There are unwritten laws that everyone who has to deal with them knows, but nobody talks about them openly because any attempt to bring them out into the open is punished by the community with eternal exclusion. The strongest community in this world is without doubt that of the financial markets.

“You don’t want to mess with the international financial markets, do you?” said a famous Green foreign minister to a famous Social Democrat federal finance minister a quarter of a century ago, and this statement has been the programme of all federal governments ever since. You can do anything, you can criticise anything, but the financial markets and the institutions that accompany them must be absolutely taboo for a German politician.

A lot has happened since the beginning of the 2000s. The “markets” and the institutions close to them in Washington D.C. have brought a lot of suffering to the world. Misguided financial markets have brought some of the largest and most important developing countries in Latin America to the brink of governability, they have massively hindered development out of poverty in Africa, they have caused democracies to totter in Eastern Europe, they have even caused a crisis in their own mother countries, which only did not lead to a political collapse of the Western world as in the 1930s because people were no longer as naive as they were a hundred years ago to leave the fight against the crisis to the ordoliberal night watchman.

It is therefore quite astonishing that the SPD, which after all has a social democratic development minister, has managed to include the point “Reforms of the international financial institutions” in a paper on the democratisation of the international order in 2024. However, if you read what is written there, disillusionment sets in after about a second:

“We support the reforms of the World Bank promoted by Federal Minister Svenja Schulze, with the aim of ensuring fairer financing offers. In particular, investments in public goods such as education, health, infrastructure, climate protection, biodiversity, the protection of forests and oceans and pandemic preparedness must characterise the work of the World Bank and regional development banks more strongly in future. We are committed to ensuring that International Monetary Fund programmes protect social participation and prevent inequality in debt crises.”

Bravo, jumped as a tiger, landed as a mouse. The “democratisation of the international order” must do without reforming what stands most in the way of democratisation (and rationalisation). Because the SPD once again only feels responsible for repairing the damage caused by the markets, it is committed to ensuring that the neoliberal and in almost all cases completely misguided programmes of the International Monetary Fund (IMF) are given a social cloak and that social participation, which exists practically nowhere, is protected.

I have just looked at a new IMF program for an African country (Nigeria) where a new government is desperately trying to get some stability and create the conditions for growth. The IMF is dictating economic policy to the government (without a real debt crisis) and, of course, has nothing in mind except restrictions in terms of monetary policy and fiscal policy. The greatest thing, however, is that this institution, which is financed and managed by us, manages to call for the floating of the exchange rate of the national currency, the naira, in such a programme in 2024 and to write the following sentence as justification:

“Ultimately—once macroeconomic policies are sufficiently tightened and confidence in the CBN (the national bank) is strengthened again—it will be important to allow the naira to settle at its market-determined equilibrium level which would support Nigeria’s competitiveness, enable productive resource reallocations, and allow everyone access to foreign exchange.”

The “markets” will find an equilibrium rate! The mockery of this can no longer be surpassed. At the same time, you can read in the Financial Times (here) that speculators are already at the ready to use an interest rate hike in Nigeria for an “investment”. This is the announcement of carry trade and carry trade is exactly the opposite of “investments” that lead to an equilibrium exchange rate.

Sorry, dear SPD, but it’s not about socially safeguarding the IMF’s programmes, it’s about preventing them. In order to prevent them, however, we need to invest much more than the SPD is prepared to do. Above all, we need people who are intellectually capable of challenging the neoliberalism prevalent in the IMF and the neoclassical equilibrium theory behind it. It is not enough to travel to Washington or the G7 meetings as finance minister or chancellor and play the good friend to the Americans. The Americans in particular never adhere to what the IMF proposes, but they are almost single-handedly using the Fund as an instrument to promote the interests of Wall Street.

The fact that Europe is lending itself to this is the real scandal and makes Europe an accomplice in the eyes of the developing countries. The petty officials from the BMF and the Bundesbank that Germany sends to Washington as “executive directors” have no choice but to vote yes to anything and everything when there is a vacuum in the European capitals, including the European institutions, when it comes to macroeconomics and financial markets.

Incidentally, in this sense it is an absurdity that all governments in Europe over the last 25 years are quite sure that the respective representative of the national central bank also has an important role to play in Washington committees and at international policy meetings. Anyone who wants to democratise the international order must first ensure at home that a technocratic institution without any democratic legitimacy such as the German Bundesbank has neither a seat nor a vote in the bodies that are decisive for the international order. Central banks, and this includes the German Bundesbank first and foremost, not only feel part of the community of the international financial system, they are usually also pioneers or defenders of a neoliberal ideology, which they tacitly promote to the people with their publications.

You see, if you really want to change something, you have to turn big wheels. Small 5-point papers are unnecessary. By the way, it’s not just the heart that beats on the left, it’s the left side of the brain that is primarily responsible for logical thinking. The only people who will probably never realise this are those who place themselves on the left side of the political spectrum.