It’s Only Money

Other people’s money. But still.

Money

The schwarze Null or “black zero” (meaning a balanced budget) was yesterday. A supplementary budget for 2020 at about 40 percent the size of the original one will now be approved by the German cabinet to help fight the economic woe being caused by the corona pandemic.

Germany tears up fiscal rule book to counter coronavirus pandemic – Berlin to raise €150bn in new debt to bolster ailing economy.

German Of The Day: Transaktionssteuer

That means financial transactions tax.

Tax

And that means, as usual, taxing the little guy tying to get ahead while letting the big time speculators off the hook. All in the name of Social Justice. Or Social Democracy (SPD), if you prefer.

Germany Pushes Forward on European Financial Transactions Tax – Under a new blueprint for the tax, sent by Germany Finance Minister Olaf Scholz to the other governments on Monday and seen by The Wall Street Journal, anyone buying shares in large companies domiciled in those countries and with a market value of over €1 billion ($1.1 billion) will have to pay a minimum 0.2% tax over the transaction value…

Germany is under some time pressure to deliver an agreement since the government has already earmarked the expected proceeds to pay for higher state pensions for the poor starting in 2021. It expects revenues of about €1.5 billion a year from the tax.

Germans have more words for taxation than Eskimos have for snow.

Spend More Like We Do

Says the EU. We don’t always know what we’re spending it on but we sure know how to do it.

Waste

As “German industrial orders fell more than expected in August on weaker domestic demand, adding to signs that a manufacturing slump is pushing Europe’s largest economy into recession,” the EU Commission advises Germany to spend more.

And EU knows all about spending other people’s money. It spent nearly four billion euros last year alone on things it can’t even account for – and most of the things it can account for are wasteful enough.

Konjunkturschocks“ – EU-Kommission drängt Deutschland zu mehr Ausgaben

Government Spending In Action

This time city governemnt.

A completely indebted city government that privatized the same properties for €405 million back in 2004 will now be buying them back for more than double the price. This will “keep the rents in Berlin stable.”

The horror never ends. “We’re from the government and we’re here to help.”

How Will Germany Pay?

Like, duh. The same way Germany pays for its Syrian migrants (three out of four live off the German welfare system). The captive taxpayer audience will pay. Always has, always will. Gladly, even.

Climate

How Will Germany Pay For Its €50bn Climate Plan? After months of intense negotiations between the governing parties in Berlin, Germany on Friday announced a €50 billion package of measures designed to help the country meet its 2030 emissions reduction goals.

Just so you know: Citizens in ridiculously expensive Switzerland already pay half of what the Germans pay for their energy now. And in France, the people take to the streets to protest rising energy costs (gilets jaunes). In Germany, the people take to the streets to protest the latest planned energy price increases not being high enough. German voters want this, in other words. It’s psycho here, folks. I keep telling myself “it’s only a movie, it’s only a movie…” but, sadly, I know it’s real life. As real life as German reality can get.

Strompreise steigen auf Rekordhöhe – auch Gas ist teurer.

German Of The Day: Abzocke

That means rip-off.

Abzocke

You know, like the way the German government uses any opportunity it can to rip-off taxpayers (nobody pays more taxes than Germans do)? The latest Abzocke planned is to double the air travel tax in order to fight climate change. And it will definitely not be the last Abzocke to use fighting climate change as an excuse. It’s a brilliant Masche (scam). I mean, when hasn’t the climate changed? They can keep on introducing rip-off tax tricks forever.

Germany’s ruling conservatives have proposed doubling taxes on domestic flights, as part of a wider package to cut CO2 emissions.

The decision was taken by the leadership of the Christian Democrats (CDU), who form a coalition with the Christian Social Union (CSU) and the Social Democrats (SPD).

“We will invest, together with the aviation industry, to make electric-powered flight standard for short-haul flights and to create synthetic fuel to achieve climate-neutrality on medium- and long-haul flights,”

Speaking Of Null…

Zero, that is.

