TO NEW BREXIT REALITY

20 OPINION MONDAY 16 JANUARY 2017
CITYAM.COM
FORUM
EDITED BY HARRIET GREEN
Germany is not the answer to
any serious strategic question
GIVEN the nervous
breakdown of America,
epitomised by the election
of know-nothing Donald
Trump as President, it is
altogether understandable and
human that elites are desperately
casting about for a new champion of
western stability. There are precious
few other candidates for the job so,
largely by the process of elimination,
analysts (particularly on the left)
have hit upon Chancellor Angela
Merkel’s Germany as the last, best
hope for the western order.
This would be a laughable thesis if
people were not taking it seriously.
For, in truth, Germany cannot save
either the wider world or Europe. In
fact, it is an open question as to
whether Germany can even save
itself.
In her endless intellectual confusion
over the basic fact that caution
is not the same thing as wisdom, it is
all too easy to point the finger of
blame at Merkel for this. Yet
Germany’s problems, and the weaknesses
that spring from them, are far
more systemic and deep-rooted. A
simple look at the unholy trinity of
crises facing Berlin – the endless
euro crisis, the war in Ukraine, and
the refugee crisis – makes it clear
that Germany is more supplicant
than driving force on the world
stage.
More than the others, it is the euro
crisis that provides the analytical key
to understanding overall German
weakness. The basic problem is psychological
and moral. In Europe,
what is truly going on is the end of
economic life as it has been known.
Europeans simply can no longer
THE CITY of London
Corporation hosted its
annual London Government
Dinner last week. Central to
the event was the topic of
Brexit, in which the London mayor
Sadiq Khan was vocal on how
devolution would play a critical role in
supporting Britain’s capital after
Brexit. The lord mayor’s speech
covered a different but equally
important issue; his focus was to shine
a light on the importance of
apprenticeships in London. Although
the two may at first seem to have little
common ground, there is more
similarity than one might think. Both
are a priority for government and both
have the potential to shape Britain’s
future.
Apprenticeships are a great way to
provide young people with the skills
that employers are looking for, but
there is a more significant purpose
behind them. Currently, there is a disconnect
between the skills needed to
afford the serene, cosseted, not
overly strenuous and very attractive
way of life they have grown used to;
government in European countries
has simply grown unaffordable.
Having bought into the cult of endless
leisure time as an inalienable
right, it is devilishly hard to row back
from this primary sign of decadence.
But almost no-one wants to hear this,
much less do anything about it. To
do so would require a very painful,
immediate retrenchment for millions.
That is human and understandable,
but it is also fatal. For it
means that at present democratic
politics in Europe is being conducted
based on lies.
And lying – beyond the immorality
of it – is a very poor basis for making
sustainable policy, at least in any
open society. With its wilfully ignorant
populace, Germany is the primary
example of how stubborn
self-delusion fuels member states’
approach to Europe.
In essence, to survive, the Eurozone
will either move towards a true federation,
becoming a debt union complete
with fiscal transfers (all done
on largely German terms) or the euro
will cease to exist. As such, Berlin will
be the primary paymaster for such a
new political constellation. As none
of this appeals to much of anyone in
Germany, best not to talk about it.
And so Chancellor Merkel does not.
It is at this point that even the
sleepiest German citizen will wake
up, howling. It is also here that not
levelling with one’s own people
becomes as poor a strategy as it is
immoral. By not making clear what
is really going on, Merkel has been
able to put off an awful lot of
fill important roles in financial
services and the number of people
wanting to work in the sector who
have the necessary skills.
It is important that social backgrounds
should not determine career
success, and it is in everyone’s interest
to level the playing field for the future
workforce. Meritocracy, as opposed to
aristocracy, is key. Offering paid internships,
for example, means a company
can attract young talent from all walks
of life, not just those who can afford to
work for free.
Firms across the Square Mile are
doing their utmost to appeal to young
and promising talent. For example, the
City Business Traineeship, run by brokerage
Citylink, has so far supported
1,400 state school students from some
of London’s most deprived areas into
prestigious paid internships in the City
and Canary Wharf. Last week,
Deutsche Bank – Germany’s largest
bank, which has a big presence in
London and Birmingham –
John
Hulsman
By not making clear
what is really going
on, Merkel has been
able to put off a lot of
unpleasantness
unpleasantness. But to imagine for a
moment that the German people
won’t feel fundamentally lied to once
the cheque for this Kafkaesque party
comes due, is not to be
Machiavellian. Rather, it is to be
hopelessly naïve.
