• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Mohan Murti

Even if Germany is facing its worst economic slouch since World War II, the country is clutching on a carnival this year to drench its sorrows — and even to cackle about the financial crisis. Millions of Germans have grabbed hold of the annual carnival as a welcome chance to disregard the relentless stream of deeply not-so-amusing news about heap layoffs, bankruptcies and corporate bailouts.

The festival, which heralds the beginning of the pre-Easter fasting period of Lent, brings much of the predominantly Catholic west and south of Germany to a standstill in the six days running up to Ash Wednesday.

As I write this column, everything has been going according to plan. Carnival kicked off on Thursday, “Old Wives’ Day,” with the traditional wild party of symbolic castration — women running around cutting off men’s ties — and gorge drinking. As you read this Monday column, Germany’s most fanatical Cologne carnival will be under way. During the carnival, much of this orderly country descends into mayhem. Middle-aged women abandon all self-control and dance on bar tables to deafening carnival beats, men dressed as Attila the Hun urinating against shop windows becomes commonplace.

The financial crisis will feature in a number of parade floats including one in which a banker with a valise full of hard cash performs a balancing act between two skyscrapers, above a safety net made of the populace.

If that sounds a little cultivated, the procession will also feature an enthralling form of a bikini-clad Chancellor Angela Merkel in a Marylin Monroe pose to rally round carnival revellers and make them forget their struggles and troubles.

The Rose Monday parade in Cologne usually attracts well over one million people and is broadcast live on TV. The city’s festival committee has given assurances that despite the economic slump, the same volume of sweets — 200 tonnes — will be thrown to the crowds as in each year.

In the meantime, more and more children are heading to Germany’s soup kitchens for a warm meal. As rising unemployment pushes more families into poverty, charities are struggling to keep up with lengthening queues.

Almost a quarter of a million children have become regular visitors to facilities throughout Germany, with their affiliated free meal centres. It is an alarming figure.

The welfare states of Europe have turned now into Farewell States. Why? There is no sense of belonging to the organisation or nous of “ownership” to the company, in the European mindset. Every relationship is contractual. Emotions have no place in the European, or German, lexis. Sacrifice for mutual benefit is unknown.

Just four months ago, German metalworkers union IG Metall had threatened a crippling wave of strikes. But after marathon talks, it accepted a pay deal. Employers agreed to give them around half of their wage hike demands of 8 per cent.

While the downhill pitch is accelerating in Germany and the rest of Europe because of the stringent insolvency laws, Germans expect legally mandated vacations four times a year. Stringent labour laws ensure protection of their ski vacations. And, there are legal safeguards from being fired.

Even if everything goes wrong in the life of a German, they fall back on welfare, which together with household and child subsidies can easily add up to a decent salary. Welfare measures that were once seen as the major achievement of western civilisation have today become a dead weight around its neck.

Europe has always had an undercurrent of protectionism, and the European Commission deserves a great deal of credit for the important successes it has notched up in the fight against it. However, against a worsening economic outlook when nations of Europe must stick to a common approach based on its values and rules, they are reverting to economic nationalism. Tension has been rising between Prague and Paris since the Czechs took over the EU’s rotating presidency from France at the beginning of the year. In the Czech Republic, the car industry accounted for some 18 per cent of Czech gross domestic product in 2007. The French President, Nicolas Sarkozy, had said: “We want to stop factories from relocating abroad and, if possible, bring them back home.”

The Swedish Government has promised Swedish automakers Saab and Volvo subsidies if they agree to shift production away from Germany and Belgium to Sweden.

Italian Prime Minister Silvio Berlusconi has hinted to Fiat that he plans to rescue the company, if need be. And, in Germany, the new Economics Minister made it clear that he plans to stimulate “jobs in Germany, not in Asia.”

And, against the rest of the world, Schengen countries including Germany are starting to build a fortress wall where even genuine business visitors are being harassed by consular clerks and also are being denied entry. It was precisely these sorts of protectionist policies that fired up the worldwide economic crisis in the 1930s.

Europe faces the prospect of losing the globalisation game, as European labour is undervalued — by the millions. Whether jobs will survive a crisis is ultimately determined by a single, remarkably straightforward question: Can invested capital be turned into more capital? No investor would be interested in looking on as his investment shrinks from one day to the next.

Surely, I can see that the financial crisis in Europe has reached the real economy, and the dilemma in the automobile industry is bringing down other sectors along with it. From the steel and chemical to the textile and electronics industries, sales are down across the board.

Will nations of Europe again face off against one another because boiling anger seeks an outlet? Or perhaps, the underprivileged will revolt? Both scenarios are possible. The only upshot tough to imagine is that zilch happens.

More Stories on : Economy | Lifestyle | Euroscape

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line