Grün und Eisen

In last week’s note I wrote about the ‘2034’ style prospect of the next world war, ostensibly between the world’s dominant power the United States, and the rising power, China. In the back of the collective minds of those who think about such scenarios, is the rise of Prussia in the 19th century, and by extension, the rise of Germany in the early 20th century, with the resulting two world wars.

We could trace the rise of Prussia (and Germany as we know it) back to a speech in September 1862 by Otto von Bismark on the issue of German unification where he stated ‘The position of Prussia in Germany will not be determined by its liberalism but by its power … Not through speeches and majority decisions will the great questions of the day be decided—that was the great mistake of 1848 and 1849 but by iron and blood’. Bismark’s ‘blood and iron’ came to define Germany (not to forget other factors…I have Fritz Stern’s ‘Gold and Iron’ on the shelf near me).

It may well be that other countries neglect the lessons of ‘blood and iron’ and that it becomes their geopolitical mission. What I find interesting is that as a phrase it no longer defines Germany, something that is exemplified by the rise of Annalena Baerbock as the leader of Germany’s Green party, and by the rise of that party itself.

Fusty, geopolitical hawks won’t be happy with this. The Germany of the ‘well sealed windows’ to use Angela Merkel’s characterisation of her country, is one where only one sixth of the army’s tanks and helicopters are operational and the army has a major recruitment problem. Worse, most of Germany’s politicians seem to want to accommodate the actions of Vladimir Putin, offering dialogue whatever the provocation. The hawkish response is for Germany to cut off the Nord Stream II gas pipeline, invest heavily in its army and wait for the Russian tanks to come.

For better or worse, that scenario is unlikely to come to pass. While much of the international press focuses somewhat mistakenly on whether Marine Le Pen can supplant Emmanuel Macron as French President in 2022, the future of Europe lies in the hands of the successor to Angela Merkel. From afar it seems like a contest between a group of colourless, older men and Annalena Baerbock. While she enjoys a high rating in the polls, it may well transpire that Baerbock ends up leading the junior party in a coalition government. Still, her arrival on the political stage has at least three important messages.

The first is that the Green Party is moving towards the centre of the political stage in many countries. This comes at a time when banks and central banks are embracing ‘green investment’ and when many mainstream political parties are adopting the environment and the fight against climate damage as a core policy issue. Commensurately, Green parties across Europe (apart from Jill Stein and Tom Steyer the USA does not have a green party worth speaking of – though corporate America is very active here) are beginning to focus more of their attention on non-environmental centric policy issues. A good example is the recent interview that Baerbock gave to the Sunday edition of FAZ (Frankfurter Allegemeine Zeitung) where she gave a balanced centrist view on foreign policy.

Related to this is, in the context of ongoing severe climate damage across the planet, the hitherto failure of Green parties across countries and potentially across continents, to better coordinate amongst themselves. Arguably, the green or environmental cause is the only one that is universal in the sense that it is a risk all countries face, in the same way though to different extents.

To that end it is surprising that Green movements across countries are not better coordinated. This might be due to the fact that Green movements in individual countries have idiosyncratic founders, and that increasingly green policies are being adopted by centrist parties.

The second lesson from the rise of the Greens in Germany, apart from what it says about voter fatigue with incumbent political parties, is that it demonstrates the idea that values are becoming an important driver for both voters and consumers. Regular readers will know that I think that globalization is giving away to a multipolar world where large regions are defined by increasingly different ways of doing things or values.

Amongst them, Europe, led by Germany is driving a value set that prizes the green economy, protection of its citizens from the negative side effects of technology (i.e. data and AI). One of the great challenges for the first post-Merkel government is the extent to which it prosecutes this approach, notably in the way countries like Hungary are wilfully out of step on issues like the treatment of women, minorities and the respect for the rule of law.

The third factor to watch is how the deeper involvement of the Green party in German politics transforms German industry, so that for instance it makes Germany the world leader in energy cells and battery technology and vaults the German car industry into a position of dominance in electronic vehicles, not to mention its energy dependence on gas imports from Russia.

If all that can happen, in years to come we will speak of ‘Grün und Eisen’.

Have a great week ahead,


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