Buying Growth on Credit

When a political party points to a modest 1.3 percent growth forecast as proof of failure, desperation and truth are usually closely aligned. At a party convention of the Free Democrats in Thuringia, party chairman Wolfgang Kubicki delivered a harsh verdict on Berlin’s economic strategy, arguing that even this minimal expansion has been bought with the largest national debt program in the history of the Federal Republic.

Rather than executing genuine structural reforms, the federal government appears content with fiscal window dressing. Nowhere is this policy failure more acute than in the energy sector. Germany continues to import liquified natural gas across the seas while leaving its own domestic reserves untouched. Kubicki called this practice almost an economic crime, pointing out that an ideological ban on fracking and next-generation, modular nuclear power plants is actively preventing the reliable reduction of energy costs.

The regulatory state continues to stifle what remains of private initiative. Innovative founders routinely run aground on unnecessary administrative hurdles, making the systematic dismantling of red tape the immediate priority. Amid the strong election results for the AfD, economic growth remains the only genuine antidote to political extremism. Prosperity cannot be regulated into existence; it must be allowed to develop.

Whether voters will trust the FDP to enforce these liberal principles remains dubious. The party was recently ousted from the state parliament in Saxony-Anhalt after collapsing to 2.6 percent of the vote and losing its seat in government. With the federal coalition fundamentally unstable, Kubicki insisted that with the FDP, there will definitely be a force to be reckoned with again as state elections in Schleswig-Holstein and North Rhine-Westphalia approach in April 2027.

Should the coalition in Berlin break apart before then, the Liberals stand ready to enter an early campaign. Diagnosing that debt-fueled micro-growth is no substitute for market-oriented reform is easy enough. The harder task will be convincing an overburdened electorate that the party itself still holds the cure.

Written by Thomas Nussbaumer thomas.nussbaumer@alpineweekly.com