German Economy – WBTS Forum http://wbts-forum.org/ Mon, 03 Jan 2022 18:01:08 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://wbts-forum.org/wp-content/uploads/2021/04/default1.png German Economy – WBTS Forum http://wbts-forum.org/ 32 32 Deployment of German frigate Bayern in Indo-Pacific shows muddled Chinese policy https://wbts-forum.org/deployment-of-german-frigate-bayern-in-indo-pacific-shows-muddled-chinese-policy/ Mon, 03 Jan 2022 18:01:08 +0000 https://wbts-forum.org/deployment-of-german-frigate-bayern-in-indo-pacific-shows-muddled-chinese-policy/

European navies are once again making waves east of Suez with a series of high-level naval diplomacy missions. France deployed its only carrier strike group to the Indo-Pacific region in 2019, followed by the UK carrier strike group and an accompanying Dutch frigate in 2021.

And now, in the wake of these high-profile deployments, a single German frigate is circling Asia. With the ship now halfway through its mission, Berlin has created more questions than it answered with its first foray into the region in two decades.

The deployment by the German Navy of Brandenburg-class frigate Bayern, announced in January 2021 and sent in August, highlights Europe’s dilemma in the Indo-Pacific. Despite its public commitments to concepts such as human rights, democracy and equality, Germany (like many others in Europe) is deeply dependent on China, a power that believes in no of them, for continued economic growth.

European navies are once again making waves east of Suez with a series of high-level naval diplomacy missions. France deployed its only carrier strike group to the Indo-Pacific region in 2019, followed by the UK carrier strike group and an accompanying Dutch frigate in 2021.

And now, in the wake of these high-profile deployments, a single German frigate is circling Asia. With the ship now halfway through its mission, Berlin has created more questions than it answered with its first foray into the region in two decades.

The deployment by the German Navy of Brandenburg-class frigate Bayern, announced in January 2021 and sent in August, highlights Europe’s dilemma in the Indo-Pacific. Despite its public commitments to concepts such as human rights, democracy and equality, Germany (like many others in Europe) is deeply dependent on China, a power that believes in no of them, for continued economic growth.

While the European Union and China traded sanctions in a rare escalation of tensions last year, EU members are taking great care to avoid being drawn by Washington into a direct confrontation with Beijing. But European capitals fail to agree on a unified approach. Despite Brussels’ designation of Beijing as a “systemic rival”, internal pressures continue to blunt any effort to present a united European response, which extends into maritime missions led by European states. And, with few exceptions, decades of European underinvestment in maritime forces make their presence away from home symbolic at best, with Germany among the hardest hit.

Germany’s naval deployment is separate from those of France and the United Kingdom in part because Germany has no territorial possessions in the Indo-Pacific, and it has not since lost its positions. in China and the South Pacific after WWI. Considering the German Navy’s long absence from the region and relatively small size, it is not necessarily surprising that Germany wants to test the terrain with a limited deployment. But what he was doing there was not exactly clear.

Even at the planning stage, the Bayern deployment drew fire for the unclear objectives of his solo mission. At one point, Thomas Silberhorn, Parliamentary State Secretary at the Defense Ministry, said Berlin wanted to “deepen our ties with our partners on the Democratic side”, while at the same time specifying that the deployment was “not aimed at anyone. “. “

Berlin was apparently so keen to avoid anger in Beijing that it requested a tour of the port of Shanghai as part of the ship’s itinerary. In August 2021, Beijing rejected the request, and then German Defense Minister Annegret Kramp-Karrenbauer publicly stated that “for our partners in the Indo-Pacific, it is a reality that highways shipping lines are no longer open and secure. , and that land claims are enforced by the law of “power is good.” “

However, the BayernThe deployment of the consciously avoided transit through contested sea routes, and its chosen direction of travel ensured that it would not even have the opportunity to cross paths with Allied ships in the region at the same time. Yet sometimes Berlin and its representatives in the Indo-Pacific are on the verge of dropping the fig leaf of the “nobody” deployment. The many references to freedom of navigation, the rise of China and the continued subversion of the rule of law all seemed to point in one direction, but each time they stopped before explicitly naming the actor. malicious at the center of most of the region’s instability. .

