American Bases To Be Moved From Germany To Eastern Europe

Invited by a grateful United States, the Czech Republic sent in February 2003 a representative to meet with Iraqi opposition in Kurdish north Iraq. The country was one of the eight signatories on a letter, co-signed by Britain, Italy, Spain and the two other European Union central European candidate-members, Poland and Hungary, in support of US policy in the Gulf.

According to The Observer and the New York Times, American troops in Germany - and the billions of dollars in goods and services they consume locally - will be moved further east to the Czech Republic, Bulgaria, Poland and the Baltic states. This shift may have come regardless of the German "betrayal". The Pentagon has long been contemplating the futility of stationing tens of thousands of soldiers in the world's most peaceful and pacifistic country.

The letter is a slap in the face of Germany, a member of the "Axis of Peace", together with France and Belgium and the champion of EU enlargement to the east. Its own economic difficulties aside, Germany is the region's largest foreign investor and trading partner. Why the curious rebuff by its ostensible protégés?

The Czech Republic encapsulates many of the economic and political trends in the erstwhile communist swathe of Europe.

The country's economic performance still appears impressive. Figures released at the beginning of 2003 revealed a surge of 6.6 percent in industrial production, to yield an annual increase of 4.8 percent. Retail sales, though way below expectations, were still up 2.7 percent in 2002. The Czech National Bank (CNB) upgraded its gross domestic product growth forecast on Jan 30, 2003 to 2.2-3.5 percent.

But the country is in the throes of a deflationary cycle. The producer price index was down 0.8 percent in 2002. Year on year, it decreased by 0.4 percent in January 2003. Export prices are down 6.7 percent, though import prices fell by even more thus improving the country's terms of trade.

The Czech koruna is unhealthily overvalued against the euro thus jeopardizing any export-led recovery. The CNB was forced to intervene in the foreign exchange market and buy in excess of 2 billion euros in 2002 - four times the amount it did in 2001. It also cut its interest rates in January 2003 to their nadir since independence. This did little to dent the country's burgeoning current account deficit, now at over 5 percent of GDP.

Unemployment in January 2003 broke through the psychologically crucial barrier of 10 percent of the workforce. More than 540,000 bread earners (in a country of 10 million inhabitants) are out of a job. In some regions every fifth laborer is laid off. There are more than 13 - and in the worst hit parts, more than 100 - applicants per every position open.

Additionally, the country is bracing itself for another bout of floods, more devastating than 2001's and the ones in 1997. Each of the previous inundations caused in excess of $2 billion in damages. The government's budget is already strained to a breaking point with a projected deficit of 6.3 percent in 2003, stabilizing at between 4 and 6.6 percent in 2006. The situation hasn't been this dire since the toppling of communism in the Velvet Revolution of 1989.

Ironically, these bad tidings are mostly the inevitable outcomes of much delayed reforms, notably privatization. Four fifths of the country's economy is alleged to be in private hands - a rate similar to the free markets of Estonia, Slovakia and Hungary. In reality, though, the state still maintains intrusive involvement in many industrial assets. It is the reluctant unwinding of these holdings that leads to mass layoffs.

The ministry of finance correctly forecast a rise in the country's GDP from 59 percent to 70 percent of the European Union's output in 2005 - comparable to Slovenia and far above Poland with a mere 40 percent. The Czech Republic was preparing itself to join the eurozone shortly after it had become a member of the EU in May 2004.

Foreign investors are gung ho. The country is now the prime investment destination among the countries in transition. In a typical daily occurrence, bucking a global trend, Matsushita announced its intention to further expand its television factory in Plzen. Its investment of $8 million will enhance the plant's payroll by one tenth to 1900 workers. Siemens - a German multinational - is ploughing $50 million into its Czech unit. Siemens Elektromotory's 3000 employees export $130 million worth of electrical engines annually.

None of this would have been possible without Germany's vote of confidence and overwhelming economic presence in the Czech Republic. The deteriorating fortunes of the Czech economy are, indeed, intimately linked to the economic stagnation of its northern neighbor, as many an economist bemoan. But this only serves to prove that the former's recovery is dependent on the latter's resurrection.

Either way, to have so overtly and blatantly abandoned Germany in its time of need would surely prove to be a costly miscalculation. The Czechs - like other central and east European countries - mistook a transatlantic tiff for a geopolitical divorce and tried to implausibly capitalize on the yawning rift that opened between the erstwhile allies.

