Quick Bites | Zeitenwende* and geopolitical risk perceptions
March 14th, 2023 | Article
By: Paul Zwi
In Germany, Russia’s war on Ukraine is perceived as the riskiest geopolitical crisis in 40 years. Americans are concerned, but for them, nothing compares to 9/11 in 2001.
This Macrobond chart uses measures of risk from Economic Policy Uncertainty, an academic group that measures news coverage to create indices relating to challenges ranging from infectious diseases to wars. It tracks a global geopolitical risk index against the perception of risk in nine major countries.
The “pulses,” or bubble size, reflect a deviation from the mean, that is, the greater prominence of perceptions of geopolitical risk at a given moment in time.
Germany is notable for how much its perception of risk surged following the Russian invasion of Ukraine. Europe’s biggest economy lost the primary source of energy that was key to its economic model and has had to re-think its role, particularly its tendency towards pacifism since the Second World War. Chancellor Olaf Scholz even came up with the word to describe this: “Zeitenwende”, defined as “the ending of an epoch or era and the beginning of a new time”.
Germany has promised a major military revamp as full-scale land wars return to the continent, not too far east of Germany’s borders.
Perceptions of risk are often about where you sit and your proximity to the source of danger.
*The Zeitenwende speech was an address delivered to the Bundestag, Germany’s federal parliament, by Olaf Scholz, the Chancellor of Germany, on 27 February 2022. This speech was a reaction to the 2022 Russian invasion of Ukraine on 24 February.
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