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Germany

Germany Says Yes To Growth, Yes To Rigor

Op-ed: Germany has been accused of being anti-growth. But Germany's Finance Minister Wolfgang Schäuble argues that growth goes hand-in-hand with the budgetary discipline that Europe's biggest economy holds so dear.

The Brandenburg Gate in Berlin (Wolfgang Staudt)
The Brandenburg Gate in Berlin (Wolfgang Staudt)
Wolfgang Schäuble*


BERLIN - There are few subjects as hotly debated today as the issue of growth, and rightly so. Employment, the key to prosperity and security for all Europeans, cannot exist without it.

As Angela Merkel and François Hollande have both reminded us separately, growth is currently insufficient across many regions of the continent. The idea of a growth initiative is therefore not only legitimate, it also responds to Germany's interests, which cannot be separated from those of the rest of the continent.

Before going into the details of what such a project would involve, we should first address a misunderstanding. By growth, I most certainly do not mean the artificial stimulation of demand by government spending. These "stimuli," financed by debt, were used in the past: I'm thinking of the time immediately following the bankruptcy of Lehman Brothers. They can be useful in the context of an acute shock, when the state coffers are well-stocked, but not when the impediments to growth are structural. Nor do they work as a long-term strategy.

Whose interests are served today by a quick fix that leads to increased deficits, which the European budget rules don't allow anyway? Nobody, in my opinion. Certainly not the investors who finance the debt of the European states, and are worried above all about their ability to pay it back. No, the growth in question should be, to borrow a phrase from the G20, durable and balanced. It should be growth that is not only strong but also on solid footing. Growth along those lines would not remotely contradict budget stabilization, which has been put off too long, but which European states have been pursuing with tenacity.

On the contrary, the two things reinforce each other. An intelligently stabilized budget creates the confidence without which consumption and investment are inconceivable. Growth, at the same, contributes to budget stabilization by reducing expenditures and stimulating revenue.

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Russia

When Mom Believes Putin: A Russian Family Torn Apart Over Ukraine Invasion

Sisters Rante and Satu Vodich fled Russia because they could no longer bear to live under Putin — but their mother believes state propaganda about the war. Her daughters are building a new life for themselves in Georgia.

A mother and her daughter on a barricade in Kyiv

Steffi Unsleber

TBILISI — On a gloomy afternoon in May, Rante Vodich gets the keys to her new home. A week earlier, the 27-year-old found this wooden shed in Tbilisi, with a corrugated iron roof and ramshackle bathroom. The shed next door houses an old bed covered in dust. Vodich refers to the place as a “studio” and pays $300 per month in rent. She says finding the studio is the best thing that’s happened to her since she came to Georgia. It is her hope for the future.

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Her younger sister Satu Vodich is around 400 kilometers further west, in the city of Batumi on Georgia’s Black Sea coast, surrounded by Russian tourists, Ukrainian flags, skyscrapers with sea views and the run-down homes of local residents.

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