Optimism is a survival-supporting virtue in times of crisis or desaster.  Being asked to produce a few pages on Germany in 2003, 14 years after reunification, if you define the 9th of November 1989 as the reunification day, I desperately try to be optimistic. Desperate optimism is a phenomenon encountered in situations seemingly or really catastrophic. A boulevard newspaper just described the situation as " catastrophe cocktail  ", and an informal internet research on the topic " bankruptcy " generates a large selection of news related to Germany, the input term " formation " or " company formation " leads to news on IT companies in California, but shows nothing in relation to the present German economy.

Brokers would now smell the seducing odour of further investment opportunities.

Pessimism is a viewpoint you can afford while being situated in a wealthy, stable environment that provides at least the essential means of life.

All my life I was somewhat pessimistic. While the situation always was materially secure, and times of trouble seemingly far away, even beyond the horizon,  I could simply afford to be a bit pessimistic. Unfortunately, everything got worse than in a pessimistic mood was predicted.

In 1990, for example, I had a conversation with a posh Hamburg banker on the reunification issue. " We´ll remove the scrap, and build new factories right next to the empty space ", the slogan was. In other semi-official places the slogan sounded like: " We slamhammer the socialist conglomerates. "

Criticism related to this mode of reunification was not tolerated among the economic wizards running the place at the time and dismissed as " leftist intellectual´s psychosis ".  Today we know that the ability to calculate correctly is not in particular a skill that a politician has to have.

The removed factories did not get replaced yet, and we all are still waiting for that, while China ( a "communist ", in fact socialist state ) has been the darling of global captalism for a decade now or even two. In fact, China provides all the necessary means for a hardcore "capitalist". Human rights ( in the western sense ) are not at all taken seriously    ( although these standards have declined substantially worldwide over the past decades to a minimum in favor of a regime of total security, that, analyzed properly, does not function ). There are no trade unions. Democratic control is scarce. The press is censored. What a place ! They all rush there to get the approval for further investments. Chinese are humble people, it is said, that are not engaged in philosophies of individualistic nature. Subsequently, all the major multinationals find China their marvellous playground. Cheap labor, giant markets....environmental legislation: Poor.

So, East Germany, a newly founded democratic place, got transformed into the backyard of global capitalism. The industrial base got reduced by about 60-70 % over roughly a decade after 1989. East Germany is an agricultural playground for EU bureucrats now, and a social welfare clinic for the lost. A massive population decline is expected, as well as the ecologic revival of entire regions.

Every second workplace is located in the agricultural sector, as was the case in 1900 or even earlier. The average loss per ha in 2000 was 8,-- DM=roughly 4 US Dollars. A hectar is 100x100 meters....

This type of agriculture could survive because of massive EU subsidies. So far.

The industrial workforce consists in a large part of people located in public / state enterprises set up for the sheer purpose to get people employed. Millions found their – temporary – place there.

Due to several economic advisors of government officials, East Germany had not yet become a capitalist economy, in 2000. In fact, it isn´t. The neat new houses built by the East Germans after 1989 were mostly paid with their own money. The socialist economy suffered from a lack of efficiency rather than from a lack of capital or workforce. GDR was Nr. 10 in the GDP world hierarchy in the eighties. There was – due to centralist bureaucratic malfunctions – a lack of efficient goods supply and distribution. East Germans could easily be recognized as the ones that were always lining up themselves in a disciplined manner, opposed to their elbow-kicking West German counterparts. This behaviour was the result of decade-long education in the art of forming lines in front of shops of various kinds, except the ones for the privileged party members and their associates that were able to buy western goods with hard DM. The most valuable goods were exported. The money was there to buy something, but not really goods available. This led to a house construction boom after 1989. Apart from this, some 300 – 400 BILLION DM in  public / state subsidies were paid to renew the rotten East German infrastructure. Result: In some places it is quite modern what you face, in others it is completely rotten. Tax incentives led to another aspect of the construction boom, primarily for repair work. Neat 19th-century mansions you can now buy in East Berlin, newly reconstructed. For the period of, say  1990 – 1996 Berlin was the largest construction site in the world, although Malaysians, Indonesians deny this, and Chinese do too. Take a look at Kuala Lumpur, Djakarta or Shanghai. Berlin in comparison has the touch of an old lady that just got  another of these facelifts.

In this period East Berlin was turned upside down, and today does not really resemble the status of 1989 in any way. West Berlin got forgotten about. Parts of it do in fact look now like certain areas in East Berlin before 1989.

In 1996 this all started to come to a halt, the situation looked eerily like deflation, prices started to drop, and since 2000 the number of e.g. empty shops with  for rent  – signs have multiplied dramatically. Now there is a hard to define number of empty houses / appartments, say a few million in East Germany, and  plans existent contain the removal of a large part of that. Demolition East.