Germany’s decision to go it alone was surprising, given the potential opportunity to fit into the British Royal Navy Carrier Strike Group deployment earlier in the year, as the Netherlands chose to do. with their own frigate. This solo deployment may have offered richer opportunities for bilateral engagement, but it also underscores several decades of German sea blindness. Deploying a single frigate without support for six months is a risky proposition, but it would probably have been too much for the German navy to engage further given the size of its force and its existing European commitments.

It may also indicate a serious gap in German understanding of the region’s changed security landscape. In a public speech delivered during the BayernDuring his visit to Singapore last month, the Chief of the German Navy, Vice Admiral Kay-Achim Schönbach, said the ship was selected specifically because it was a bit older and did not lacked the offensive punch of some newer ships, in order to avoid the appearance of provocation. .

Assuming Schönbach made this comment in reference to Beijing, it indicates how little Berlin understands the power gap involved. The number of warships and auxiliaries launched by China between 2014 and 2018 outnumbered the German navy as a whole. Today’s Chinese navy, about five times the size of the German navy, is unlikely to differentiate between frigates when it comes to provocation. When Beijing decides to take offense, it does so, whether it’s during a major project like the Australia-U.S. Naval Agreement or during a seemingly symbolic gesture like Lithuania’s improvement in Taiwan’s diplomatic status.

There was something incongruous and lukewarm about the Bayernjourney from the start. During public events surrounding the BayernDuring his visit to Singapore, Norbert Riedel, German Ambassador to Singapore, pledged that Germany would strengthen its presence and engagement in the region, with the aim of maintaining a rules-based multilateral order as well as the freedom of navigation in international waters. He and the German naval chief both spoke about the European approach and multilateralism to deployment, but only Schönbach acknowledged the apparent incongruity between the invocation of multilateralism and a unilateral military deployment. BayernThe deployment of was not only a somewhat sad commentary on the state of European navies, but also an odd way of underscoring a commitment to work with the allies.

The project was started under the leadership of former German Chancellor Angela Merkel, and is now overseen by her successor, Olaf Scholz. During her years in power, Merkel grew closer and closer to China, only acknowledging the problematic nature of that relationship at the end of her term, and leaving this new naval diplomacy plan to her successor for the ‘run. While Bayern Moored alongside the pier at Changi Naval Base in Singapore, Scholz made his first appeal as chancellor to Chinese President Xi Jinping.

Neither side seems to have mentioned the Bayern deployment, while Xi urged Scholz to continue and expand economic cooperation, and Scholz has reportedly clearly expressed his desire to deepen economic ties with China. This leaves Scholz walking a fine line, balancing a coalition deal that commits his government to pressure Beijing on human rights issues with the business opportunities presented by Berlin’s biggest trading partner. Schönbach has made it clear in his remarks to Singapore that Germany will send more larger naval missions in the future, as well as other military capabilities, but it is not clear whether Scholz’s coalition government will want to shake up the boat with the most provocative actions mentioned by Schönbach, such as transiting through the Taiwan Strait or disputed areas of the South China Sea. And if a Russian invasion of Ukraine continues to be a dangerous possibility, Germany may simply not have the bandwidth to tackle the Indo-Pacific.

In Singapore, Schönbach noted that seeing China’s expansion and size up close was very different from seeing it in Germany, and that he wanted to bring that perspective home to inform national opinions. But Berlin seems to start where many others did years ago: with the idea that economic engagement should, or even can, continue unabated while pushing back against destabilizing Beijing activities, or that International opprobrium will resound in the Chinese capital. It may not be long before Germany learns the same lesson as others that Beijing will not hesitate to retaliate against any activity it deems to be against its interests, regardless of the alleged intentions. from Berlin.

Germany could aspire to a third way for economic and diplomatic relations, unrelated to US-Chinese competition; however, this niche seems already occupied by France, and rightly so. With its history of engagement, its territorial interests and its permanent military presence in the Indo-Pacific, Paris is much better prepared to lead a major effort there. Thus, unless Germany considers joining a truly European effort, future deployments will remain free and limited in their usefulness – and Beijing, however many warnings Berlin has issued, can way to treat them as provocations.


