Who will fill former Foreign Minister Annalena Baerbock’s role in the new German government? Officially, that title now belongs to Russia hawk Johann Wadephul, but what about Annalena’s unofficial role?
The former trampoline competitor might have been in over her head, but that often provided a useful window into the thinking of the government in Berlin—if not capitals across the “Collective West.” Although she’s gone, her previous statements help preview what’s to come with the new Christian Democrat (CDU)-led government in Berlin.
Back in 2023, as she made an attempt to rally anyone growing wary of the mounting costs of Project Ukraine, she said the quiet part out loud when she declared, “we are fighting a war against Russia and not against each other,” which at the time contradicted the official lie.
Maybe nowhere was her gift more evident than in September of 2022 when she exposed the sham of Western democracy. That’s when she explained the following:
But if I give the promise to the people in Ukraine, “we stand with you, as long as you need us,” then I want to deliver. No matter what my German voters think, I want to deliver to the people of Ukraine. And this is why it’s important for me to be very frank and clear. And this means, [with] every measure I’m taking, that they remain in place as long as Ukraine needs me.
And so those measures did remain—and look set to remain—even as Germans’ standard of living circles the drain. The decisions to forego pipeline Russian gas and start shifting public expenditures towards “supporting” Ukraine didn’t cause all Germany’s economic problems, but it exacerbated them.
Real GDP and real wages continue to flatline and are respectively ten and eight percent below where they should be according to pre-pandemic trends. While Germany embraced its role as a forward operating base for American empire, Barbock also had the gall to champion what she called a “feminist foreign policy” at the same time Berlin greased the meat grinder in Ukraine, backed genocide in Palestine, and cozied up to the Al Qaeda regime in Syria.
And yet she still made a habit of lecturing, threatening, and insulting other countries, most notably China, on their foreign policy, oblivious to how out of touch with reality is the idea that Germany can dictate terms. Unsurprisingly, she was not well received:
How Russian foreign minister Lavrov was welcomed in India vs German foreign minister Baerbock……
🤔 pic.twitter.com/u8mlsXvMC2— Richard (@ricwe123) March 4, 2023
More of the Same, Less Transparent
There might be new actors in Berlin now, but the movie is a remake. The new foreign minister who differs little on substance reportedly prefers to operate more behind the scenes, although he’s not showcasing that ability in the early going. He recently declared that “Russia will always remain an enemy for us” and is making statements about tribunals and criminal courts for the Russians:
On Thursday, he unexpectedly came out in support of a dramatic increase in defense spending to five percent of GDP, which is already dividing the new ruling coalition.We’ll see if five percent comes to pass, but Berlin has already agreed to exempt defense spending from Germany’s constitutional debt brake and is planning to pour hundreds of billions into armaments.
The government is accelerating weapons deliveries to Ukraine while planning to shield future deliveries from public view. According to reports, the primary goal behind the latter is to “deprive the aggressor of an advantage in the war in Ukraine.” From Defense Express:
While this reasoning may sound declarative, it is not without merit. The lack of public data on weapons shipments will likely force russian intelligence to invest far more effort into assessing the capabilities of Ukraine’s Defense Forces.
But it’s almost certainly more about keeping it removed from the public eye. After all, Merz’s popularity is already sinking:
‼️🇩🇪 Disillusionment Sets In: Majority of Germans Already Unhappy with Chancellor Merz — BILD Reports
Just four days. That’s all it took for the German public to turn sour on their new chancellor.
According to a fresh INSA poll, only 23% of Germans view Friedrich Merz’s… pic.twitter.com/rmdUW25gux
— Zlatti71 (@Zlatti_71) May 11, 2025
Despite Merz’s rocky start and the record unpopularity of the previous coalition, the mania gripping German elites shows no signs of abating. Indeed, it is growing. Consider the following from NachDenkSeiten:
The Second World War, instigated by Germany, has been over for 80 years. But on the very anniversary of the liberation from Hitler’s fascism, Armin Papperger, head of the Düsseldorf-based arms company Rheinmetall, announces magnificent business figures to the public. His celebratory news is immediately euphorically reported by the media, and the trade press of stock market journalists can’t contain itself. What’s more, Papperger is already thinking about the future and what it would be like to convert civilian production capacity into military one. For this, too, he receives applause from civil society.
