The Fallout of the Crisis

In recent weeks and months I have addressed a number of populist and xenophobic tendencies in European politics and beyond in this blog. Unfortunately, there is no sign that these tendencies will abate. In Germany, the President was recently criticised by scores of conservative politicians for stating that Islam is part of Germany. Only a couple of days later, the head of the Bavarian Christian-Social Union, a junior-partner of the governing coalition, answered the statement by calling for an end to migration from regions with 'different cultural backgrounds' as these migrants are 'too difficult to integrate'. Chancellor Merkel did not dismiss this remark completely, instead she said that the 'multicultural' model in Germany has failed. 

I have always been of the conviction that the increase of these discussions is a reaction to the economic strains put on broad swaths of populations all over the globe due to the world economic and financial crisis. What is even more worrisome is that politicians are seemingly answering these calls by turning towards more selfish policies on a global scale. Many governments have silently given up on promised increases of development aid and are turning their attention towards national grievances at the cost of global problems that need international coordination in order to be solved. Climate change is only one of those issues. Nobody expects a binding agreement at the next Conference of the Parties of the UNFCCC in Mexico and worse, nobody even seems to care that the CoP will again be a forum for empty talks.

At the same time, this trend towards selfishness seems to translate into 'beggar thy neighbour' policies within the world currency system. The Federal Reserve Bank of the USA just announced that they will uphold their easy money policy in order to stimulate economic growth, ignoring that they are fueling tendencies of an international race for devaluation. China is not willing to change anything substantial about its undervalued currency and Japan and Brazil are stemming themselves against currency appreciations. So far, the EU has refrained from joining the devaluation race, which may be a positive side effect of the Euro. The common currency has derived individual heads of states of the instrument of manipulating the currency for economic gains.

Still, many experts are warning that devaluation may lead to trade wars in the long run which would have catastrophic consequences for everyone. Is it far fetched that selfish and xenophobic reactions in the aftermath of the world economic crisis lead to an increased readiness to rely on egoistic policies in international trade? Maybe, but the trend of people/nations focusing on their own narrow needs is distinguishable in both areas. Additionally, both the xenophobic reactions towards migration as well as the egoistic policies of devaluation have another thing in common. Both are not sustainable in the long run. Western economies will not prevail without migration and devaluation will only reap benefits, as long as other states are not reacting through devaluation of their own currencies.