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German finance minister promises tax breaks from 2023 – Bild https://wbts-forum.org/german-finance-minister-promises-tax-breaks-from-2023-bild/ Sat, 01 Jan 2022 23:09:00 +0000 https://wbts-forum.org/german-finance-minister-promises-tax-breaks-from-2023-bild/

German Finance Minister Christian Lindner speaks at a plenary session of the lower house of the German parliament, the Bundestag, in Berlin, Germany, December 16, 2021. REUTERS / Annegret Hilse

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BERLIN, Jan.2 (Reuters) – Germany‘s new government will offer tax breaks to individuals and businesses worth at least € 30 billion ($ 34.1 billion) during this legislature, said Sunday Finance Minister Christian Lindner.

“We will relieve individuals and small and medium-sized enterprises of well over 30 billion euros,” Lindner told the Bild am Sonntag newspaper.

Noting that the 2022 budget was drawn up by the previous government of Chancellor Angela Merkel, Lindner said his plan for 2023 will include relief such as pension insurance contributions and the end of a surcharge on the price of electricity.

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Meanwhile, Lindner, leader of the budget-cautious Free Democrats (FDP), said he had asked his cabinet colleagues to review their ministries’ spending plans.

“We need to get back to sound public finances. We have a responsibility to the younger generation,” he said.

Lindner said one way to save money would be to ditch the construction of a new government terminal at Berlin’s BER Airport, which is expected to cost 50 million euros. He suggested that a temporary building could be used permanently.

The minister is also planning a tax bill to help businesses cope with the current coronavirus pandemic, in particular by allowing them to offset losses in 2022 and 2023 with profits from previous years.

Due to the pandemic, Chancellor Olaf Scholz’s ruling coalition agreed to use an emergency clause in the constitution for the third year in a row in 2022 to suspend debt limits and allow new borrowing of $ 100 billion. ‘euros.

From 2023, the coalition aims to return to the debt brake rule in the constitution which limits new borrowing to a tiny fraction of economic output.

($ 1 = 0.8797 euros)

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Reporting by Emma Thomasson; Editing by Hugh Lawson

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COVID and climate change are straining Germany’s finances | Germany | In-depth news and reporting from Berlin and beyond | DW https://wbts-forum.org/covid-and-climate-change-are-straining-germanys-finances-germany-in-depth-news-and-reporting-from-berlin-and-beyond-dw/ Mon, 27 Dec 2021 16:46:37 +0000 https://wbts-forum.org/covid-and-climate-change-are-straining-germanys-finances-germany-in-depth-news-and-reporting-from-berlin-and-beyond-dw/

One of the first official acts of the new German finance minister, Christian Lindner, was something of a turnaround. Five days after being sworn in, Lindner – the chairman of the neoliberal Free Democrats (FDP) – presented a supplementary budget bill to parliament that a few months earlier, while still in opposition, he allegedly lambasted as totally unfounded. Now he has offered to transfer what remains of the COVID loans in 2021 to invest in climate protection.

240 billion euros ($ 272 billion) of credit had been approved for hardship loans, but some 60 million euros remain, which Lindner wants to transfer to the Energy and Climate Fund. This money must help “the transformation of one of the largest industrialized countries towards climate neutrality“, declared the Minister of Finance in the Bundestag, referring once again to the declared objective of the new coalition government of social- center-left Democrats (SPD), Greens and FDP.

But the last plan did not go well everywhere.

It is “fundamentally problematic to create financial reserves by going into debt and then using these funds to finance projects in the years to come”, criticizes the Taxpayers Association. The conservative Christian Democrats (CDU) and the Christian Social Union (CSU), now in opposition, are outraged.

“I consider this supplementary budget to be unconstitutional,” said Christian Haase, fiscal policy spokesperson for the CDU / CSU parliamentary group in the Bundestag.

This reallocation of funds, he said, was nothing more than a circumvention of the debt rules enshrined in the Basic Law, the German constitution. “I see these supplementary estimates as the beginning of the end of the constitutional debt brake.”

The curse of compromise

The Minister of Finance finds himself in a delicate situation: for years, he has been pushing for Germany to restore the debt brake enshrined in the constitution. It states that the state can only spend as much money as it takes out, except for a small line of credit to cover emergency expenses.