And Rheinmetall continues to deepen its relationship with Ukraine. While Rheinmetall’s fortunes improve, the country’s vaunted auto industry keeps sliding into oblivion and other manufacturing suffers. German industry has come under such strain in recent years as decades of complacency came home to roost at the same time Germany energy costs became uncompetitive due to the decision to refuse cheap and reliable Russian gas, and the state is now being propelled into the past with a military keynesianism hail mary.
The Shift in Manufacturing
Despite setbacks in recent years, German manufacturing still makes up 20 percent of the country’s economic output (compared to 10.6 percent in France and 17.5 in the US).
The 800 billion euros the Merz government plans to spend will help prop up the nation’s manufacturing while shifting production to weapons—a process already underway. While demand for Das Auto might be sinking, there’s plenty for ammunition and other killing toys. Last year, auto parts giant Continental and arms company Rheinmetall signed a memorandum of understanding to retrain auto workers affected by layoffs in the shrinking auto industry. In February, Rheinmetall announced it was repurposing two factories in Berlin and Neuss that previously made car parts to produce products for war. More from Defense News:
Other defense players are getting involved, too, with sensor specialist Hensoldt reportedly in talks to hire 200 workers from auto parts suppliers Continental and Bosch, according to Reuters. And German-French joint venture KNDS recently acquired a historic rail car plant in Görlitz from French train maker Alstom. The factory will be retooled to produce components for military vehicles, including the Leopard 2 battle tank and Puma infantry fighting vehicle.
In an email to defense news, Hans Christoph Atzpodien, the head of the German defense industry lobbying group, said he expected “wholly new dimensions to the question of arms demand,” including the need for faster deliveries, not just higher volume.
The military keynesianism is unlikely to be a success or produce benefits for workers, however, as Isabella Weber and Tom Krebs point out in Foreign Affairs:
Merz’s far more generous approach to military spending will not boost domestic growth in the coming years as much as its advocates suggest. The defense sector is already operating near capacity, and in the short run, increasing government spending on weapons and tanks will have only a limited effect on production. Arms companies such as Rheinmetall have seen soaring profit margins, revealing their market power and the lack of competition they face even amid rising demand. Significant additional public spending may go into boosting their margins further. Rheinmetall’s 15-fold stock surge reflects expectations of continued windfall profits.
Of course, the government has insisted that this military spending will create well-paid manufacturing jobs. Yet Merz’s cabinet is full of business executives and lacks a strong voice for labor issues, an absence that has drawn criticism from the CDU itself. Moreover, the defense build-out will not likely compensate for the impending loss of jobs in ailing industries such as the automotive sector. Rheinmetall’s profits almost doubled between 2020 and 2024, but the number of its employees based in Germany rose just 25 percent in that period. The conversion of civilian plants to military use does not offer much more hope. In the East German town of Görlitz, a former Alstom train factory was taken over by the German-French defense company KNDS and now produces tanks, but the factory’s workforce has been slashed in half. The arrival of KNDS was clearly better than nothing, but it is unlikely to turn things around in a place such as Görlitz with a high unemployment rate of 7.7 percent. In this year’s federal election, the far-right AfD candidate Tino Chrupalla won nearly 49 percent of the vote in the town.
Indeed, Germany’s linking of weapons production and its economic livelihood are not inextricably intertwined. Since the great financial crisis, Germany capped its deficit at 0.35 percent of GDP. The new government is only carving out an exception for military spending, and to get the Social Democrats and Greens on board, minor boosts in infrastructure and climate spending. Meanwhile it’s austerity for the rest, which will produce a restless populace. The elite plan appears to be to blame the immortal enemy Russia for any social problems.
And so where do we think this is going to end up?
The new government continues to plod along the same path as the previous. Merz is threatening more sanctions, and the Europeans have found another economist to say that Russia is on the verge of collapse.