Briefly: A large part of the reconstruction efforts were financed with West German taxpayers money, another with assets of East Germans, and the minor part by so called global players. Where the new factories were built, I wonder....China got huge German-built factories now, Portugal, Spain and Brazil. The big hole in East Germany is swallowing money, money, money....

The rapidly growing private sector was – in the area of small and medium – sized   enterprises – characterized by a massive load of new enterprises, and a subsequently following wave of bankruptcies  that did not show up in any statistics. Till the late nineties the tax authorities did not really have the personnel available to conduct checks of enterprises, or verify the amount of revenues generated. An as-a-matter-of-fact tax haven, equipped with a more or less dysfunctional ( civil ) judiciary. Wild East. Today one is sort of grateful when a bill is paid....in certain sectors the cost-reduction strategy of systematically not paying at all led to several public outcries by lobbyists already.

Now you face a phenomenon called " flourishing landscapes ", Kohl had promised that in 1990. Yes, a Malaysian company does use the deserted halls of the company Cargolifter, that just got bankrupt, for setting up the largest artificial rainforest in the world. In a hall originally designed for cargo aircraft production. At  least they are expected to do so.

You want an office ? No problem. Some space for setting up a factory ? There is more than enough of it. Want a big hall to create an artificial ecosystem ? No problem.

Also, there are ecologically interesting places in various deserted regions in East Germany, and even the WOLF showed up again, after officially being rooted out in Brandenburg / Prussia roughly 150 years ago. What this       means ? The more powerful the wolf gets, the less  civilisation  persists. In earlier ages, say about 1650, wolves invaded entire villages in the East German regions, and ate all the remaining people. Most of them were killed in the war from 1618-1648 anyway. It was quite empty at this time in the region, and later the authorities encouraged French protestants, Polish and so on, to settle down there to fill the empty space with settlers again, because in certain areas there was no one left. Diseases, troops from all over Europe, plundering and burning entire regions for decades, and starvation had done their job. By about 1800 there was a somewhat full recovery, in 1900 the region was the industrially most advanced in the world, and now, well, there is almost nothing of this left – who you want to blame you can choose. I hope that the wolf will not multiply too much in the future.

You can observe birds there that have not been seen for centuries.

The amount of money that was flooded into East Germany is hard to estimate. Roughly a trillion and a half DM out of West German assets / budgets over roughly a decade, amounting to  5-7 % of the annual GDP of West Germany. With a little fantasy you can imagine what the REAL growth rates in West Germany were like in the nineties, an official average of   ~ 2 % year. You can now encounter a phenomenon called negative growth, or, even, imagined depression. A lot of companies in the east are run by West German owners anyway, so that they may contribute to the West German GDP rather than the East German ( statistics are still officially and generally split today, an interesting phenomenon you could call the victory of technocracy ).

About 2/3 of these public monies were spent on social rescue programmes. 1/3 was spent on infrastructure investments. As a car driver, still today you can somehow tell where you are by the amount of holes in streets and roads, that you are likely to encounter quite massively in East Germany, not in the West.  It is difficult to estimate how a place like Berlin would look like today without the influx of, say ( who knows ? ), 100 billion or even more DM from the federal budget and other states.

The state of Berlin faces bankruptcy now. The government demands some 30 billion EURO to be extracted from federal assets to avoid a financial meltdown. You guess what happens next: They will be told that there is no money available: Currently the size of the federal debt is on a record level, violating the EURO stability rules. The state of Brandenburg for example is able to pay its employees, by using its own tax income, but nothing more than that.

Berlin got hit quite badly. Driven by a drug-style euphoria the ruling caste expected another economic miracle to show up – but as you may have presumed already, there are no miracles, and by doing nothing excecpt to fill your own pockets you cannot create it. The West Berlin industrial sector, heavily dependent on state subsidies already, was slashed by simply cutting these off. The industrial decline was just as bad as in the eastern part, and 2/3 of all the industrial workplaces were gone in 2000, compared with 1990 – this was true reunification. Now East and West Berliners alike can study the art of lining up in welfare offices. Berlin´s economic figures went from being average in the eighties down to being the worst in Germany in the nineties, and stayed there ever since, with decent signs of recovery. It got empty and quiet, a bit shallow, slow, and static. The boom certainly is over. The hangover is there. Compare these figures with those in the years 1943-1949.....and start to wake up. The allied troops were generous enough to concentrate their bombings on the military-industrial-complex, but even this part reached its peak in 1944 and did not in particular get hit. The economic miracle after 1949 they are all so proud of, and phenomena like the complete absence of unemployment were the simple results of depopulation ( solving the unemployment problem ) plus a still existing industrial base. It was not possible to create another "miracle " like this after 1990.  This somehow got forgotten about by some who believe they own reunification and are - by definition - the creators of economic miracles.