Whatever Germany ultimately
decides to do, there will have to be
sacrifices. And any policy requiring
those sacrifices that is not buttressed
by public support stands no chance
of success. Lying as a way to avoid the
democratic deficit over the European
crisis is not clever.
Meanwhile, Germany, like doomed
passengers on the Titanic, has spotted
the economic iceberg dead
ahead, but has made precious little
effort to right the state’s course. The
demographic problem is especially
stark. The old age dependency ratio –
which evaluates the number of pensioners
in a society versus the working
age population – simply cannot
be wished away. The German ratio
was 34 per cent in 2013, rising to an
economically crippling 52 per cent
by 2030. Over this period of time, the
number of pensioners in Germany
will skyrocket by 5m, even as the
number of workers declines by 6m.
Who is going to pay for those endless
vacations and for the overly generous
social safety net?
The inconvenient truth about
Germany is that it is strategically
pacifist (with laughable defence
capabilities for a serious power),
politically ostrich-like in its stubborn
refusal to even attempt to master
Europe’s many policy crises, and –
worst of all – economically very
much living on borrowed time.
For all these reasons, Germany is
simply not the answer to any serious
strategic question there is.
£ Dr John C Hulsman is senior
columnist at City AM, a life member of
the Council on Foreign Relations, and
president of John C. Hulsman
Enterprises. He can be reached for
corporate speaking and private
briefings at chartwellspeakers.com
Brexit and beginners: Why the City must
step up and support the next generation
Mark
Boleat
announced it would use social media
channels to entice those who might
not have traditionally applied for a
bank job, but that would be well-suited
to the role. Such measures are a must
for financial and professional services
firms: with the exponential rise of digital
and tech, talented youngsters now
have an abundance of job opportunities
in other lines of work.
The City of London Corporation also
recently launched a report on youth
unemployment – a subject which
remains a real challenge in London.
The City’s Business is a guide which
highlights the vital role that City institutions
play in reducing youth unemployment
in London.
While many schools and businesses
are indeed addressing these challenges,
more work must be done to
raise awareness of skilled jobs and
how young people can secure them.
Pupils also need more frequent exposure
to the workplace so they understand
the practical and “real life”
application of their studies. For business
engagement to be meaningful, it
needs to start early, so young people
are aware of future opportunities and
the skills they will need to succeed.
This means not just focusing on academic
achievement, but working with
schools and colleges through mentoring,
careers fairs or workplace taster
sessions to help young people develop
the relevant skills that will give them a
head start.
£ Mark Boleat is chairman of the policy
and resources committee of the City of
London.
DEBATE
Q: As the great
and the good
descend on
Davos, are we
seeing the death
or the dawn of the
global elite?
Alex
Deane
DEATH
It is all too easy to bash the so-called
“global elite” and mock their gatherings.
Those seeking to do good at Davos are at
least trying; if there are real villains, then
they’re to be found among those who
never engage in such things as they feel no
wider responsibility to their fellow man.
But, whether Davosians or not, the
hegemony of the global elite is slipping.
Technology is enabling greater
decentralisation, and facilitating social
conversations that are lateral rather than
top down – and this will only grow as time
passes. Want proof of this trend? If it had
been up to the “elite”, we’d have voted to
stay in the European Union; Donald Trump
wouldn’t be heading for the White House.
In the past, without disseminatory routes
like the internet helping an anti-elite
person to find like minds, those
disagreeing with what they were told
would have found it far harder to
cooperate and collaborate. We are more
likely to say “no” when we think that we
are not alone.
£ Alex Deane is managing director of FTI
Consulting and common councilman in the
City of London.
Dan
Tara
DAWN
This is a dawn of a new type of global elite.
Social networks and enterprise technology
companies now have a place at the table
alongside policymakers and central
bankers. The question is, what does this
addition to the elite mean for the world? For
starters, it’s an indicator that technology is
now not just a “sector”. Rather, it is
beginning to become a facet of life which
underpins everything humans now do, in
the same way money or law does. Given
that the leading minds and thinkers
featured are largely in some way tied to
commercial entities, it will be interesting to
see how they apply this position of
influence. In addition, people like this tend
to be innately wedded to the idea of
speeding up the pace of change in a way
that the traditional global elite might not
have. Mark Zuckerberg is a good example
of the tech elite transcending perceived
roles to shape everything from politics to
quality of life. How this agenda shapes the
pace of the world, and the impact it has on
society, will be fascinating to watch.
£ Dan Tara is executive vice-president of
Positive Technologies.