Due to the COVID pandemic, qualified as a major emergency, the debt brake has been suspended. However, assures the new Federal Minister of Finance, it will be respected again no later than 2023. But is this realistic? Lindner faces the constraints posed by a governing coalition that will need huge sums of money in the years to come to deal with the consequences of the pandemic – and must urgently allocate funds to deal with the climate crisis as well. .

Budget without leeway

What it means: Lindner has to find some money he doesn’t have. Germany’s federal budget is generally inflexible. One in two euros is allocated to social benefits, the lion’s share of which is made up of pensions. Reductions are not possible, as the aging society is actually increasing aggregate demand. The fallout from the COVID pandemic is also pushing up social spending. During the coalition negotiations, the FDP assured that there would be no tax hike. But that leaves new borrowing as the only option.

Since the start of the pandemic, Germany has taken on much more debt. From 2014 to 2019, all federal budgets were balanced, but in 2020 and 2021 there were record borrowing levels. The mountain of government debt has grown by around € 400 billion in two years to a total of well over € 1.4 trillion. If we combine the debts of the 16 German states and its small local authorities, the total amounts to just under 2.4 trillion euros.

It was initially agreed that the debts related to the pandemic should be repaid within the next 20 years. But in the coalition negotiations agreed by the three parties, the debt repayment was extended from 16 to 36 years.

New budget, new debt

In 2022, the federal government will continue to borrow. Under the previous government of Chancellor Angela Merkel, whose new Chancellor Olaf Scholz was finance minister, nearly 100 billion euros of new debt was expected for 2022. But that was only within the framework of a project of budget that never became law. This is common practice in years when there are general elections; it is then up to the new government either to revise the old draft or to draft a completely new one.

The question is how much new debt will actually be incurred for 2022. In recent weeks, economic forecasts have been lowered more and more in the face of the fourth wave of the pandemic. Now the fifth wave, triggered by the Omicron variant of the virus, is coming and, as you might expect, will put a further drag on the German economy: it will reduce tax revenues and again increase the need for financial assistance. of the government.

Further rise in unemployment

Aid for companies in difficulty was due to expire at the end of 2021. It has now been extended for six months. According to the Federal Ministry of Finance, nearly 58 billion euros have been paid to companies in the form of non-refundable grants (as of November 2021). Repayable aid, which includes loans, guarantees and state equity investments, amounts to just under € 70 billion.

In 2022, companies will actually have to start repaying. But how is this supposed to work as the pandemic affects business until next year? It is to be expected that many repayments will not be made, and new claims will also be filed for the contract leave and reduced hours unemployment benefits. The catering, entertainment and tourism sectors have already announced layoffs.

Boost the national economy

Managing the pandemic is, however, only an urgent area. The transformation of the economy towards climate neutrality must begin as soon as possible. “Due to the uncertainties and restrictions linked to the COVID crisis, many investments in the modernization of the economy have been canceled,” notes Christian Lindner.

He wants to use the 60 billion euros of the new supplementary budget to revive the national economy. “It is essential to start catching up now. We must no longer waste time transforming the economy and society because of the pandemic. Lindner expects this to generate more economic growth and therefore more tax revenue.

The end of austerity in Europe?

It will also be interesting to see how the new Minister of Finance positions himself in European fiscal policy. Ahead of this year’s federal election, Lindner was seen as a fear-monger, especially in southern European countries, because he wanted to advocate a difficult path to consolidation.

Today, its national supplementary budget of 60 billion euros raised quite different expectations.

This became evident during Lindner’s inaugural visit to Paris, when his French counterpart Bruno le Maire expressly congratulated him on his move. It has also been noted with approval in France and some southern European EU countries that the new chancellor, Scholz, and his vice-chancellor Robert Habeck (Greens) both warn against austerity in the within the EU.

So far, the European Stability Pact has only allowed member countries’ debt levels of 60% of their gross domestic product (the sum of all economic output).

Many countries did not comply with this restriction – in some cases significantly.

In 2019, Germany was below 60% for the first time since 2002. In 2020, it again reached over 68%. And the trend goes even further.

This article has been translated from German.

While you’re here: Every Tuesday, DW’s editors take stock of what’s going on in German politics and society. You can sign up for the weekly Berlin Briefing email newsletter here, to stay abreast of developments as Germany enters the post-Merkel era.