If you are looking for an appartment – no problem at all, because there are almost several hundred thousand vacant ones in Berlin alone. You want an office ? The locator may even agree to an introductory six months without any rent to pay. In Frankfurt, you will not have a great problem getting an office to rent, but expect higher prices, and no generous incentives as the mentioned ones. The authorities, anyway, should be less hostile because of the fact that you run an enterprise. The government in Berlin consists of a social democratic left wing association, and the offspring of hyper-stalinist GDR ruling party SED, called PDS. Honecker´s heirs are in the government ( being a bit the darling of global capitalists, logically ). For their elders, several Moscow papers tolerated by the Soviet censorship authorities were an offense to public security, so they did in fact prohibit them in 1986, combatting the perestroika policies of Gorbachev. As is remembered, GDR chief Honecker got fired by his chief in 1989. That was all too much. Being the logical ally of global capitalists, this government conducts a brutal privatization policy, slashing the social budgets in a way even the IMF would have dreamed about.

A considerable part of the Berlin population went off to the surrounding countryside, as did many enterprises, simply because taxes were a bit lower in Brandenburg, labour costs more attractive in Hungary or Poland, or simply the intellectual climate less thought-police-minded in Munich or Hamburg.

About 2000 it surfaced that over a decade the Berlin state government had not just falsified account statements systematically, but also wasted billions and billions ( no one knows how much ) in a strange mixture of private-public corruption schemes that dwarfed anything encountered so far. How much money just disappeared in the privatization process on the federal level, no one wants to know. Where all the billions are now ? In Switzerland ? How many billions the former communist party sacked and relocated, no one really wanted to ask, possibly to keep them cooperative. They sort of know too much. Prominent West German politicians are now desperately trying to stop the disclosure of old GDR secret police files for historical reasons, or, plainly, personal ones. The Berlin state bank almost went bankrupt because of massive misinvestments,  while the public-private corruption conglomerate was waiting for the miracle, the total real estate boom, and some revenues being produced by real estate funds.

The boom never happened as expected.

A usable and always submissive judiciary ignored massive amounts of criminal charges. Now, the question remains where and how the federal authorities, that are sitting on top of a record debt already, do intend to take the required 30 billion EURO from, in order to, for example, pay the Berlin state employees in 2005. No answer. The debt that does violate the EU regulations already, will certainly increase, but probably in favor of the task of filling the federal budget black holes.

Now you face a deindustrialized capital, deindustrialized Brandenburg, and the great advantage of a reasonable air quality. Horrible sound these stories of the eighties, when  smog-alarms in winter were frequent, people had to stay at home, shut their windows, and watch yellowish-milky fog clouds mixed with snowflakes. Horrible, these eighties when you had to pay 10 000,-- DM or ~ 5 000,-- US Dollars to be granted the privilege to rent a        one-room-flat – after waiting a year. It was so crowded, you could get desperate. Now you need a day to find 10 or 20 suitable cheap appartments for prices equal to those in the West German provincial areas. The ( theoretical ) paradise for squatters: X hundreds of thousands of empty appartments. The squatters of the eighties were sometimes desperate to find a house empty enough to be taken over.

Where are they, the squatters ? Did the young generation get saturated ? In 1993 I had an interesting conversation with a political person active in 1990 in particular, that predicted masses of starving Russians would invade Germany. Well, masses of tourists got here, that had this habit of showing off cash-filled suitcases in fancy hotel bars, and also cash-loaded ones looking for discrete real estate investments. Also, many artists showed up that offered their services, once in a while compromising ambitious politicians and  talkshow-stars.....provided there was a need to compromise them.

Welcome in the eco-paradise ! One of the booming sectors was – and still is - tourism.   Eco-tourists flock at the baltic sea, while ships are not really being constructed there any more. A few ones here and there...

Thanks to Love parade ! It attracted so many tourists that a large number of enterprises in the hotel / restaurant sector earned as much on a single day as over the entire year.

Thanks to the cleptocracy that seized the power position after 1989, you face a marvellous investment climate today: Offices in Bombay are far more expensive than in Berlin, and in London you pay twice as much, as in other comparable places, say Tokyo. Shanghai supposedly is far more expensive.

