FINANCIAL BANKRUPTCY AND THE RADICALISATION OF THE MIDDLE CLASS **

Date of Report 17 November 2002
Translated 24 November 2002

BERLIN (Own report). The explosive German economic expansion, which began with the takeover of the DDR (East Germany) (and the continued German contribution to the costs of an expanding European Union) and led to twelve years of world-wide restructuring, has led the government into a severe financial crisis. The Federal government now plays down the fact that public coffers are short of some 30,000 million euros. The provincial government of Schleswig Holstein is bankrupt. German cities are now setting up emergency social services and the number of unemployed is rising further. (A realistic estimate of TRUE unemployment is some 5.5 million).

The state institutions of the Federal Republic laid out several hundred thousand million euros for the takeover of the DDR, which ended up overwhelmingly with large West German firms and capital investments. The related economic expansion into eastern Europe was (and is) subsidized in great measure. German commercial banks are still ready to extend necessary finance. In several individual states, servicing state debt takes up around quarter of the public budget.

STRUGGLE FOR WORLD MARKET

Small speculators were encouraged to spread the scope of international investments. Hundreds of thousands bought overvalued shares in the semi-state company "Deutsche Telecom" . Amongst other things, Telecom used this cash to finance the takeover of "Voice Stream" (USA). In the meantime Telecom piled up a debt mountain of around 64,000 million euros. The small shareholders have been duped by the artificial value of their shares and of their anticipated dividends. Worldwide, Deutsche Telecom is seeking to axe around 50,000 jobs whilst improving its profit margin by increasing turnover.

POTENTIAL FOR AGGRESSION

Internal social rejection, which has accompanied this crisis of expansion, is leading to a definite radicalisation of the middle classes according to German sociologists. Aggressive attitudes are catching on and underlie the sometimes offensive, sometimes militant foreign policy which Germany is following.

**See in particular Rodney Atkinson's book Europe's Full Circle Chapter 1 on the radicalisation of the German Middle Class during the Weimar Republic. See 'Publications' section of this site)