Debt

Germany May Abandon Its Beloved Black Zero – Chancellor Angela Merkel is still clinging to her policy of a balanced budget, but it is becoming increasingly clear that Germany’s economic downturn could soon usher in a return to deficit spending…

For years now, a balanced federal budget, known here in Germany as the “schwarze Null,” or black zero, without any fresh borrowing, has been a permanent fixture of German fiscal policy. After four decades of chronic borrowing to finance the German national budget, the shift stood for the renunciation of the debt state and became a symbol of sound policy. But now the issue is the subject of debate again — not only due to expensive political plans, but also the threat of a recession in Germany…

“We can accomplish the tasks at hand without accruing new debt.”

German Of The Day: Milliardenloch

That means a billion-euro hole. You know, as in the ones that will be appearing in the coming German federal budgets?

Loch

The money has been rolling in to Berlin for years but it looks like those days are about to end. Germany’s current finance minister, Olaf Scholz (SPD), warns that the government will be missing some 25 billion euros by 2023. No new expenditures possible, folks. Not unless there are cuts somewhere else. Right. Good luck with that, pal. You’re with the SPD, for crying out loud (that stands for Spend other People’s Dough).

And it sure would be a shocker if Germany now used this as an excuse not to live up to its defense spending commitments, wouldn’t it? See how this works, folks?

Nach Jahren sprudelnder Steuereinnahmen droht dem Bund wegen der abflauenden Konjunktur ein 25-Milliarden-Loch im Haushalt bis 2023.

When Had We Left The Jungle?

I wasn’t aware that we had.

Jungle

WTO Faces Existential Threat in Times of Trump -U.S. President Donald Trump has set his sights squarely on the World Trade Organization in Geneva. Even its critics are worried that without the organization, the world of trade would revert to the law of the jungle.

The U.S. and other industrialized nations made several concessions to developing economies when the WTO was founded in 1995 and significantly reduced their tariffs. In return, they were able to push through stronger protections for intellectual property. They hoped that the strategy would help slow China’s rise.

But from the U.S. perspective, the system has not been beneficial. And once China joined the WTO in 2001, that dissatisfaction only grew, partly because the Chinese proved adept at taking advantage of the rules. Even today, there is significant dissent within the WTO because the economic superpower China is still classified as a “developing nation” by the organization, which gives it certain privileges. On the other hand, China is fighting for recognition as a market economy, to which both the U.S. and the European Union are opposed because it would mean they could no longer defend themselves against state-subsidized Chinese exports with anti-dumping duties.

On top of all that, the WTO is facing a more fundamental problem: its size and its sluggishness. Negotiating rounds focused on removing tariffs have become increasingly complex. And because everything is up for negotiation at the same time, every member state can paralyze the process by simply exercising its veto. The Doha Round, launched in 2001, is a perfect example: It never achieved any results and has become symbolic of the WTO’s failure.

“The problems are coming from the behavior of a single country that would like to return to the jungle.”

German Of The Day: BAMF

That stands for Bundesamt für Migration und Flüchtlinge, which means the Federal Office for Migration and Refugees. It turns out they should have translated that as the Bureau for Asylum and Migrant Fraud, however.

BAMF

This is one of those tip of the iceberg stories, folks. Employees at Bremen’s BAMF have been accused of improperly granting asylum in 1,200 cases between 2013 and 2017 and now an investigation has been launched in which 18,000 additional successful asylum applications will be reviewed. In the meantime irregularities at other BAMF offices have come to light.

Internal email correspondence at the Bremen office has emerged in which an upper-level manager appears to be aware of this systemic problem but asks that an internal investigation be carried out in a “noiseless” manner.  Nor should “everything be examined down to the last detail.”

Same old same old, isn’t it? We’re from the government and we’re here to help.

Angeschrieben wegen möglicher Unregelmäßigkeiten in den Bremer Asylverfahren, habe der zuständige Abteilungsleiter des Bundesamts im Februar 2017 zwar eine Prüfung angeordnet, zugleich aber verfügt, dass diese „geräuschlos“ geschehen solle. Er wolle nicht, heiße es in seiner E-Mail, „dass alles bis ins Detail geprüft wird.”