I deeply admire Chinese food. But, excuse me, I get somewhat envious now. One of the   super-technology projects of ( West ) German origin, the Transrapid, a superfast railroad facility providing the speed of  a small  airplane, is now set up in Shanghai, not in Germany, where it was developed. A typical German success story. After a few initial tests, whatever, the Chinese were frustrated about the fact that this thing did not function properly.
This is a new-style German success story. As is known, the computer got invented here   ( Americans do not believe that ), but marketed by  the US and Japan primarily, after a strange period in the eighties when pop songs like              " Computer sind doof  " ( computers are dumb ) sold off nicely and reflected in another typical way the spirit and intellectual qualification of the German ruling caste that demonized them alleging that " computers kill     employment ". I got drastically on the nerves of an American computer engineer when I obediently repeated this phrase in 1981. The great chief in the West was someone with a reputation to be  a  " world economist ". Well.  Now the major part of the German software engineering sector is located, guess.........

............na?........

in India.

Then there was something like the " Green card initiative ". After a drastic cutback in the informatics – related facilities in the ( West ) German universities in the eighties, in 2000 the need for computer specialists was suddenly felt – after a decade of unprecendented boom worldwide. Indians were invited to get here. I think a few freezing ones should be here still, while the Greencard originally referred to the option of winning a residence permit in a US lottery. This is true politics. Nationalist elements counteracted this initiative with the slogan " Kinder statt Inder "     ( kids instead of Indians ).  It takes some 25 years to produce a computer specialist. Would you feel lost viewing these tremendously qualified statements by top economic experts ?

Anyway, Siemens, still going strong, outsourced its software engineering facilities. Siemens produces its software almost  exclusively in India today, thanks to the marvels of the German education system that drastically reduced the number of students in the eighties. Computer sind doof.

I also like Indian food, and I dislike Germany now. Is this a madhouse ? If you are looking for a place where people are keen on turning a piece of gold into a piece of garbage, you should go there. If you want to invest, and pour some billions in there, and technology, they terrorize you with – literally – hundreds of forms to be filled out, and the average entrepreneur should spent 1/4th of his working time or even 1/3rd  with paperstuff. The World Bank just rated Germany X in terms of bureaucratic malaises. Also the German education system got  X-rated. A recent study showed that the current international rank is n° 23, I think, right behind Mexico, and on top of Botswana. Germany´s tax system got in a way X-rated, too, being regarded as at the bottom level in Europe, just as the economic figures in general.

The political structure behind this all for reasons of strategic importance did not really get officially X-rated, although it deserves to get this, but still: GWB honored the chancellor and the Berlin mayor with a cup of coffee and an applecake while on his way to Moscow.  Now we are all happy that they had a half – hour conversation in the UN headquarters or somewhere. Schröder does probably enjoy being hugged by Putin twice as much.

In East Germany they promised a perfect socialist society as the result of a scientifically calculable historical process. No comment. The old party structures remaining led to the consequence that e.g. a large part of the valuable agricultural lands were taken by former party affiliates. After 1990, a handful of socialist bureaucrats admitted that the workers did not profit from this venture. In 1990 the Ossies hoped to get rid of the STASI= the      octopus-like omnipresent secret police. They wanted to get Deutschmarks West. And preserve their industries. Now: The industries are gone, Stasi is still running, on the federal level, and integrated into the FRG party system. The reality: Industry decline, Stasi still there, and FRG transformed into some GDR type of police state with a brownish touch. Excuse me please when I express some sort of anger. Murphy´s law rules. In West Germany, they promised the        " freest society  ever  on German soil ", and installed a regime that goes paranoid when you write articles. Be aware of that. Do not make political statements too outrageous to avoid trouble. As in GDR, expect a spy at every corner – at least in Berlin itself.  Do not believe you are appreciated because you invest money here, unless you are a reform-communist or representative of a multinational, or both at once.

After the first trillion that disapeared in East Germany in the nineties, you can expect another in the upcoming years. The poor West Germans are starting to grumble badly, their pockets are emptier and emptier every year, and if you project the negative growth rate of ~ 2-3 % / year over the nineties into the upcoming 10 years, you get a totally imaginary reduction  in real West German economic outputs over 20 years after reunification  that is hard to estimate, but certainly officially nonexistent, because, by definition, the wonder economy grows, and grows, and grows. This is wonderland. Whatever, after 1871 it crashed into a decade-lasting depression. In 1929 it crashed into the Third Reich that crashed itself. After 1989 something crashed, but into what ? Now, security ( guess why ) is THE priority. Security is the top priority of the insecure.

Who pays for that venture ?

This is a welfare state. The rich are supposed to support the poorer. As a matter of fact, the bureaucracy has turned this legal principle into the exact opposite in practice. A phenomenon encountered in other areas, too.