On May 14, Merz delivered his fantastical agenda to the Bundestag, including restarting the locomotive of economic growth through deregulation and striving for the strongest military in Europe, and endless support for Ukraine.
So the political movie is stuck on repeat. It is not, however, on the battlefield where Russia continues to advance.
Zeitenwende 360
The European Council for Foreign Relations declares that Merz—”the über-Atlanticist and fiscal conservative”—might be the only German politician who can credibly bury the debt brake and pave the way for a truly independent Europe. But what is that independence anymore aside from preparations to fight Russia? Or at least redirect money upwards in the name of such a goal?
If truly wanted independent Europe, they’d be making peace with Russia and finding a deal with China embracing Western edge of Eurasia. Weber and Krebs present a lot of paths Germany could be taking instead, including:
- Deficit financing of public investment spending—not just in the military and a few other sectors.
- Investments that create public ownership of critical infrastructure come at a lower cost than investments owned by private equity since public infrastructure does not have to generate profits.
- Investment in clean technology and elder- and childcare, which has a far greater economic effect than it does in defense; compared with military spending, every euro spent in nonmilitary sectors generates four times as much growth.
- Firms should receive subsidies only if they pay decent wages and maintain domestic production sites. For large companies coming from China and other countries outside the European Union, joint venture agreements that require strong labor standards can be made a requirement for market access in key sectors—much as China requires joint ventures for foreign firms to access critical areas of the Chinese market. This could help secure jobs and technology transfers where Germany has fallen behind.
- Germany should strengthen domestic demand for goods and services. High labor standards, including minimum-wage laws and broad union coverage of all sectors of the economy, are key to boosting the incomes of the majority of households. The government should raise the minimum wage from its current level of around 13 euros to 15 euros and give preferential treatment in procurement to companies that pay union-level wages.
- The government must also help keep down the price of essentials, such as housing, food, and energy, so that they do not eat up people’s purchasing power. Authorities should craft an ambitious program to address the cost-of-living crisis through effective national rent control, energy price stabilization, and strict antitrust enforcement in the food processing and grocery sectors to reduce food prices.
None of these prescriptions are under serious consideration by the German political class, however, and in most cases, Berlin is moving in the opposite direction.
Beyond the headlines like Merz telling the US to stay out of German affairs things appear to be on track between Washington and Berlin:
This dual buildup of the Russia threat and quest for “independence” from the US is intended to sell a public weary of further energy price hikes, inflation, loss of standard of living, disruptions of standard of living, and collapsing health and education systems.
As John Helmer said on Gorilla Radio at the beginning of May:
Basically, Trump is saying, you will continue the war against Russia. I will be the peacemaker. You will come along with me. We will establish that Russia is not a genuine peacemaker and deserves more war, deserves a continuation of war. The United States will continue to support the Ukraine with arms. with financing, with intelligence sharing, and will continue to act in partnership with Germany, France, and the UK on the battlefield and in the rear, in Poland, for example.
That partnership will be paid for to Trump, to US arms suppliers, to US businesses, and so on by the Europeans, so that’s underlying the arrangements is a war plan but a war plan that’s sequenced in time and uh the there have been very clear indications in Washington that trump’s advisors are following a sequencing plan reduce the US commitment in the war against Europe in order to do more in the war against China, one war at a time, but the Russia war to be paid for by the Europeans and not simply by the Europeans.
What Trump is encouraging is increased rearmament of Germany, a rearmament that’s as big as Hitler’s 1920s, 1930s rearmament of Germany. Rearmament of Germany under the new chancellor, Friedrich Merz, and the new foreign minister, Johann Wadephul, a combination of Russia haters, Russia warfighters, who intend to rearm Germany to fight Russia again. And that will be funded by Germans and the Europeans. The money will flow to the United States and Trump will support it. In that sense, I would say Trump is doing in secret the rearmament of Germany to fight Russia again.
Even for the current crop of German leaders, such levels of delusion would be reaching rarefied air. A September report from the Kiel Institute found that “given Germany’s massive disarmament in the last decades and the current procurement speed, we find that for some key weapon systems, Germany will not attain 2004 levels of armament for about 100 years.”
Onward, march.