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German automakers enjoy record prices for luxury models as production drops https://wbts-forum.org/german-automakers-enjoy-record-prices-for-luxury-models-as-production-drops/ Sun, 26 Dec 2021 02:04:23 +0000 https://wbts-forum.org/german-automakers-enjoy-record-prices-for-luxury-models-as-production-drops/

German high-end automakers benefited from record prices for their luxury models in 2021, as a semiconductor shortage restricted vehicle supply in major markets as consumer demand soared.

Revenue per car at BMW, Audi and Mercedes-Benz has increased on average by almost 25% compared to the pre-pandemic period of 2019, an analysis by Stifel Bank for the Financial Times showed.

The increase was caused by a reversal of a decades-long trend in which the industry produced more cars than it sold. Automakers then offered increasingly higher discounts to push surplus cars onto forecourt, so sales volume targets could be met in time for accounting deadlines.

Since 2019, when the global economy weakened, automakers have started making fewer cars than they can sell, with the gap rising to around 4 million vehicles this year. While there was a similar deficit following the financial crisis in 2009, it was an anomaly amid years of overcapacity.

“We have been witnessing a reduction in stocks for three years, driven by [restricted] procurement, ”said Daniel Schwarz, analyst at Stifel. “It hasn’t happened before.”

As a result, Mercedes-Benz revenue grew from nearly € 38,000 per car in 2019 to over € 54,000 in 2021 through the end of the third quarter, while Audi’s grew from over 46 € 000 to around € 57,500, according to Stifel’s calculations.

BMW, which handled the chip crisis better than its peers, and lost less production time overall, saw a more modest increase, from just over € 36,000 per vehicle in 2019 to over € 38,000 € in 2021 until the end of the third quarter. .

Much of this has been achieved by manufacturers who prioritize the production of more profitable models.

Mercedes sales, for example, fell 30 percent in the three months to the end of September, but revenues fell only 1 percent.

Stifel’s analysis shows that in just one quarter, Mercedes profits before interest and taxes increased by 1.4 billion euros simply thanks to better prices and making chips available in high-end vehicles and at higher margin.

With investors noticing the change, executives say they will continue to pursue this strategy even as supply constraints ease.

“There is no pressure to chase volume,” Mercedes boss Ola Kallenius told the Financial Times this month, while Harald Wilhelm, chief financial officer, pledged to “focus on where to find the money “.

“This overarching strategy of not looking down [market] segments where we are but looking up, it will continue, ”Kallenius added.

Luxury car makers have also been helped by the record rise in used car prices. This not only made buying new cars more attractive, but also inflated the balance sheets of the financial branches of the high-end manufacturers, which operate large leasing companies.

“The cars are returned [to the manufacturer] after 12-36 months and the resale price is much higher than initially expected, ”said Schwarz.

“From a short-term perspective, the lack of new cars today will make used cars scarce for at least the next two years,” he added. “It should also support the price of new cars. “


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Opening of the China-Germany industrial park in Beijing https://wbts-forum.org/opening-of-the-china-germany-industrial-park-in-beijing/ Thu, 23 Dec 2021 19:29:46 +0000 https://wbts-forum.org/opening-of-the-china-germany-industrial-park-in-beijing/

BEIJING – An industrial park focused on economic and technological cooperation between China and Germany opened in Beijing on Thursday.

Approved by the National Development and Reform Commission of China, the Beijing China-Germany Industrial Park is a nationwide cooperation project between the two countries.

Major industries highlighted in the park include new energy smart vehicles, smart equipment and industrial internet sector, science and technology services, trade shows, and the digital economy.

With a total planned area of ​​20 square kilometers, the park is made up of two distinct districts in the northeast of Beijing, both with convenient transportation links to Beijing International Airport, major exhibition venues and others. industrial parks and upscale areas of the city.

Leading German management expert Hermann Simon praised the park’s advantages in terms of location, global talent and industrial ecosystem during the inaugural ceremony via video link.

The park has so far brought together more than 70 German-funded companies, including Mercedes-Benz and BMW, with total annual production exceeding 30 billion yuan (about 4.71 billion dollars).


