Post sponsored by

MIL OSI Translation. Region: Germany / Deutschland –

Source: Koerber Foundation After the US elections, economic historian Adam Tooze wonders whether America can still react to global challenges. And he is skeptical about the recovery of the global economy – also because we are dealing with enormous and new uncertainties.

A bitter truth after the US elections: America is a torn country. We are dealing with two countries in America. And none of these will go away quickly. Or? It’s a stalemate, a trench war. Two political camps facing each other. The political situation is deadlocked; it is a blocked society and one that is polarizing and becoming increasingly radicalized. Can you react so well to the inner challenges? The extreme inequality and loss of the optimistic view of the American Dream for the majority of Americans? The extreme situation of minorities, especially black Americans, whose chances in life have deteriorated significantly over the past few decades, and is this also prepared for global challenges? To the changing world situation – yes, one really has to ask oneself whether such a state with such a policy is able to react constructively to it! The Trump camp cannot be said to have designed a sustainable project. The Republicans are capable of this, if we just think of George W. Bush or Ronald Reagan: They were formerly visionaries who wanted to implement a very specific policy. Donald Trump is missing that. He was unable to give a constructive answer to the question: “Why do you want to be president?” He only supported and confirmed the political culture and identity of his followers. But the current global crises require a joint approach and the ability to reach a consensus. Are there any chances that we can work on common solutions with America in the next few years? It is tragic that the limitations of American politics can become groundbreaking for global cooperation. There is a mistrust of government institutions and authorities. But this distrust is also rampant in Europe. We still have fond memories of the protests in Germany against the government’s corona measures. And you see the same thing in France and Spain. These are general problems of governance. And that also has consequences for global cooperation. How do you see the role of Europe? Does his ability to act globally need to be strengthened? It has become a matter of course to answer your question with “Yes”. Europe must do more. But under which premises and in which direction? And what structures need to be created so that Europe can act? In the spring it looked very bad with Europe: The corona pandemic was rampant and at the same time you felt like you were back in the years of the euro zone crisis 2010-2012. It was a really fatal crisis for the European project. At that time, the US had reacted better because, to everyone’s astonishment, the US Congress had passed a financial package. And that is precisely what was missing in Europe. The big compromise came in the summer with the adoption of the EU economic stimulus package. But where are we now? There is still a lack of approval in the EU Parliament. And not for minor reasons, but because the parliamentarians want to see that the rule of law in Europe is guaranteed, that the European billions do not go to governments that have a problem with corruption or do not share the liberal values ​​of the majority of Europeans seem to be. The finance package is still not on its way. These are also legacies of the fiscal political tangles from the euro crisis, for which there are no solutions so far. There is an agenda for Europe, one speaks of sovereignty and strategic autonomy, but the fundamental basis for this is a sustainable European financial order. And there it is. How should the EU react to China’s rise and thus to a changing world order? When the corona virus spread worldwide in January, we were undoed that we still thought this was a Chernobyl moment, as if it were happening miles away of us behind the iron curtain. But no, it happened in Wuhan, a city of ten million with a flight connection to the rest of the world. China is already the determining economic power in large parts of the world. And we are still lagging behind this reality. Think about climate policy: Chinese President Xi Jinping created radical new facts and promised China’s climate neutrality by 2060. This goes far beyond Europe’s promises and actions. This promise will be decisive for the world’s major emerging markets. It simply ushered in a new phase in global climate policy. This is a problem for the EU because how does it deal with it? The initiative lies with China. The EU can react. What does this mean for the relationship with China and the USA? One should not be surprised that the links with China are in some ways more important to the EU than those with the USA. Just look at the trade links. Trade with China is more forward-looking than the potential developments with America. We should acknowledge this reality. Let’s take a look at next year: How do you rate the pace of the global economic recovery? Can we be optimistic? No, there is no reason to be optimistic. The idea that we will have a V-shaped recovery in the global economy has fizzled out. The question is how slowly and how deep do we fall. What can be done in terms of distribution policy to support the losers? How do we deal with the financial consequences? The duration of the economic closings causes the damage. Europe has already gained experience with this in the past. The history of Italy, Spain and, in part, France during the euro crisis has shown that if the economy only recovers slowly, the damage will become more and more severe. From week to week we experience very different developments and shifts, we are not used to that. We know the usual ways in which recessions and financial crises develop. But what we are experiencing today is new. How can we withstand these developments and uncertainties? It depends on the development of a vaccine. That is promising, but never in history has the economic development of the whole world depended on such a technical race. We are not used to this uncertainty. That alone has serious consequences for investment expectations. After all, how do you form sustainable expectations in order to manage long-term investments? In large parts of the economy and also in the social sector, we are facing enormous new uncertainties. For you, does this crisis have a symbol that you will remember ten years from now? For us New Yorkers it is an acoustic symbol: the siren. It howled constantly between March and April. Because of the many high-rise buildings in New York, there is an extreme response when an ambulance drives through the city. This echo, the long wailing siren, could be heard non-stop back then.

About the person: Adam Tooze, born in 1967, is Professor of Contemporary History and Director of the European Institute at Columbia University in New York. After studying economics in Cambridge and at the Free University of Berlin and a doctorate in economic history at the London School of Economics, Tooze taught history in Cambridge for many years. He is the author of numerous studies on German and global economic history. His multiple award-winning publications include »The Economy of Destruction« (2006), »Deluge. The Reorganization of the World 1916-1931 “(2014) and the volume” Crashed: How Ten Years of Financial Crisis Changed the World “(2018).

On November 11th at 6 p.m. Adam Tooze will discuss with Bundestag President Dr. German politican. The Körber Foundation will broadcast the conversation in a live stream.


EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.

MIL Translation OSI