The upper class does not pay taxes, as a general rule. The legal framework, anyway, demands the opposite, say, more intensive taxation of the rich, and less intensive of the poor.

The real situation is the negative mirror image of the legal framework. It looks medieval. In 1500, the aristocracy did not have to pay taxes. The church did not. A tax of ~ 10 % was imposed on all the rest, provided they had an income, which was not the case in the countryside, where a large amount of people was regarded as objects of ownership of the landlords, treated a bit better than cattle or housewives. And, interesting: 60 % of ALL the world´s tax laws are - guess – Germany-based. They really made it. They produced the incredible amount of 60 % of the entire world tax law stock, and the bureaucracy turned the legal concept of this all into the opposite in practice. The world´s most complex tax system, turned into the opposite of the desired effect by the tax bureaucracy—a typical German phenomenon to be explained. Do not expect clear taxation rules. Tax consultants are the most needed professionals. The former president Herzog admitted that he does not understand the German tax system any more. He also served as head of the Supreme Court. His law exams were brilliant and shiny.

So the figures are: 10 % imposed on the medieval merchant, and the like, only 5 ...... after the French revolution under Wilhelm II. in the late 19th century, and an average of ~ 60 % of taxes, fees etc. today. The cleptocracy still manages to sell these figures as  progress ,  freedom  and   democracy.  In the world of dominating scientific analysis most people want to believe that fairy tale. The average German works 2/3 of the year for the state or the others, 1/3 of the year for himself. The largest part of the public budgets is the social welfare chunk.

This legal system is strange and completely over-regulated, while even law experts do not know what the law is, and a considerable part of the legal stuff produced in the lawmaking apparatus never gets enforced.  If it did, I wonder what would happen. It tends to produce surreal results you cannot imagine.

Almost feverish and maniac are the attempts of the bureaucracy to turn e.g. the first 20 articles of the German constitution into the opposite of what was intended. Give them a sniff of the power drug – they go wild. Their subordinates, the so called citizens: Having submitted to Hitler, they later submitted to the allied military command, being extremely ambitious to repeat terms like  democracy ,  freedom  ( or, as in East Germany  socialist victory  ) like a Tibetan monk as often as they could in public – just to do otherwise behind closed doors right afterwards – if ordered to do so. A Dr. Jekyll and Mr. Hyde - democracy is the result. They even ( imagine that ) prepared themselves for holocaust-like nuclear attacks against the other part of their homecountry. They would have done this, too – annihilate themselves if ordered to do so. This is not a joke, but scientifically verifiable fact.

Whatever: As an employer, you probably find reliable employees. Take it as it comes.

Now the behaviour of this bureaucracy resembles that of prison guards that lost the prison chief due to unclear circumstances. The times of limited democracy under allied military supervision before 1990 ( when a peace treaty was signed officially ending the legal war status ) seem characterized by a more generous governmental structure opposed to what we face today. A catch-as-catch-can democracy, executed by people lacking supervision. Obvious malign power addiction combined with disorientation is a disease that you can encounter quite often today.

So: Give the donkey a piece of sugar, always allude to the bureaucrats´ mental or moral superiority, do not criticize procedures too much....and get your permit. Insist that you are a citizen and have legal rights that you will enforce....oh, oh, get an extradition order....and kicked somewhere without legal basis.  If you push the donkey too hard, it will not make a single step for you. If you threaten it with " rights " you have, it may turn its back at you, and.....imagine. Something called   " motivating donation " or " benevolence fee " ( a bit of cash, that is ) will motivate the donkey anyway to walk a bit.

A peculiar phenomenon encountered today is " Ostalgia ", the marketing of GDR nostalgia rampant in these days....while I find the eighties or seventies idyllic in a way – in West Germany, that is. Anyway, it was a surface idyll.

In fact, the phenomenon existent now is a political and legal system quite different from the old FRG or GDR alike.

It has another quality, a different type of political system hard to define anyway. It does not contain the human rights advantages of pre-1989 FRG and the social security of GDR. Generally, the average income is lower than it was before 1989. Judged by the standards of the seventies a considerable part of the cleptocracy should be transferred right and downward into the slammer. But these standards are gone....saving the cleptocracy. For the moment. Today. Revolutions tend to eat its children.

Peculiarly, those most directly connected with the management of reunification are involved in legal trouble. Schabowski, who allegedly opened the wall by coincidence ( stating he got the message from above wrong ), went to jail. Kohl had some legal trouble because of illicit campaign financing and the like. Schäuble was under fire. A few others that got involved in the unification treaty fabrication got bankrupt and / or face criminal charges. Gorbachev left the Soviet government in 1991, and Bush sen. left the political stage in 1993. Nothing like this happened to those who expressed deep-hearted opposition to the reunification process, e.g. Iron Maggie Thatcher, Mitterand or even Schröder, now chancellor. Andreotti, who stated that he would like to have rather two Germanies instead of one, had some problems related to a dead journalist, but somehow managed to get out of the worst.

