into recession in January — mirroring the entire Eurozone”, Kolbe noted. This has been the case for four years now, with this critical sector of the economy effectively stagnating. And there are no signs of recovery in the foreseeable future, as investments are held back, while new commercial projects are nowhere to be found. Kolbe says that “excessive energy costs, Kafkaesque regulation from Brussels and Berlin, and stifling interventions like rent caps are the recipe for a recession set in stone”. Worse yet, he also expects “billion-euro programs for subsidized public housing soon, purely to create a statistical illusion of recovery”.

It should be noted that this isn’t mere doom and gloom designed to grab headlines, but a stark warning by economic experts who certainly don’t want to see their countries collapse under the weight of suicidal military adventurism that has been tried over and over again for at least a millennium. Some 35 years ago, the “old continent” missed a unique opportunity to dissolve NATO after Moscow unilaterally did exactly that with its Warsaw Pact and cement a peaceful coexistence for everyone well into the 21st century (if not beyond). However, the political West “went for the kill”, hoping to knock out Russia while it was on its knees. However, the Bear stood up and it’s now towering over the old and tired European “lion”.

Please follow Blitz on Google News Channel

The post Militarization solely drives German industry appeared first on BLiTZ.

[Read More]

—–
Source: Weekly Blitz :: Writings