Guten Morgen!

Here it is, the only news summary of the week not mentioning Trump’s Corona infection. We just want to say this: like Merkel and every other European head of state we wish him and the First Lady a speedy recovery.

Enjoy reading and ping us for more!

Anna                                Christian

If You Can’t Ban ‘em, Bury ‘em in a Mountain of Bureaucracy

For the better part of two years, Germany has been back-and-forth about its official stance on using Huawei to supply the components for its 5G-network. Now, an agreement has been reached. Rather than pursuing a blanket-ban on Chinese technology, the German government has decided to make life difficult for Chinese technology companies the only way they know how: through bureaucratic red tape and meticulous standards.

More specifically, the government will mandate a two-step procedure to check all foreign technology components. The easy part: a technical evaluation of components. The less easy part: To supply technology products in Germany, the manufacturer needs to be declared “trustworthy” by several Federal Ministries. A test no Chinese tech company, especially Huawei, would currently pass. Many entities within the German government, including the Federal Intelligence Service (BND) and the Federal Foreign Office have expressed concern about Chinese government interference in critical infrastructures or private company affairs.

This agreement serves the interests of the German government quite handsomely, as it can truthfully deny explicitly discriminating against Chinese companies (very good for continuing trade relations), while also reducing the share of Chinese technology in German mobile networks (even better for continuing the German love affair with privacy).

Corona Update: Merkel Is Warning – And Germany Is Listening

This week, in two speeches in front of the Parliament and Minister-Presidents of the German States, Chancellor Merkel made clear that when it comes to Corona, we’re not out of the woods yet. In light of increasing infection rates, Merkel urged the States to put a new set of rules in place to combat rising infections more efficiently.

For starters, Merkel called on Federal States, cities, and municipalities to enforce stricter rules for false statements on contact tracing lists in restaurants and bars. In September, there was a giant outbreak in a bar in Hamburg and it turned out that over 100 people visiting the bar chose to call themselves “Max Mustermann”, which is basically our version of “John Doe.” One major issue is still private parties, where Merkel and the Head of States now agreed that indoor private parties should not exceed 25 people.

All in all, we are definitely not through this pandemic, but German federalism is making progress. In the past, reaching agreements between the Head of States and the Federal Government was far more complicated. The current situation might actually ensure Germany will be able to react to new developments more quickly.

Texting Your Friend on WhatsApp by Using Telegram – This Could Become Reality

Communication apps aren’t compatible. This can be annoying. If you have friends who refuse to use WhatsApp but prefer Telegram, you are required to have both. This might not be the biggest problem in the world right now, however, restricting access for other apps is one way big tech can extend its market power. EU Parliamentarians are now suggesting to include a requirement for tech companies to open their APIs to other companies in the upcoming Digital Services Act (DSA, we reported).

If your company is active in tech, the DSA might be the most important legislative development to monitor in the EU. It will replace a twenty year-old regulation and be the new super-regulation for nearly everything in the digital markets. Through a single regulation, the EU wants to promote competition in this highly concentrated market and protect democratic values against hate-speech. Regardless of whether the MEPs demands are met by the Commission and Member States, the guidelines for competition policy in the DSA will define future business in Europe. For more detailed info, feel free to reach out to us.

Germany’s Defense Suffers (Not Only) Because of Corona

Concerning our military, we are quite humble in Germany. Whenever the “Bundeswehr” buys new helicopters, for instance, we’re just happy if they fly at all. This week, a “Verschlusssache” (transl. “classified document”) of the Federal Ministry of Defense was leaked which admitted that at least eight big procurement contracts have Corona-related delays. The Federal Government can only quantify the overruns for one of those projects, currently estimated at €26 million over budget.

Poorly functioning equipment is not the only thing causing negative publicity for the Federal Ministry of Defense.  The Ministry was also plagued by a scandal where highly remunerated advisory contracts where given out to companies where former Federal Defense Minister Ursula von der Leyen’s sons worked. Overall, it cannot be excluded that combat readiness of the forces might suffer from the current situation, the Verschlusssache states.

Brexit Update No. “I forgot to count, tbh” – EU Commission Sues the UK

This week, the House of Commons in the UK passed a new law for the UK’s internal market. This law violates the UK’s exit agreement with the EU. The EU urged the UK to change the law before Wednesday, which Boris Johnson refused to do. Now, the EU will take legal action. The subject at stake is the “North-Ireland Protocol”, which we reported on once or twice before the summer break.