BREAK

( A dark image now arises....a horrible goddess with skulls used in a necklace....teeth incredible....dancing on top of dead bodies.....playing with the heads of beheaded German political leaders....Emperor Wilhelm II., extradited in 1918, after the lost WWI, Papen and Schleicher, chancellors in the  early thirties....executed by a Gestapo unit in 1934.....Hitler and his gang....suicide in 1945.....Honecker, GDR chief, fleeing to Moscow, then to Chile in 1990, where he died lonely....Krenz, chief after Honecker, got  jailed in Berlin-Hakenfelde serving a six-year-sentence and released in the meantime....Schäuble, almost shot in 1990, Bismarck, without honor fired in 1890....the likability of ending up in a mess serving the post of the chief in the post   1871-structure seems to be quite high...Schröder, who gladly left his post as SPD-chief could get another  tranquilizer....)

STOP !

Many West Berliners recall  the period before 1989 in a mood hard to be explained, and some, not so few as you might believe, claim they want the wall back. Well, if you look at the incomes of West Berliners in the eighties, you  find they were higher than today. The lunacy is understandable. Historical ignorance versus real hard economic facts...an interesting conflict.

The West Germans are starting to get nervous now. Already facing the big black hole in the east   ( many refer to this region as GDR still ) they got confronted with a phenomenon called globalization.

The bigshots always played globally, but now the sector of smaller and medium sized enterprises got driven in there. The Germany – based multinationals went shopping. Rolls Royce, for example, is a trademark owned by BMW now. The vehicles itself will be produced in Munich. A landmark event. Good for those who want to use a Rolls – it will last longer. Britons will not deny that.

Many of the familiar names and brands disappeared from Fortune 500 and the marketplace. Some corporations simply and literally went out of sight, and others merged or got swallowed. The largest 10 German law firms are Anglo-German-American lawmaking factories today. The largest private industrial corporation is called Daimler-Chrysler. Hoechst, once the largest chemical manufacturer in the world got merged into Aventis, and moved to France. Mannesmann got eaten by Vodaphone in the largest merger ever on German soil. Mannesmann´s management now faces criminal charges in relation to that, as well as the former management of German Telekom, the telephone monopolist, because of alleged fraud related to the privatization process.......Breuer, former head of Deutsche Bank, faced a court session in Munich , because of allegedly having ruined the creditworthiness of L. Kirch, media tycoon, personal friend and financier of Kohl, ex-chancellor. Kirch´s conglomerate went bankrupt afterwards.

What is a manager without a criminal record ? An entrepreneur that did never get bankrupt ? A virgin....

It should be remembered that roughly half of the mergers do not really function. The banks always are on the winner´s side. They earn billions running the merger. Then they get another big piece while splitting the merged companies again. The side effects of the nineties´ stock market boom: A big amount of mergers that supposedly do not make sense, except for the banks that managed it, awaiting secure revenues from guaranteed stock price records.

Now the question publicly arises whether Daimler should get out of the Chrysler deal again. The banks will certainly profit from that proposal if accepted.

The smaller enterprises – once one of Germany´s most valuable economic assets and the major employers – got in a way discriminated against. In the mid-nineties the private banks ceased to raise profits from the German loan market. Now there are no loans anymore for small and medium sized enterprises. The state-owned banks try to help. It should be easier to get a dosage of fresh cash, say, in London than in Frankfurt.

The tax burden is quite high ( rated X ), opposed to the multinationals´ , that do not really suffer from paying taxes, as was proudly announced by the Daimler-Chrysler management a few years ago.

A persistent itch especially for smaller enterprises without royal tax privileges like the global players do own is the high labour cost factor. This, and others, like a weird taxation system benefitting the rich and discriminating against all the rest, or massive unemployment ( the figures are somewhat like those of 1933 – 1935, and unclear because of presumably false statististics ) resulting in giant social welfare spendings ( the largest piece of the federal budget, and the local ones ), creating the desperate need to raise further money by extracting further capital from investors´and consumers´ assets, all this results in a spiral dragging them all downwards continously. Massive taxation required to finance the welfare state, leading to higher prices in the marketplace, more unemployment and bankruptcies therefore, creating the need to further raise money....the spiral is spiraling itself into somewhere for decades now.