Yet, Germany is one of the largest trading partners of the United States. American firms sell $24 billion worth of goods annually there - compared to $600 million in Poland. Germany's economy is five to six times the aggregated output of the EU's central European new members plus Slovakia.

According to the New York Times, there are 1800 American firms on German soil, with combined sales of $583 billion and a workforce of 800,000 people. Due to its collapsing competitiveness and rigid labor laws, Germany's multinationals relocate many of their operations to central and east Europe, Asia and north and Latin America. Even with its current malaise, Germany invested in 2001 $43 billion abroad and attracted $32 billion in fresh foreign capital.

Indeed, supporting the United States was seen by the smaller countries of the EU as a neat way to counterbalance Germany's worrisome economic might and France's often self-delusional aspirations at helmsmanship. A string of unilateral dictates by the French-German duo to the rest of the EU - regarding farm subsidies and Europe's constitution, for instance - made EU veterans and newcomers alike edgy. Hence the deliberate public snub.

Still, grandstanding apart, the nations of central Europe know how ill-informed are recent claims in various American media that their region is bound to become the new European locomotive in lieu of an aging and self preoccupied Germany. The harsh truth is that there is no central European economy without Germany. And, at this stage, there is no east European economy, period.

One third of Hungary's GDP, one half of its industrial production, three quarters of industrial sales and nine tenths of its exports are generated by multinationals. Three quarters of the industrial sector is foreign-owned. One third of all foreign direct investment is German. France is the third largest investor. The situation is not much different in the Czech Republic where the overseas sales of the German-owned Skoda alone account for one tenth the country's exports.

The relationship between Germany and central Europe is mercantilistic. Germany leverages the region's cheap labor and abundant raw materials to manufacture and export its finished products. Central Europe conforms, therefore, to the definition of a colony and an economic hinterland. From a low base, growth there - driven by frenzied consumerism - is bound to outstrip the northern giant's for a long time to come. But Germans stands to benefit from such prosperity no less than the indigenous population.

Aware of this encroaching "economic imperialism", privatization deals with German firms are being voted down throughout the region. In November, the sale of a majority stake in Cesky Telecom to a consortium led by Deutsche Bank collapsed. In Poland, a plan to sell Stoen, Warsaw's power utility, to Germany's RWE was scrapped.

But these are temporary - and often reversible - setbacks. Germany and its colonies share other interests. As The Economist noted correctly recently:

"The Poles may differ with the French over security but they will be with them in the battle to preserve farm subsidies. The Czechs and Hungarians are less wary of military force than the Germans but sympathize with their approach to the EU's constitutional reform. In truth, there are no more fixed and reliable alliances in the EU. Countries will team up with each other, depending on issue and circumstances."

Thus, the partners, Germany and central Europe, scarred and embittered, will survive the one's haughty conduct and the other's backstabbing. That the countries of Europe currently react with accommodation to what, only six decades ago, would have triggered war among them, may be the greatest achievement of the Euro-Atlantic enterprise.

How can you not be wishy washy about the war on terror?

I think the battles in the WOT should be expanded. Iraq is just one front or battle. Just as the wars like Korea Vietnam and countless smaller engagements (Grenada, Latin America etc.) were part of the larger Cold War. IMO we should have bombed and gone into Saudi Arabia and Iran as well as Iraq. (North Korea should be thrown in just for kicks.)

There are many non military fronts like economic (which the NYT's is currently trying to undermine). Democrats are going full bore trying to lose the WOT on the Political front. The Courts are another front. Germany is still treating terrorists as criminals and releasing them see previous link. Germany's politics seems to mirror the Liberals of this country. Godless, Secular Humanism etc. Hopefully I am wrong. You seem to be a conservative (I assume you are German from some of your statements. You also mention the changing climate between our leaders which I think are good things. Perhaps I am wrong or being overly judgemental of Germany. But from this end it looks like Germany has left us hanging in the wind.)

Can you explain who's gonna be a terrorist and what exactly 'war' means these days ?

Sun Tzu's book is a good start to define War. The actual Battles are a small part of the total Front (chiefly political in nature). He explains it way better than I can. Bush has given plenty of definitions of how the WOT will be different from the Cold War.