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We can’t grant a honeymoon https://wbts-forum.org/we-cant-grant-a-honeymoon/ Tue, 21 Dec 2021 16:51:01 +0000 https://wbts-forum.org/we-cant-grant-a-honeymoon/
  • If the policy were consistent, the aid could be withdrawn
  • Dramatic situation: the damage in 2021 exceeds that of 2020
  • Five trade show requests to federal and state governments

The trade fair industry in Germany demands from the new federal government clear trade fair regulations for the start of 2022. By early spring, some 130 trade fairs are planned in Germany. The majority of them will have a strong international orientation. More than ten exhibitions for 2022 have already been postponed or even canceled. The reason: inconsistent policies.

  • Jörn Holtmeier, Managing Director of the Association of the German Trade Fair Industry (AUMA): “Aid worth billions could be avoided if the federal and state governments pursued clear and forward-looking policies – also during this pandemic . A decision in winter has a shoot on summer. The omission of decisions in the summer has a double effect on the pandemic winter. The situation is dramatic. The economic damage in the salon industry will be even greater in 2021 than in 2020.

From today, trade fairs are again prohibited in three German Länder. In some places trade fairs are no longer economically feasible due to all kinds of restrictions. 71% of planned shows were canceled in 2021, against 68% in 2020. The total economic loss since the start of the pandemic now stands at 46.2 billion euros. While last year alone the damage amounted to € 21.8 billion, in 2021 at least an additional € 24.4 billion will be lost.

  • Jörn Holtmeier: “Our industry is the economic sector hardest hit by this pandemic. The marketplace fair is currently experiencing its biggest shock. Never before have well-planned trade fair programs had so little continuity. Never before had trade shows had to be backed by hedging programs. Never before have the various sectors of the economy missed their main trade fairs so much.

230,000 jobs in Germany depend on the trade fair industry. 165,000 jobs are threatened by ups and downs. The return of the international audience is crucial for Germany’s reestablishment as a country of trade shows and as the location for two-thirds of all the major trade fairs in the world economy. Economic recovery is only possible if restrictions on international travel are lifted, if vaccine procrastination ends, and policy allows trade fairs, Holtmeier explained. “As sorry as we are, we cannot grant a 100 day honeymoon. We ask Robert Habeck to act immediately!”

Five demands of the trade fair industry accompany the inauguration of the new Federal Minister of the Economy Robert Habeck:

  • The special exhibition fund must be supplemented by a security fund for exhibitors and service providers at the exhibition. The current program is missing the mark. Investments by exhibiting companies are not covered.
  • Small and medium-sized enterprises must be further supported with an independent program to promote national trade fairs of at least 30 million euros in 2023. The promotion of young innovative enterprises must be extended.
  • The Netherlands and Austria are already showing the way. Also in Germany, people should be considered vaccinated if they have already been vaccinated with vaccines recognized by the World Health Organization.
  • A major effort is needed from German missions abroad and the German trade fair industry to promote Germany as a location for international trade fairs. In other countries, there are already specific programs to direct international business visitors to the domestic market.
  • The way out of this pandemic is and will be vaccination. In order to be able to return to stability and predictability, the trade show industry strongly supports the introduction of a general compulsory vaccination against Corona in Germany. The earliest would be best. A complete corona strategy that is easily understood by everyone is also required. The first, second and booster vaccination should be accelerated and should be easily accessible. The heart of this strategy must be accompanied by the coherent implementation and monitoring of government measures.


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Germany to choose Nagel as head of Bundesbank https://wbts-forum.org/germany-to-choose-nagel-as-head-of-bundesbank/ Mon, 20 Dec 2021 09:05:00 +0000 https://wbts-forum.org/germany-to-choose-nagel-as-head-of-bundesbank/

© Reuters. FILE PHOTO: Joachim Nagel, Member of the Board of Directors of the German Bundesbank, attends the annual press conference in Frankfurt, March 12, 2015. REUTERS / Ralph Orlowski / File Photo

FRANKFURT (Reuters) – Germany’s new government will choose Joachim Nagel, a career banker with ties to the ruling Social Democratic Party, as the next Bundesbank chief, the Handelsblatt newspaper and a government source said on Monday.

Nagel, a former member of the Bundesbank’s board of directors, will succeed Jens Weidmann on January 1, who resigned five years earlier after a decade of unsuccessful opposition to the European Central Bank’s aggressive stimulus policy of rates sub-zero interest rates and massive government bond purchases. .