Too high production costs combined with side-effects of enhanced competition within the European markets in particular, and the global marketplace in a minor way, lead to the simple decision to purchase products from other suppliers, be it Polish, Chinese, Spanish or whatever. The quality advantage of buying German products is officially ruled out, as a consequence of technological development in NICs, and there is no cost advantage.

Adding to the fun: The global trade infrastrucure, sped up by the internet, and other factors.

Result: A record-high of crashed firms, bankruptcies of official and less official nature, a record-high in unemployment, a record-high in state debts, a record-high in emigration, a record-high in capital transferred to nicer places like Switzerland, and so on. Deflation. Government-sponsored fun-campaigns, censorship attempts ( trying to block a new OECD report on the economic situation in Germany ), and grumbling remarks crawling out of experts in the art of voodoo economics about disturbed critics suffering from depression or bad digestion.

Due to European integration, the stagnating fatty hippopotamus drags its neighbors into the mud – the Netherlands, France, Italy....Austria.....all suffering from recession now, while it is known that the USA is not all in this situation, not to talk about Japan, China, India.....

The boom market now is e.g. insolvency-related auctions. Most of the buyers are from places like Eastern Europe, Spain and so on. A good time to get industry supplies, machinery, and all that for prices you cannot even dream of.

Another side-effect of the peculiar legal structure: A booming black market system. Tax evasion became a virtue.

In this situation, for example, a construction company based in Berlin has to pay some 15 EURO / hour for an average worker, and, roughly, some 15 / hour extra in taxes and so on. Some 40-50 different types of fees are imposed, depending on the type of business run.

The competitor: A black  company, officially nonexistent, hiring people from England ( 10 EURO, no taxes ), or Poland ( 8, no taxes ), Ukraine ( 4-5 ), offers the more or less identical good for half the price. Embarassing was the fact that even the propped – up Reichstag ( the imperial parliament building ) was reconstructed by – among      others - a lot of illegal construction workers. We all hope it will not crash someday unexpectedly  because of construction errors.

After 1990 the Berlin construction industry almost got wiped out. Masses of euphoric  beer-consuming English construction workers filled Berlin pubs, and there were Polish, Portuguese and Ukrainian colonies – that disappeared step-by-step after 1996, when the   boom  was over.

Also, the bureaucracy tends to be hostile and view enterprises as criminal.

A recent survey demonstrated that 40 % of the small and medium sized enterprises seriously consider leaving the country. Another showed that 46 % expect the situation to get better, opposed to 20 % in 2002.

20-30%, as a rough estimate, of the monies generated in Germany are not visible for the tax authorities ( in Brazil it should be 50 %, anyway, and in India too ). Maybe even the current recession can be explained by the massive re-location of activities into the black market sphere, thereby creating an official statistic that does not show the real values any more. A black company in the black market does not contribute its profits to the GDP....despite the fact that it does.

THIS, and nothing else, can explain the amounts spent in a place where the average income per head / month is something like 1250,- EUR or so.

This is not enough to finance an appartment in a big city, two kids and a housewife.

We all appreciate women´s lib, because it is necessary that they contribute to the family income.

This factor, and a population control policy of dubious nature, leads to the dull problem that Germany has the lowest birth rate in the world, and this is the case for decades already.

Now they wonder who will support the elderly in 2020. I do.....

The welfare state is too expensive, and it is probably not wise to let the population shrink, the average income stagnate or shrink,  and therefore let the welfare budgets shrink, ruin a productive part of the economy by generating weird rules in complete arrogance and defiance of the situation, and wait for another economic miracle that will never occur.

Some chemical reaction can be expected in the political sector.

Sooner or later.

What is to be expected politically ? Oh, we all know that Germany is good for surprises. The first person to suggest that Germany gets reunified was someone called J. Stalin. That was in the marvellous fifties, a period with no or almost no unemployment at all.  Now there are Stalin aficionados in the Berlin state government. A spy located at every corner.

In the seventies, when the first few hundreds of thousands got laid off after the oil crisis, or in relation to that, the ruling caste still got mad about this, and in the nineties the dark official number of ~ 4 million got  familiar. This number, which is likely to increase to 5 or 6 million,  is going to crash the social security system, and figures of 5 or 6 million will cause further economic hazard. The shrinking population will cause a crash of the entire welfare state anyway, combined with the mentioned factors.

The structural deficits are quite well known, yet, the political class is not motivated to change anything, why should they ? A  postwar system of limited and controlled democracy under military rule still existent provides guaranteed power participation for the established parties, they are well beyond the law, act like feudal landlords, believe they are invincible ( why the  hell ? ), and substantial political change is unlikely. The multinationals are in the position of getting their guaranteed revenues, while enjoying a longtime cartel regime securing their markets and monopolies, if existent.

