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Analysis
Germany’s trials over migrants and money

Germany’s trials over migrants and money

As with capital, Berlin had to stop the flows

by David Marsh

Mon 14 Sep 2015

Once again, volatile flows from around Europe are converging on Germany. In the last few weeks, it is people; in previous months, it has been capital. In both cases, whether for streams of refugees fleeing war and persecution in their native territories, or for footloose funds seeking a safe haven amid financial market turmoil, Europe’s largest and most successful economy is exerting a magnetic attraction.

And, in both cases, the music had to stop.

The ‘temporary’ halt to free passage of people across the Austro-German border announced on Sunday evening was designed for a similar purpose to the capital controls decided this summer in Greece and the audaciously unrealisable €86bn loan-and-reform package agreed with the former Greek government last month. Both are stopgaps designed to halt movements that had threatened to become both uncontrollable and a threat to stability across the continent.

There are strong parallels to the last great migration influx into the Federal Republic, before and after the fall of the Berlin wall in November 1989, crossing into then West Germany from the old Communist-run East. That was inflammable geopolitical tinder that had to be dampened down. This time, the movements are larger and – at least from a sociological and economic point of view – confront now-unified Germany with a bigger challenge.

Roughly 1,200 East German citizens a day were streaming westwards at the end of 1989 and early 1990. In an improvised shift in February 1990, Chancellor Helmut Kohl had to offer to take the D-mark into East Germany to persuade the people to stay. This past weekend, the Berlin government reckons that 40,000 refugees entered Germany. Alone in the Bavarian capital of Munich, an estimated 20,000 distressed migrants escaping conflict in Asia, the Middle East and Africa were seeking succour – plainly too much for the city and the surrounding areas to bear.

There has been a heartening welling-up of sympathy for the new arrivals. Yet 15% of the 800,000 asylum-seekers expected in Germany this year are estimated to be illiterate. Very few speak German. They may well be young, virtuous, industrious and intelligent. Yet converting them into the skilled, technically adept workforce Germany needs for the rest of the 21st century will be a tall order.  

East Germans travelled to the West in 1989–90 knowing that they had a cast-iron legal right to citizenship in what was constitutionally programmed to become a unified state. Today’s refugees are on much more shaky ground. They base their migration route on a combination of Chancellor Angela Merkel’s ‘open doors’ policy (framed with due regard to Germany’s awful record in 1933–45, but without much thought for self-fuelling repercussions) and the policies of either polite or aggressive refugee-rebuttal in force in many other EU states.

Merkel’s declaration that Germany would open its borders to refugees may have been historically legitimate. Yet it was about as well-considered as her hasty statement (together with Peer Steinbrück, the then finance minister) on 5 October 2008, soon after the Lehman Brothers collapse, that all German bank accounts were safe – one of many generators of pan-European capital flight that has accompanied the past seven years of European turbulence.

Germany now is, in some ways, in a similar position to Jeremy Corbyn, the veteran pacifist Eurosceptic Labour former backbencher who took over at the weekend as leader of the UK opposition party with no predilection for taking difficult decisions in his previous 32 years in the House of Commons. Corbyn, like Germany, finds himself suddenly in a position of responsibility with the unenviable task of marrying firmly held principles with European and international realities. There is one key difference. However it ends its trials over migrants and money, Germany will still be a success story. The same may not be true of Corbyn and the Labour party.

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