The appointment could be formalized later this week by Chancellor Olaf Scholz, Handelsblatt added.

The 55-year-old economist will take over at a time of tension. Inflation is more than double the ECB’s 2% target, and opposing camps within the ECB’s Governing Council have markedly different views on its likely course.

A former member of the board of directors of the public development bank KfW Bank, Nagel is currently employed by the Bank for International Settlements.

Although he has not publicly expressed his opinion on monetary policy for years, the speeches he gave as a member of the Bundesbank board between 2010 and 2016 show that he adhered to the firm stance of the German central bank on inflation; and the emphasis on market discipline for banks and governments.

As head of the Bundesbank, Nagel would join Isabel Schnabel on the ECB Governing Council as one of the two Germans.

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Nord Stream won’t open if Russia attacks Ukraine, Germany says https://wbts-forum.org/nord-stream-wont-open-if-russia-attacks-ukraine-germany-says/ Sat, 18 Dec 2021 16:03:00 +0000 https://wbts-forum.org/nord-stream-wont-open-if-russia-attacks-ukraine-germany-says/

German Economic Affairs Minister Robert Habeck warned in an interview published on Saturday of “serious consequences” for the Nord Stream 2 gas pipeline connecting Russia to Germany if Moscow attacks Ukraine.

The Baltic Sea gas pipeline is expected to double the supply of cheap natural gas from Russia to Germany, which the European Union’s largest economy says is needed to help it switch from coal and l ‘nuclear energy.

But the 10 billion euros ($ 12 billion) project has been delayed for years and has drawn heavy criticism from allies in eastern Germany like Poland and the United States.

Critics say the project will increase Europe’s dependence on Russian gas and Ukraine has described it as a “geopolitical weapon”.

“Any new military action cannot be without serious consequences”, declared the Minister of the Greens. Frankfurter Allgemeine Zeitung, a Sunday weekly, referring to an accumulation of Russian troops on the Ukrainian border.

He warned that “nothing can be ruled out” if there is “a further violation of the territorial integrity” of Ukraine.

Germany’s new government threatened to block the operation of the pipeline if Russia invaded Ukraine. “In the event of further escalation, this pipeline could not come into operation,” said Foreign Minister Annalena Baerbock.

Mr Habeck said: “From a geopolitical point of view, the pipeline is a mistake”, adding: “All countries were against it except Germany and Austria”.

He added: “The pipeline has been built yet. And the question of its commissioning remains open and must be decided according to European and German law.

The German authorities are waiting for the Swiss-based “Nord Stream 2 AG” gas pipeline company to submit documents to restart the certification process.

The pipeline would then also have to be approved by the European Commission.


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German Finance Minister accused of “pick-pocket tours” by CDU https://wbts-forum.org/german-finance-minister-accused-of-pick-pocket-tours-by-cdu/ Thu, 16 Dec 2021 20:51:00 +0000 https://wbts-forum.org/german-finance-minister-accused-of-pick-pocket-tours-by-cdu/

In the opposition, the German Christian Lindner – leader of the Liberal Democratic Party – was quick to denounce anything that looked like a budget hoax.

In his first appearance in the Bundestag as the new federal finance minister on Thursday, Mr Lindner had to endure accusations of hypocritical creative accounting.

Looking ahead, many European capitals are hopeful that Lindner will show equal creativity in the ongoing debate on the EU’s future financial foundations.

The dispute in Berlin is over an additional budget of 60 billion euros to finance what Mr Lindner has called “the transformation of one of the largest industrialized countries towards climate neutrality“.

This transformation is at the heart of the politics – and the prestige project – of the Greens, one of the new coalition partners of the FDP with the Social Democratic Party (SPD).

“It’s not just people who need a boost, but our economic development as well,” said Lindner. “We cannot waste time with the pandemic. “

But the opposition, the Christian Democratic Union (CDU), has screamed scandal and this week asked the Constitutional Court to verify the legality of the budget, which reallocates unspent pandemic emergency funds.

On Thursday in the Bundestag, CDU finance spokesman Christian Haase accused Mr. Lindner of “pick-pocket tours”.

