Economy

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.

In fact, growth is already at the center of the efforts that the euro zone countries have taken to combat the debt crisis over the course of the past two years.

Domestic demand

The countries that are currently receiving assistance from the European Stability Fund are in the process of implementing adjustment programs that are meant to improve competitiveness so that their economies can grow in the long term.

My country has fully contributed to the European efforts for growth. As the International Monetary Fund explains in its most recent report on Germany, published last week, the German economy is increasingly supported by domestic demand.

The numbers prove it: Our first trimester imports from the rest of the European Union were up 5% compared with last year. Our exports increased at just half that rate.

One of the lessons of the crisis is that members of the Monetary Union must work unceasingly to integrate their national economies. But they must also work to maintain and improve their competitiveness vis-à-vis the rest of the world.

Spain, which had long been buoyed by a real estate boom, saw its revenue crash after the housing bubble burst. But in a recent meeting in Santiago de Compostela, I was able to see how much my Spanish colleagues have learned.

The courageous reforms made by both the current Spanish government, led by Mariano Rajoy, and its predecessor, have already brought improvements: exports have picked up and the country has once again become more competitive.

In Italy, Mario Monti's government has opened up several markets that had been closed off and has taken steps to increase the effectiveness of public services. The Monti government is now working on an ambitious project to reform the labor market.

But the joint effort is not the sum of the national measures. Through various engagements, including the budget pact and the "Euro Plus' pact, the majority of the European Union members have committed not only to coordinate their economic policies but also to improve their competitiveness, encourage job growth and reinforce the banking industry.

Together, the members of the European family can do more. The themes at the European Council in March were sustainable growth, job creation and competitiveness. Those same themes are all still relevant for the two upcoming meetings of our heads of State, set to take place later this month, and at the European Summit in June.

One of the central questions will be whether we are currently doing enough for growth, and whether or not we could do more. It goes without saying that Germany will participate openly and constructively in the conversation.

We are ready, for example, to talk about the ability of the European Investment Bank to promote growth. Financing small and medium-sized business should also be discussed at the national and European level. Also we ought to address the issues of bureaucracy and the role of the State in the economy, which can be a growth inhibitor as well.

Additionally, we have to work on the structural funds. Can we target them more effectively? Many decisions have been made in an attempt to maximize the funds, but there is still work to be done. For example, why not use the funds to support professional development? The same questions apply to the E.U. budget in general. In other words, can we imagine a major change in the way Europe works for its members' economies?

This debate about growth is essential. And contrary to what some would argue, it does not contradict efforts to square up public finances in Europe and in the Euro Zone. Initiatives for growth and for the budgetary pact are complementary. They are pillars of a more robust, stable and durable monetary union.

*Schäuble is Germany's Finance Minister

Read the original article in French.

Photo - Wolfgang Staudt

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Society

The Food Truck, A Sign That The White And Wealthy Are Moving In

In San Diego, California, a researcher tracked how in the city's low-income neighborhoods that have traditionally lacked dining options, when interesting eateries arrive the gentrification of white, affluent and college-educated people has begun.

Balboa Park Spring Fling Food Truck festival

San Diego Food Trucks via Facebook
Pascale Joassart-Marcelli

SAN DIEGO — Everybody, it seems, welcomes the arrival of new restaurants, cafés, food trucks and farmers markets.

What could be the downside of fresh veggies, homemade empanadas and a pop-up restaurant specializing in banh mis?

But when they appear in unexpected places – think inner-city areas populated by immigrants – they're often the first salvo in a broader effort to rebrand and remake the community. As a result, these neighborhoods can quickly become unaffordable and unrecognizable to longtime residents.

An appetite for gentrification

I live in San Diego, where I teach courses on urban and food geographies and conduct research on the relationship between food and ethnicity in urban contexts.

In recent years, I started to notice a pattern playing out in the city's low-income neighborhoods that have traditionally lacked food options. More ethnic restaurants, street vendors, community gardens and farmers markets were cropping up. These, in turn, spurred growing numbers of white, affluent and college-educated people to venture into areas they had long avoided.

This observation inspired me to write a book, titled The $16 Taco, about how food – including what's seen as "ethnic," "authentic" or "alternative" – often serves as a spearhead for gentrification.

Take City Heights, a large multi-ethnic San Diego neighborhood where successive waves of refugees from places as far away as Vietnam and Somalia have resettled. In 2016, a dusty vacant lot on the busiest boulevard was converted into an outdoor international marketplace called Fair@44. There, food vendors gather in semi-permanent stalls to sell pupusas, lechon (roasted pig), single-sourced cold-brewed coffee, cupcakes and tamarind raspado (crushed ice) to neighborhood residents, along with tourists and visitors from other parts of the city.

Informal street vendors are casualties.

A public-private partnership called the City Heights Community Development Corporation, together with several nonprofits, launched the initiative to increase "access to healthy and culturally appropriate food" and serve as "a business incubator for local micro-entrepreneurs," including immigrants and refugees who live in the neighborhood.

