Restart of transatlantic relations with question marks

Berlin, Düsseldorf Not only Donald Trump has left the Oval Office, Andrew Jackson has also been removed from his place of honor. Trump saw in the agitator Jackson, the seventh President of the USA, a role model for his populist politics.

Joe Biden, the new man in the White House, replaced the Jackson portrait to the left of his desk with a picture of Benjamin Franklin, the scientist and constitutional father. Other places in Biden’s office are now commemorating prominent statesmen. For example with a bust of Franklin D. Roosevelt, who steered America out of the Great Depression and then through World War II.

The message that Biden wants to send is clear: He wants to rule on the basis of scientific knowledge, the time of unpredictable gut decisions is over. He wants to fight against the economic hardships of the lower classes, who are particularly hard hit by the consequences of the pandemic.

“Let’s start over,” shouted Biden at his inauguration. And the 46th President immediately took action. Seldom has a new US administration got off to such an ambitious start. Biden had hardly taken a seat in the Oval Office in a black mask and blue tie when he signed the first decrees. Biden does not wait for the new congress to agree on laws; like his predecessor, he uses the presidential power of the “Executive Orders”.

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“We have no time to lose,” he says to the reporters who jostle around him in the Oval Office. Emergency governance: Biden takes power amid an unprecedented crisis. 400,000 Americans have fallen victim to the pandemic. Ten million lost their jobs.

Change of power in the USA

President Joe Biden and Vice-President Kamala Harris were sworn in on Wednesday.

(Photo: AFP)

And the political camps, Biden’s Democrats and Trump’s Republicans, are hostile to each other. The political rift that Trump created four years ago is deeper than it has been since the Civil War: a large proportion of Republican voters still believe in the myth of the “stolen election victory”.

Resolving these crises will absorb all the energy of the new president in the coming months. “The forces that divide us,” says Biden, “are deep and genuine”. Its foreign policy will initially be derived primarily from domestic policy goals.

Telephone calls with other heads of state and government are planned for the coming days. However, Biden does not want to present any concrete foreign policy plans until February.

Nowhere does the relief at the change of power in Washington seem to be greater than in Berlin. “There is a much wider area of ​​agreement with Biden,” said Chancellor Angela Merkel on Thursday. She in particular had to endure Trump’s unrest in the past four years, the ex-president saw Germany as a competitor, not a partner.

Biden looks ahead

Now there is a new tone in Washington: “We will repair our alliances and get involved in the world again,” said Biden in his inaugural address. “Not to master yesterday’s challenges, but those of today and tomorrow.”

Angela Merkel receives Joe Biden at the Chancellery in 2013

As Barack Obama’s Vice President, the 78-year-old has already worked closely with the Chancellor.

(Photo: dpa)

From a European perspective, Biden’s presidency could not have started better. In fact, there are great hopes for a restart of the transatlantic relationship. Union parliamentary group leader Ralph Brinkhaus is now calling for “a new attempt at TTIP, ie a free trade agreement with the USA”. Brinkhaus told the Handelsblatt that we could only show strength against China if we united with the USA. “Such an agreement will determine the future prosperity of Germany and Europe,” said CDU General Secretary Paul Ziemiak.

Economists doubt whether a relaunch of TTIP is realistic for the foreseeable future. “Biden also stands for” buy american “, says Michael Hüther, director of the Institute for German Economics. And the areas of conflict are the same as when the TTIP failed.

But first the internal crisis will take center stage in the USA. Biden’s most important tool is his “American rescue plan”. With an additional $ 1.9 trillion, he wants to accelerate vaccination, alleviate the economic hardship of citizens and support businesses. Direct payments to citizens of $ 1,400 are planned again.

Adjusted for inflation, that is more than one and a half times the amount that President Barack Obama mobilized during the financial crisis. Last spring, Congress provided $ 2.3 trillion.

Biden also plans to raise the minimum wage from $ 7.25 today to $ 15. He wants to increase unemployment benefits from $ 300 to $ 400 a week and extend the benefit period until September this year. For the not too distant future, the new president is preparing an infrastructure program that will also cost a few trillion dollars.

The national debt – currently at around 130 percent of GDP – is apparently no problem for Janet Yellen, Treasury Secretary-designate. “Without further action, we risk a longer, more painful recession and later a longer-term burden on the economy,” said the 74-year-old economist at her hearing before the Senate Finance Committee. “In the long run, I believe the benefits will far outweigh the costs.”

Together with the corona aid already passed by Trump, the state stimulus injections would, according to calculations by the independent Committee for a Responsible Federal Budget, drive the US budget deficit by more than five trillion dollars. The deficit ratio had already headed towards a value of more than ten percent of gross domestic product (GDP).

Deficit spending with an impact on foreign policy

And that’s part of the truth, too: Deficit spending is motivated domestically, but it will also have an impact on foreign policy – initially positive. America is fueling global demand. Countries such as Germany, whose business model is export, could also benefit from this. But that is exactly the division of labor that the Americans no longer wanted to get involved – that applies to both Trump and Biden.

“Biden will hardly be prepared to leave the USA in its role as a consumer of last resort, which finances huge trade deficits through foreign debt,” warns Jens Südekum, economist at Heinrich Heine University in Düsseldorf.

Biden will put Europe and especially Germany under pressure to do more for global demand – for example in the military sector, but not only there. He will also generally demand more imports and the reduction of the notorious current account surplus.

Merkel is also preparing for tough debates. She represents the interests of the Federal Republic, Biden those of the United States, she said. It is clear that Germany and Europe should take on “more responsibility”.

Long-term investment program

The Corona aid is not even the largest part of Biden’s ambitious plans. With his “Green New Deal” investment program, which comprises a further 2.2 trillion dollars, he wants to use the economic reconstruction after the pandemic to transform the US economy ecologically in order to make the country climate neutral by 2050.

The reference to Franklin D. Roosevelt and his “New Deal” during the Great Depression in the 1930s is not only symbolic. Back then, too, it was not just about getting the economy going, but also about creating a better and fairer society.

This thought is part of Biden’s motto “Built back better”. He and the progressive wing of his party want to reduce social inequality in the United States. To this end, not only should minimum wages be significantly increased, more jobs created and social benefits expanded.

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Biden is also planning a tax redistribution and wants to put more of a burden on top earners with incomes of more than $ 400,000 a year. Corporate income tax for companies is also expected to rise from 21 to 28 percent.

Biden needs economic success, as quickly as possible. His political opponents are waiting for every misstep. At least since the storming of Trump supporters on the Capitol on January 6, it is clear how tense the situation in the USA is. Can 78-year-old Biden even face the daunting challenge of cementing together a torn, crisis-ridden country?

“It will remain dangerous for many years and there will be lies to fight,” said the philosopher Martha Nussbaum to the Handelsblatt. But she is cautiously optimistic: “January 6th made the Republican Party look seriously at the damage done to its own party, and that can only be good.”

The Capitol

Biden takes power amid an unprecedented crisis.

(Photo: dpa)

Nussbaum also gives hope that Biden surrounded himself with scientists “who will base their political decisions on facts, not disinformation.” Biden, says the influential philosopher in the USA, is a man of empathy and utterly not out for revenge.

And so, of all people, Biden, who has already been written off as a political fossil, could succeed in overcoming the unprecedented crisis in the USA – and restore confidence in the country’s leadership.

More: Joe Biden was underestimated – and on many levels, says Handelsblatt correspondent Annett Meiritz

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