“In a miraculous transformation, corona loans become climate loans,” he said. “The pandemic is an exceptional emergency. . . climate change is a long-lasting challenge that we must include in our regular budget.

Debt brake

Some constitutional lawyers say the finance minister‘s decision is problematic in at least two ways: it violates the principle that budgets are only good for one year, and it puts a strain on the principles of the debt brake on the government. Bundestag.

This self-imposed measure forces German MPs to support only balanced budgets. Set aside during the pandemic, the FDP succeeded in coalition talks to reactivate the debt brake from 2023. Because the pro-business party also got a guarantee of no new taxes, the first task Mr. Lindner’s as finance minister has been to raise unspent money for climate investment.

As German political parties use the budget line to get used to their new roles, Mr Lindner’s praise on Thursday for “transformative investing” will have ears praised across Europe.

In opposition, the FDP has traditionally been an advocate of the post-war German social market economy, emphasizing only a limited role of state intervention in the economy. But the new government appears poised to move beyond a love of balanced budgets and aversion to debt-financed investments.

Stable finances

During his first visit as finance minister to Paris, however, Lindner warmly said that encouraging economic growth was “the best circumstance for stable finances”.

The flexibility of the German minister on how to achieve this economic growth goes hand in hand with the new coalition agreement, calling for a “simpler and more transparent” Stability and Growth Pact – governing the debt levels of the members of the the euro zone.

In addition, the coalition promises to “further develop fiscal rules.” . . to strengthen their effectiveness in the face of the challenges of the time ”.

As Berlin will activate private investment and reallocate public money back home for its climate transformation, the German daily Süddeutsche Zeitung sees a “back door” open at EU level. Some observers see an initiative to strike an ambitious new agreement with France on rewriting post-pandemic EU and euro financial rules. The big economists are more careful.

“France is already working to rewrite the budgetary rules so that climate and investment projects are excluded from the deficit rule,” said Professor Lars Feld, one of the government’s economic “wise men”. He believes Berlin is more likely to accept less ambitious Stability Pact rewrites, such as allowing members to extend their debt repayment periods.

“And for that,” he said, “Berlin should ask for something in return.”


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The first German warship in nearly two decades enters the South China Sea https://wbts-forum.org/the-first-german-warship-in-nearly-two-decades-enters-the-south-china-sea/ Wed, 15 Dec 2021 07:17:00 +0000 https://wbts-forum.org/the-first-german-warship-in-nearly-two-decades-enters-the-south-china-sea/

BERLIN, Dec.15 (Reuters) – A German warship sailed the South China Sea on Wednesday for the first time in nearly 20 years, a move that sees Berlin join with other Western countries in expanding its military presence in the region amid growing concern over China. territorial ambitions.

China claims almost all of the South China Sea, despite an international tribunal ruling that Beijing has no legal basis for these claims and has built military outposts on man-made islands in waters that contain gas fields and a rich peach.

The German Navy ship has started transit through the South China Sea en route to Singapore which is expected to take several days, a defense ministry spokesperson in Berlin said on Wednesday.

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The frigate Bayern is the first German warship to cross the South China Sea since 2002, waters through which 40% of Europe’s foreign trade transit.

The US Navy, in a show of force against Chinese territorial claims, regularly conducts so-called “freedom of navigation” operations in which their ships pass near some of the disputed islands. China in turn opposes US missions, saying they do not help promote peace or stability.

Washington has placed the fight against China at the heart of its national security policy and seeks to rally its partners against what it says are Beijing’s increasingly coercive economic and foreign policies.

Officials in Berlin said the German navy would stick to common trade routes. The frigate is also not expected to cross the Taiwan Strait, another regular American activity condemned by Beijing.

Nonetheless, the former German government made it clear that the mission serves to highlight the fact that Germany does not accept China’s territorial claims.

Germany is walking a tightrope between its security and its economic interests as China has become Berlin’s most important trading partner. German exports there have helped mitigate the impact of the COVID-19 pandemic on Europe’s largest economy.

Countries like Britain, France, Japan, Australia and New Zealand have also expanded their activity in the Pacific to counter the influence of China.

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Reporting by Sabine Siebold; Editing by Michael Perry

Our Standards: Thomson Reuters Trust Principles.


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