In the nineties they all started to cry and whimper.....save Germay as an industrial nation ! Stuff called Standortsicherungsgesetz ( law to secure Germany´s position as an industrial   economy ) oozed out of the legal factory.

Now: Deutsche Bank, once the largest bank in the world by assets, is said to consider to move to Switzerland. Daimler-Chrysler – as is said – checks the option to leave for the US as its main seat. You may find it alarming that two of the major German companies claim they want to get out of here. Governmental newspeak would put it like this: They are paranoid. Or malicious. Malicious paranoia....In bankspeak it sounds like: We do intend to get rid of old-fashioned business practices. Still I wonder about the future name of the expected superbank. German World Bank.....Global German Bankers Trust. World Bankers Trust. Maybe we will be confronted with something called  Chraimler. Daimsler. Or just – revolution: MERCEDES !

40 % of the interviewed smaller entrepreneurs in a representative study think about leaving.

Now I start to get optimistic.......

The primary advantage enjoyed in Germany now is the record-breaking diversity of food supplies. You get thousands ( ? ) of different cheeses – from France alone, that is. Italy also produces a lot of cheese, adding another several thousand ( ?? ) sorts to the supplies. Wine aficionados are in heaven.

If you like to choose from several thousands ( ?? ) of beer brands – go here. You can spend the rest of your lifetime investigating the differences.

Anyway, all these products are available elsewhere in Europe, and presented in the internet, because every little vineyard has its website...or will have it in a decade. Or two.

Thanks to the introduction of the common market, it is now fairly easy to get out of here, and set up a company elsewhere. The costs of doing so are considerably lower than in Germany itself. The tax mess is encountered nowhere else. Flights became dirt cheap. Sometimes they throw tickets into the market – for free, that is. Thanks to the internet  and broadband communication, it is quite simple to be present " at home ". The relevant laws in the commercial sector are now by about 80 % EU-made, and transformed into national laws, creating a more-or-less uniform legal situation. Copyright, trademark and related laws are probably mostly identical, also thanks to a longtime regime of multinational treaties, and  EU-laws. Due to the EURO, the currency risk factor is gone. The member states are closely interlinked with more or less identical double-taxation treaties. Many of the borders simply went out of sight - border controls are now the exception in a large part of the community area, so that a
truck driver travelling from Lisbon to Berlin faces no border controls.

So, you start to eagerly wait for a chance to leave, for obvious reasons.

In Spain, there is an abundance of sunshine.

The Portuguese sea breeze is fantastic.

In Switzerland, the vine is also good, but the tax burden lower.

In Poland, cheap labour is available.

In Great Britain you can easily become a stock market wizard, opposed to Germany, where they discourage efforts like this.

In the Netherlands you face a somewhat careful police regime, while the police force in Germany feels beyond legal bindings already. The legal framework looks surreal to obscure, and this is very polite to say.

In Ireland there are nice redheads, and a miraculous tax regime.

In Germany  you are forced to stagnate – for how long ? This question remains and I do not like the answer. As a lawyer you are somehow regarded as an offense against public security, as a foreign investor as a spy or parasite,  and, like in GDR, there are curious people at virtually every corner. Stalin´s dream came true – a mass surveillance system Soviet style. A PDSSPD government in Berlin....you have to smile....Orwellian as it is they call this open society . It is open. There is a hole in the Titanic.

Shall the cleptocracy live on breathing sea air, if they want. There will not be so many taxpayers anymore. The biggest chunk of German tax revenues is extracted from the worker´s incomes and from smaller and medium sized enterprises. The latter tend to go bankrupt, or leave, and the workers to get laid off, increasingly. The record-low birthrate is taken as some kind of  divine sentence.

The solution offered by population control strategists: More immigrants. Still, it remains unclear where and how they should generate some income. Eco-farms are an option, in East Germany. Why should a Spanish immigrant go to Germany if – in Barcelona for example – he can ask a Germany-based multinational for a job ?

In this surreal scenario, one could expect that some uniformed official in 2010 will remind you of your obligation to smile in public places. This could happen in execution of the Unemployment removal and investment climate promotion laws of 2007, second amendment, version 10.

§ 1: While at work, on the way to work, or in public places, the citizen is obliged to smile in a fashion neither exaggerated or sarcastic, in order to create a favorable working or investment climate and a stable social environment.

.....§ 63 c:  It is expressly prohibited to complain while tourists are present.

§ 98 f :  The happiness-enforcement authorities defined in section 331, III, a, X of the 2nd amendment of the Internal security perfection act of 2006, may take the necessary precautions to prevent unwanted communication in public places or elsewhere.
 

The future is smiling at us. Definitely.