For the EU, Brexit must feel a bit like Groundhogs Day. However, the UK’s hope that the EU might change and become a “nice person” like Bill Murray is probably wishful thinking. It seems this time, the EU won’t back down, and the UK is starting to feel the pressure. For instance, this week EY announced that it will shift 7,500 jobs and €1.2 billion of clients’ money to the EU with other companies likely to follow. Currently, the EU holds the bargaining power and the UK will have to move if they want to reach an agreement. While we are certainly sorry for our pro-EU friends in the UK, we cannot help but feel some “schadenfreude” for the Brexiteers.

All for One, and Digital Identities for All

Earlier this week, the European Commission presented its vision for an EU-wide system for digital identities, calling for a “trustworthy and secure” solution to be used across both public and private sector online platforms. The idea is for European citizens to use a single digital identity to authorize processes online quickly and securely for everything from accessing medical records to logging onto social media. Currently, the landscape for digital identification is extremely fragmented: 14 EU Member States have their own official eID schemes, and various private companies offer digital identity solutions, often linked to specific economic sectors. To accentuate the problem even more, no solutions function across borders.

While it’s promising the EU recognizes the possibilities a uniform digital identity solution can unlock, there’s a lot of work ahead. The first obstacle the Commission will face is low levels of digitization among public sector entities across Member States. A digital identity doesn’t bring much if government processes still need to be completed with paper and pen. Second, the EU is not operating in a vacuum. The private sector is well aware of the urgent need for a cross-border, cross-sectoral digital identity solution, and can bring a product to market much quicker than any public institution could. If the EU has learned anything from its past shortcomings (cough cough cloud service platforms), it will look for a way to cooperate with, not compete against technology companies.

• Presidential Debate: Chaos or Strategy? Regardless of whether you live in Germany or the USA, it was obvious the first presidential debate was a mess. No one seemed to gain anything, but we in Germany are curious to know whether the debate was really pure chaos, or rather a calculated strategy to swing votes towards or away from any of the two candidates? We’d love to hear your thoughts.
• Documentary Exposes the Right Wing AfD: This Monday, the broadcast channel “ProSieben” showed a documentary in which a private conversation of the (now) fired AfD-Spokesman was recorded. In this conversation, he told a right-wing influencer that Germany has to suffer so that the right-wingers can be successful. Furthermore, he said that migrants could always be “shot or gassed to death” when needed. It was the first time internal conversations of the right-wing party were exposed.
• Merkel Goes Viral: Merkel drew significant attention on Twitter for a video in which she explained how infection rates could become critical using a mathematical model she created herself. Concluding this week, I want to say: I am grateful for a chancellor that recognizes the gravity of the situation AND that Angela Merkel would also definitely be great as a math teacher.

All Members or German Parliament, isolate?

Random fact of the day: MPs going home after this week’s plenary sessions will have to quarantine in their constituencies before coming back to Berlin for another week of plenary sessions next week.

OK, OK, that’s not ENTIRELY true, but:

In the last weeks, Germany, being a model student in Corona-containment, declared country after country a “risk-area.” While it was not forbidden to travel there, a 14-day quarantine or a Corona-test is mandatory upon return (not that anyone was controlling the execution, but, you know, in theory).

For several weeks now, the numbers have been going up in Germany again. As a result, Germany had to declare some areas within its own borders “risk-areas”. One of them: Berlin-Mitte, a neighborhood in the capital, where (apart from the Krautshell-production center,) Parliament, the Chancellery and most Federal Ministries are located.

And since rules are king in Germany, travelers coming from “risk-areas” within the country have to follow the same rules as returnees from abroad. At least that is the opinion of four German states (the others don’t have an opinion yet, or a different one, and it would not be Germany if all 16 states agreed).

So, quarantine weekend for MPs? Not quite, because: Schleswig-Holstein is exempting MPs as a general rule, Rheinland-Pfalz is exempting civil service employees (so probably MPs as well…) and Berlin is working on a new regulation. So only MPs from Mecklenburg-Vorpommern are affected and a request to the authorities for a formal exemption is recommended, just in case.

Btw, Mecklenburg-Vorpommern, that’s where Mrs. Merkel has her constituency. But I guess she was gonna stay in Berlin anyways…