"Terrorism: The Newest Face of Warfare" is a great book that talks about different levels of warfare and discusses similarities and differences between warfare and terrorism. Do you disagree that the nature of warfare has changed?

Terrorist= Anyone that wants to kill me or my children.

There are more accepted PC and un-PC definitions talking about the nature of the enemy and whether they wear uniforms or use the media. Or using brutality against an indivudal to induce vicarious fear in the target or intended population etc. You can look them up on the web. I like my definition better.

germany was often critized in a very rude and under the belt manner for it's 'passive' role

This ship went both ways.

Germany answered that it will under no circumstances deploy troops other than those who are not members of the german bundeswehr (like a large GSG9 detachment - special federal police forces build with the SAS counter terrorist units in mind and training together with these people) to Iraq.

Blah Blah, hide behind technical legalisms.

Now what's your opposition against german actions exactly ?

Wussing out on Iraq.

You are making the point that Iraq is "my" war and seperate than the WOT. I disagree. Iraq is one of the fronts on the WOT.

You must have mistaken me for somebody else. ;-)

It's very well our war. We are fighting it, too.

But I'd like to know some further details (see previous posting)

Sun Tzu is a clever citation. He also said, "No country took a benefit from fighting a war over a prolonged time"

And my guess is that we are dragged into making the world safe for chineese communism to come.

Last week it was announced that 900+ troopers of SAS and SBS are heading to afghanistan - that's a good load of highly trainend and thus very valuable personal - so this is making a significantly bigger effort.

I am pro effort - but what if chavez acts up now ? Putin is selling him weapons like russia never before did to a SA commie - and what are we (you) doing about ? I am not asking to badmouth the USA but because this never happened before - the USA I know has always reacted to such developments.

BTW Germanys goverment made a big fuzz over not going to Iraq - but we are there and where there - and you lapped it up. Stupid you ;-)

(I am no friend of the former german government)

So to be correct you got to be angry on Schröder for his Anti American BS he spread. That would make us two. But on the other hand it maybe helped certain middle east people to open their heart to the right ears.

Sorry for the mistaken identity. ;-)

You know how it is when you get going and start spouting off broad sweeping generalizations that you make up on the fly.

I am grateful for Germans who understand and support the WOT. I do have criticism for liberal Germans role in the WOT and perhaps should have made that distinction. Of course Liberals here in America are even more traitorous b/c they try to make a show of support while committing treason. At least the Past liberal government of Germany openly voiced its opposition openly instead of the doublespeak going on in America here.

Sun Tzu did advocate Political warfare first and Physical Battles as a last resort.

As for sustained warfare I don't know what level of warfare the US could sustain over the long term. In other words can we invade 1/3 of the World? Probably not but I think we could do a lot more (if there was the political will which there is not).

The billions we are spending now on the WOT are a small percentage of the GNP (a pittance) when compared to the percentage of the GNP we spent on WWII. Thus we are capable of so much more but lack the political willpower. I think many Americans have the willpower just not our leaders.

The question is - do you want to go to war ?

It seems so clear for everybody that the answer on muslim terror must be a war. But I guess that's only because we have been taught that we have to prepare to defend our values with F-22s Aircraft Carriers or Leopard Tanks.

But we are not up agaignst russia or china - we are facing a lifestyle, an ideology and in the end fear and envy about our might and wealth that was instilled and ignited in many people - and there's still a huge potential of under-privileged under-educated people that can be led to hate without a problem.

The US has to face costs of 500 billion $ following newer studies - just for iraq.

Afghanistan is a bit cheaper but will take longer. Israel is fighting lebanon and palestine - maybe sometime syria and that might involve Iran - can we remain bystanders in that conflict ?

Israel maybe will ask for help in the next monthes of time.

OK then we're going in (meanwhile we will say going in once again) - maybe we might decide to go nuclear in the end. Then our peoples support is gone (there's not much support left at the moment). Maybe Pakistan get's unstable - they got nukes, too.

Can we contain this scenario ? And if we can - will we still be able to control the situation regarding china and russia ? (least of my fears - thank god we've established
a climate of more mutual trust with these countries - but Putin is no Santa Claus)

But commies like Chaves sure may do what they want to in the near future -I hope that doesn't destabilize Brazil because they have found back to economical stability just about now - wich side is Argentine on ?

In the end - if the US and Europe ends up paying with money and blood for all these actions we might loose our political integrity - can you speak Chineese ?

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