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Issue #26

Issue #26

Guten Morgen!

Another week, another Krautshell with the latest from the other side of the world.

Enjoy and ping us for more!

    

Anna                                Christian

FIRST, SOME SOLID INTEL:

Infection Protection Election

The spread of the Coronavirus has raised similar questions for political debate on both sides of the Atlantic. Many people ask themselves, to what extent does a government or executive have the right to intervene in the everyday lives of citizens to limit contagion? For months, the answer to that question has been unclear in Germany, and just like in the US, people here were and are questioning whether the government is encroaching on citizens’ rights illegally and undemocratically.

This was the state of affairs, as the Bundestag convened to vote on new amendments to the Infection Protection Act (Infektionsschutzgesetz, try saying that three times fast) this week. Following a lively debate in the Bundestag, and approval from the Bundesrat, the amendments were adopted. During the debates, politicians from the governing CDU/CSU-SPD coalition defended the legislative reform, stating it was necessary to avoid rising infection figures. Meanwhile, the far-right AfD chillingly likened the reform to the 1933 Nazi Authorization Act (Ermächtigungsgesetz) in which the Reichstag had disempowered itself and transferred absolute legislative power to Chancellor Adolf Hitler. Yes, really.

So, what exactly does this new amendment do? Basically, it defines when the government is allowed to mandate specific measures like wearing masks, restricting cultural activities and sports, and closing stores. When a threshold of 35 new infections per 100,000 inhabitants within seven days is surpassed, the government can apply “strongly restrictive protective measures,” and when that value jumps to 50 per 100,000, the government can mandate “severely restrictive protective measures.” In a nut(Kraut)shell: no more legal gray space.

Blame Us: We Called It Too Early

Do you remember last Krautshell? We called that the negotiations about the 7-year EU budget and the Corona aids were finally over. Well, apparently, we have to revise that statement. Everything seemed to be solved, even the controversial rule-of-law mechanism which binds the allowance of EU funds to the adherence of EU values like protection of democracy, freedom, and equality. This week, Poland and Hungary rejected the budget specifically because of that rule-of-law mechanism.

The EU Parliament has advocated for the mechanism for quite a long time, as many claim the governments in Poland and Hungary have slowly but steadily been undermining the independence of the judiciary and science in their countries. Hungary and Poland deny these allegations of course, and spin the rhetoric in a way that makes EU politicians look like a bunch of cultural imperialists. However, both countries benefit A LOT from EU money. This means the game they’re playing is a dangerous one, and there are many indications that the EU won’t play along this time. Only problem: the decision about the EU budget has to be unanimous among Member States. We are eager to learn from our jumping the gun, and refer you to what uncertainty and probability researcher Nassim Nicholas Taleb says: it is not at all clear how long this process might take and what the outcome will be. We just hope it will be good as the EU Corona aids are desperately needed in many Member States.

Digital and Green Transition: No European Left Behind

Europe is in transition mode. The EU Commission has ambitious plans for the coming years with the European Green Deal and the initiative “Shaping Europe’s Digital Future.” The convergence of both the green and digital transformations of the European economy brings with it many positives. These transitions, when done right, can raise the quality of life for citizens across the EU. However, as the European Commissioner for Jobs Nicolas Schmit pointed out, the European citizenry must be given the opportunity to advance themselves and reap the benefits of these transformations.

With the Commission’s Pact for Skills, EU leaders hope to give European citizens the tools they need to thrive in a modernized, green economy. The Pact was officially launched last week, and specifically, it serves as a mobilization and incentive mechanism for private and public entities to take concrete action to upskill and reskill the European workforce. Last week, the Commission announced the first skills partnership in the automotive, microelectronics, and aerospace and defense sectors. In the automotive and aerospace and defense sectors, the goal is to upskill 5% and 6% of the workforce respectively, and raise €2 billion in joint public and private sector funding for up- and reskilling in microelectronics. In this program, the Commission will act as a link between private companies, regional or local public-sector entities, industrial ecosystems, and individual citizens. It will also guide participants towards possible sources of EU funding to support their skills training efforts.

So, if you want to take part in the great European skills effort, and maybe receive some EU-funding along the way, you can sign the charter and join the pact.

Work a Little Longer

A working group of the governing party CDU drafted a strategy paper to reform pension in Germany. The main points are to expand the working lifetime and also apply the liability for pension fund payments to earning that are not wage-related like capital gains. Furthermore, the CDU politicians want to include politicians, public officials and the self-employed in the pension fund and give extra credits for a longer working lifetime.