On paper, this all sounds great.

But just a few blocks outside the gates, informal street vendors – who have long sold goods such as fruit, tamales and ice cream to residents who can't easily access supermarkets – now face heightened harassment. They've become causalities in a citywide crackdown on sidewalk vending spurred by complaints from business owners and residents in more affluent areas.

This isn't just happening in San Diego. The same tensions have been playing out in rapidly gentrifying areas like Los Angeles' Boyle Heights neighborhood, Chicago's Pilsen neighborhood, New York's Queens borough and East Austin, Texas.

In all of these places, because "ethnic," "authentic" and "exotic" foods are seen as cultural assets, they've become magnets for development.

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

A call for food justice

Cities and neighborhoods have long sought to attract educated and affluent residents – people whom sociologist Richard Florida dubbed "the creative class." The thinking goes that these newcomers will spend their dollars and presumably contribute to economic growth and job creation.

Food, it seems, has become the perfect lure.

It's uncontroversial and has broad appeal. It taps into the American Dream and appeals to the multicultural values of many educated, wealthy foodies. Small food businesses, with their relatively low cost of entry, have been a cornerstone of ethnic entrepreneurship in American cities. And initiatives like farmers markets and street fairs don't require much in the way of public investment; instead, they rely on entrepreneurs and community-based organizations to do the heavy lifting.

In City Heights, the Community Development Corporation hosted its first annual City Heights Street Food Festival in 2019 to "get people together around table and food stalls to celebrate another year of community building." Other recent events have included African Restaurant Week, Dia de Los Muertos, New Year Lunar Festival, Soul Food Fest and Brazilian Carnival, all of which rely on food and drink to attract visitors and support local businesses.

Meanwhile, initiatives such as the New Roots Community Farm and the City Heights Farmers' Market have been launched by nonprofits with philanthropic support in the name of "food justice," with the goal of reducing racial disparities in access to healthy food and empowering residents – projects that are particularly appealing to highly educated people who value diversity and democracy.

Upending an existing foodscape

In media coverage of changing foodscapes in low-income neighborhoods like City Heights, you'll rarely find any complaints.

San Diego Magazine's neighborhood guide for City Heights, for example, emphasizes its "claim to authentic international eats, along with live music venues, craft beer, coffee, and outdoor fun." It recommends several ethnic restaurants and warns readers not to be fooled by appearances.

Longtime residents find themselves forced to compete against the "urban food machine"

But that doesn't mean objections don't exist.

Many longtime residents and small-business owners – mostly people of color and immigrants – have, for decades, lived, worked and struggled to feed their families in these neighborhoods. To do so, they've run convenience stores, opened ethnic restaurants, sold food in parks and alleys and created spaces to grow their own food.

All represent strategies to meet community needs in a place mostly ignored by mainstream retailers.

So what happens when new competitors come to town?

Food vendor at outdoor international marketplace called Fair@44.

Fairat44 via Instagram

Starting at a disadvantage

As I document in my book, these ethnic food businesses, because of a lack of financial and technical support, often struggle to compete with new enterprises that feature fresh façades, celebrity chefs, flashy marketing, bogus claims of authenticity and disproportionate media attention. Furthermore, following the arrival of more-affluent residents, existing ones find it increasingly difficult to stay.

My analysis of real estate ads for properties listed in City Heights and other gentrifying San Diego neighborhoods found that access to restaurants, cafés, farmers markets and outdoor dining is a common selling point. The listings I studied from 2019 often enticed potential buyers with lines like "shop at the local farmers' market," "join food truck festivals" and "participate in community food drives!"

San Diego Magazine's home buyer guide for the same year identified City Heights as an "up-and-coming neighborhood," attributing its appeal to its diverse population and eclectic "culinary landscape," including several restaurants and Fair@44.

When I see that City Heights' home prices rose 58% over the past three years, I'm not surprised.

Going up against the urban food machine

Longtime residents find themselves forced to compete against what I call the "urban food machine," a play on sociologist Harvey Molotch's "urban growth machine" – a term he coined more than 50 years ago to explain how cities were being shaped by a loose coalition of powerful elites who sought to profit off urban growth.

I argue that investors and developers use food as a tool for achieving the same ends.

When their work is done, what's left is a rather insipid and tasteless neighborhood, where foodscapes become more of a marketable mishmash of cultures than an ethnic enclave that's evolved organically to meet the needs of residents. The distinctions of time and place start to blur: An "ethnic food district" in San Diego looks no different than one in Chicago or Austin.

Meanwhile, the routines and rhythms of everyday life have changed so much that longtime residents no longer feel like they belong. Their stories and culture reduced to a selling point, they're forced to either recede to the shadows or leave altogether.

It's hard to see how that's a form of inclusion or empowerment.The Conversation

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Pascale Joassart-Marcelli is a Professor of Geography and Director, Urban Studies and Food Studies Programs at San Diego State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.


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