Between the turn of the times and double whammy

"People remain in a permanent state of waiting, which paralyzes the country"

Tank debates, worries about prosperity and bashful consumption: around a year after the start of the war, Germany is torn, says rheingold boss Stephan Grünewald. The psychologist explains what makes the nation tick.

The interview appeared in WirtschaftsWoche on January 25, 2023.

Mr. Grünewald, you and your team from the rheingold Institute conduct around 5,000 in-depth interviews a year on current issues from the market, media and society, and are regarded as the nation's psychologist, so to speak. How is the patient Germany doing, lying on your couch after a year of war and the turn of the century?

Germany is in a strange state between turn of the century and double whammy. Although Olaf Scholz proclaimed the turn of the times on February 27, 2022, it has not yet reached the people psychologically. So the patient Germany is not doing very well.

What specifically is the patient missing?

The turn of time means that something is being lost, that something old is no longer coming back - a natural process that is associated with saying goodbye and mourning. At the same time, however, Zeitwende also stands for a new beginning, for something new that is linked to a vision. But it is precisely this vision that has been completely missing so far, and it has not been explained by the chancellor either. He has proclaimed the turn of the times, but so far has not filled it with life. This is fatal, because it keeps people in a permanent state of waiting that paralyzes the country.

At least there have been attempts at financial therapy: the double whammy, three relief packages worth billions, cushioning the high energy prices. Isn't that enough?

Germany has experienced great ups and downs of emotions in the past year. The start of the war on February 24 was an absolute shock; there were great fears that World War III would break out, that there would be a nuclear strike. For many people, this massiveness was almost unbearable. From May on, the war was then increasingly suppressed, the first rescue packages were launched, the summer was an attempt to put the problems on pause and to resume the pre-Corona spontaneity and joie de vivre.

And then came the autumn.

Starting in the fall, concerns about energy supplies and blackouts became dominant. Things became more expensive, heating colder, the domestic idyll increasingly uncomfortable - since then, the country has been in a lethargic resignation mode, starting the new year with little confidence.

In Ukraine, there are no ups and downs for the people, but their lives are determined by war. While people are dying there, Germany has been discussing tank deliveries for months and is experiencing a chancellor who dithers and hesitates, even though it was he who proclaimed the turning point. Is the patient Germany not threatened by schizophrenia?

The nation is indeed torn. However, there is one major difference from the Corona crisis: We are not seeing the abysmal polarization that occurred in response to the pandemic measures - but rather a fundamental "yes" to the arms deliveries, which is then followed by a "but" of varying degrees.

This is not surprising, given that the chancellor repeatedly warned against going it alone before finally agreeing to the Leopard delivery. 

In the coalition, we are seeing a division of roles: Olaf Scholz represents German thoughtfulness, Economics Minister Robert Habeck takes people with him and wants to explain at eye level, and Foreign Minister Annalena Baerbock stands for the clear, decisive position. Without an overarching vision, the result is a muddle that unsettles many people.

It is not only unclear communication that is fueling the concerns of people in Germany, but also economic development. Although the annual economic report even forecasts slight growth for 2023, studies such as those from IW Cologne warn of a "huge loss of prosperity". If 50 percent of the economy is psychology, as Ludwig Erhard once said - what does that mean for Germany as a patient?

The patient Germany needs more than just a warm blanket right now. We are experiencing a nation marked by a creeping process of erosion. Inflation, which can be felt in many areas of daily life. Plus the shortages, from building materials to medicines. And all the lifelines that a country needs are pulsating ever more weakly: roads, railroads, digitization - Germany is lagging behind its future viability.

The diagnosis does not sound very optimistic. 

Wait, it's not that bad - and that's down to the individual companies, which are proving to be more forward-looking, nimble, pragmatic and thus more crisis-resistant than the politicians themselves.

But what about consumers? Do they hold back in times of crisis for psychological reasons alone?

People continue to buy and enjoy, but more than before they are looking for permission or justification to do so. After all, saving is considered a general virtue right now - and that's why many people tend to buy and consume on the sly and coyly, because they feel embarrassed in the crisis.

However, anyone who wants to emerge from a crisis needs strength. How big are the reserves? 

Germany has enough reserves of strength, but they would have to be mobilized - for this, leadership is needed, someone who motivates the patient and sets the goal. Unfortunately, too little is happening politically.

So Scholz must now follow up his proclamation of a new era with a new beginning?

Yes, in order to get the country out of its intermediate state and into the new era, Scholz should have a visionary master plan and, above all, explain it: What are the most important projects? What are the steps to get there? What is the goal? But unfortunately there is no such master plan; instead, we recycle the spirit of awakening, help ourselves to the 60s, 70s, 80s or 200s, where we personally experienced awakening in the past - no real awakening can emerge from such a makeshift surrogate.   

However, Scholz has not yet been known as a great orator of jerks, apart from the turn-of-the-century speech.

But that's precisely what Scholz sees as an opportunity. Because if a loudspeaker only ever turns up the volume, then at some point no one listens anymore - or at worst even covers their ears. But someone like Scholz, who has a calm basic tone and then deviates from it, has a completely different penetrating power. The turn-of-the-century speech is the best proof of this. Now, however, he must follow it up with tangible action that goes beyond financial relief and new special funds. 

And what is the prognosis for the patient Germany if this does not happen?

There is a great danger that resignation will increase. Psychologically, people are increasingly settling into a downshift. They are losing faith in the mean. Even in the Corona era, the rifts in families and circles of friends have deepened; discussions of current issues, which used to be a unifying element, are being left out. The fear that the country is becoming more and more divided is great. This makes it all the more important to offer orientation and provide a common direction - then the patient will also stabilize again.

The interview was conducted by Sonja Álvarez.