In Germany, pension is more like an insurance, and is financed partly from contribution payments and partly from tax money. The whole system is public and the importance of personal or company pension plans is considerably lower (because of several not-so-interesting reasons). This causes a major problem: demographic change means the population is aging, and a system based on young people paying the money for old peoples’ pensions won’t cut it anymore. The reform could solve some of these problems as it strengthens the role of private pension plans and capital markets-based retirement planning. However, the fact that you would have to work 45 years to get your pension without any deductions might also be unpopular among many voters. 45 years is quite a long time and would effectively mean that you cannot retire before 67. What is certain: you definitely need to rewrite the song “When I’m sixty-four” by the Beatles…

Save my Parliament

As already reported above, the German Parliament adopted the changes in the Infection Protection Act (btw: “Infection Protection” would be a good title for a really dope rap album imho). Like in the US, we also have some conspiracy theorists and “Querdenker” (literally translated as “lateral thinkers,” but contextually better translated as “nutjobs”) that smell the end of democracy. The AfD, Germany’s right-wing party, was in the Parliament with banners of obituaries for the German constitution. And: the AfD politicians planted right-wing media people in the Parliament that harassed Minister of Economics Peter Altmaier (CDU) and other parliamentarians.

Fortunately, the majority of Germany doesn’t suffer from historic amnesia. The approval of the changed Infection Protection Act in the Parliament is in fact actually a strong indication that democracy still works. Especially, since government power is extended only for a limited amount of time and can be withdrawn by the Parliament. However, in Germany we should definitely be alarmed about right-wing politicians in the Parliament and conspiracy theorists on the streets trying to delegitimize democracy. Their actions are calculated, and we cannot let this calculation pay off. Democracy always needs our support, but it particularly needs it now.

And then the Commission Said: Let there be Wind!

Back in September, Commission President Ursula von der Leyen announced plans to cut EU greenhouse gas emissions by 55% by 2030, compared to 1990 emissions levels. By 2050, the EU plans on being climate neutral. While EU Member States have had an excellent track record, reducing emissions by 25% since 1990 while simultaneously growing the economy by more than 60%, the current target is certainly an ambitious one.

To help reach these lofty (but attainable) goals, the Commission presented an EU Strategy on Offshore Renewable Energy this week. In short: the strategy sets the goal of increasing Europe’s offshore wind capacity from its current level of 12 Gigawatts (GW) to at least 60GW by 2030, and 300GW by 2050. Furthermore, the Commission suggests cross-border cooperation between Member States as well as an investment of €800 billion by 2050. According to experts, the funds for this massive expansion are available. While offshore wind power was an inadvisable investment a few years ago due to high costs, Bloomberg New Energy Finance reports costs have fallen by more than 60 percent since 2012. Therefore, if you’re looking to diversify your investments and help the planet while you’re at it, European offshore wind may be your answer.

LONG STORY SHORT:

  • Gaia-X: We’ve reported on the EU cloud project partially conceived by Federal Minister of Economics Altmaier (CDU) quite a few times. Just a brief update: Yesterday, a two-day Gaia-X summit ended with the support of more EU countries for the project. Still, there is quite some work along the road. If you are interested in the EU cloud infrastructure, reach out to us.
  • High Infection Rates, but Measures Work: This is according to the Robert-Koch-Institut (RKI, basically our chiefs of the pandemic). Germany is in another “Lockdown light” since beginning of November, but still reported its highest ever case numbers last Friday. Even though infections are high, the RKI sees a stabilization of case numbers. We now have to hope that the level will decrease. Slight optimism allowed.
  • Digital Party Convention: The Greens may be our future government party. Current polls predict the party to receive 18.4% of votes in the 2021 Federal Elections, which could potentially make them the second largest party in the Bundestag. If they do gain this percentage, it is very likely they would form a governing coalition with the CDU/CSU. They will hold their digital party convention this weekend, where they want to decide on their political program. The Greens like to be viewed as the party of science, and they definitely are when it comes to climate change. However, they are very hesitant concerning scientific insights about the benefits of genetic engineering; a way to combat climate change and probably also develop a COVID-19 vaccine. They want to solve the problem this weekend, let’s see if they are able to.

WHAT’S ON OUR MINDS

By Christian, Founder and MD

Come as You Were

This week, the German Soccer Team lost 6:0 against Spain in the UEFA Nations League. ESPN said we “could have suffered an even higher margin of defeat if Spain hadn’t been wasteful in front of the goal” and the Spanish El Mundo said that „España humilla a Alemania en una noche para la historia“. Ja, ja….🙄

It was Die Mannschaft’s biggest defeat since 1931, when they lost 0:6 to Austria, in a friendly match! For your perspective, In 1931:

  • Nevada legalized gambling
  • the Star-Spangled Banner became the text for the US-Anthem
  • Thomas Edison filed for a patent (on something electroplated)

This has not been the best year for German soccer. They’ve only won 3 out of 8 matches in 2020, they rank #14 on the FIFA World Rankings, and now a historical defeat that brings us back to LARRY HAGMAN’s birthyear. But STILL, our manager Jogi has not been let go.

This is why: Sports and politics are about stability. Merkel remains the most popular politician, voters send Biden back in the White House (and the other voters help Trump consider staying for good) and Jogi remains the gaffer. Good old times, no news is good news, old facts are good facts and that is what we (and Larry) have always wished for!

This time I concur, concerning both the German national team and Christmas 2020 I have the same wish: Please come as you were!

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