Guten Morgen!

We wish you a wonderful start into your weekend and the new year 2021 with our newest edition of the Krautshell. May all your wishes come true this year – and even if they don’t, may this year be better than the last. As always, enjoy and ping us for more!

Anna                                Christian

Looking Across the Atlantic

Yes, normally we refuse to comment on US politics. Partly because that’s not the purpose of our weekly, partly because we definitely lack expertise, and partly because we don’t think anybody wants to hear what the people from Europe have to say about the USA. That being said, acting like what happened in the Capitol hasn’t been the number-one-topic in German and EU politics this week would just be neglecting reality – and we don’t want to do that either.

As you can certainly imagine, we were just as shocked as you when we saw pictures from Capitol Hill late Wednesday evening. We won’t list all the reactions of politicians but even Chancellor Angela Merkel and Federal President Frank-Walter Steinmeier made unusually clear statements, condemning the riots and promoting the defense of democracy. And this has reasons: it was only in August when right wingers of the “Querdenker” movement (the people who believe Corona is fake and some other wild stuff) nearly made it into the Reichstag. Seeing pictures from the US alarmed us again that democracy is at stake everywhere and needs the support of democrats (meaning the philosophy, not the US party) every day. Rest assured that people in Europe stand with you in your support for the democratic institutions and that we all hope we don’t have to see such pictures again anywhere in the world. And now, time for the fun part of Krautshell!

By the Way: We (Could) Have An Agreement With China

Probably because of all the Christmas and New Year’s “stress”, a quite remarkable piece of news went largely undetected. Yes, the EU has negotiated an investment agreement with China. It took years and then suddenly, on the 30^th of December, just a small note: “We’re done.” The agreement mainly concerns market access for EU companies in China, clarifying these companies shall be independent from internal Chinese governance and only subject to the terms of the agreement. Furthermore, as the German government puts it, it’s China’s first ever agreement based on “values and sustainable development principles”. Whooh! – climate 1, China 0. Or maybe not…

The exact wording of the agreement is not yet known – the final version is being drafted over the next few weeks. However, there are some whispers that, for instance, passages concerning human rights violations remain rather “vague”. Who would’ve thought? Furthermore, after negotiating for years, Germany closed the deal surprisingly quickly, eliciting criticism from the EU towards Germany. And, we have to say: we can understand the criticism (we are usually quite nice with our government, so this was about time, I guess): Germany always complained when other (mainly smaller) EU countries negotiated with China on their own. The deal was closed between Ursula von der Leyen and Charles Michel (EU side) and Xi Jinping, but Merkel and Macron were also present. Merkel was there because technically the German EU Presidency being still ongoing, but Macron had no right taking part. Other EU countries criticized these actions as Germany always promotes “unity”. This could prove important when the EU Council and Parliament have to agree to the final version of the agreement.

Brexit Update Number 24,958… or was it 24,959?

It seems Christmas miracles do happen. Just before time on the Brexit clock ran out, the EU and the UK agreed to and ratified a deal that lays down the details of the future relationship between the two entities on December 24^th and 30^th, respectively.

So, what does this deal actually contain? To summarize it in one sentence: a whole lot of “let’s talk about this later, when we don’t have this deadline hanging over our heads.” For example, neither side recognizes the other’s system of rules designed to protect the safety of produce and animal products. This means British farmers exporting to the EU need extra certifications and vice versa. Furthermore, there’s bound to be more disagreement concerning state aid to key economic sectors, as the UK is free to enact its own system for subsidy control, potentially undercutting EU businesses. Also, the details of the Mutual Recognition of Professional Qualifications mechanism need to be revisited. However, on a positive note, energy will continue to flow between the UK and the EU through new trading agreements, and both sides will continue to cooperate on renewable energy and climate change matters. So, get ready for Brexit to pop back up. Over and over again.

Quantum Computing: All that Money, Nothing to Spend it on

Germany’s recent digitization push has been given a massive financial injection, as the Federal Ministry of Education and Research (BMBF) announced the allocation of 120 million euros from the Future and Economic Stimulus Package for quantum technologies this week. Another 400 million euros are earmarked for quantum technologies in the 2021 budget. Specifically, the 120 million euros will go towards projects like QuNet, meant to establish tap-proof quantum communication networks between federal authorities, and setting up curricula introducing the fundamentals of quantum computing to schoolchildren.

Sounds great, but for the opposition parties in the German Parliament, what’s missing is a plan. The Greens have accused the government of “dragging its feet on the third key technology after AI and research on battery cells,” and falling far behind in technological competitiveness. The reason for this might be that it’s unclear who’s in charge of promoting these new technologies: the ministries for research, economics, and finance all have their hand in the jar, but no single ministry is stepping up. One thing is clear: Germany needs to pick up the pace it risks slipping into digital obsolescence.

Oh No, not the Germans too!

As more and more details emerge about the massive hack of various US government departments and private companies through the software distribution platform SolarWinds, the German government has now admitted that certain public in agencies in Germany were also using the compromised software.

According to a response from Federal CIO Markus Richter, at least 16 German federal ministries and agencies, including the Federal Ministry of Transport and Digital Infrastructure, the Federal Criminal Police Office, and the German Patent and Trademark Office have used the tool in the past or are still using it now. That being said, Richter stated that no unauthorized access to government systems had been registered. The FDP Parliamentary group didn’t take Richter at his word though, as they pointed out that an assessment only occurred after they had submitted a formal question. An FDP politician also called out the Federal Government for being too blasé about the threat, stating “instead of worrying about Germany’s IT security, the Federal Government is complaining about the research effort involved in figuring out what happened.” The official report detailing to which extent German IT systems were compromised, to be presented on January 13^th, will reveal whether Richter was correct in his assessment.

New Year – (Not So) New Me

The new year is always a good point to start something new, make some resolutions or simply start working again while the energy tank is still full. Politically, this is the time of conventions – the CSU (Bavarian sister party of the CDU), the FDP and the parliamentary group SPD came together this week (separately, of course) to discuss a wide variety of topics. The parliamentarians of the SPD discussed old and new legislative procedures on Friday, preparing for the last few months before the election. The CSU and the FDP were more preparing FOR the election.

The CSU is unusually seeking harmony – often their January meetings incorporated criticism against Merkel, and one time they even invited the not-so-beloved Hungarian Prime Minister Orban. This year, they were full of compliments for Merkel (of course, also invited via video call), promoted more climate protection and looked forward to what is already called a “super election year” (not only federal elections but many state elections as well). The FDP completely focused on vision and willingness to shape politics in Germany in future. The opposition party, which often heavily criticized the Corona policy of the Federal Government, is ambitious and wants to be part of the next government. However, right now it’s not even certain if they will manage to overcome the 5% hurdle to secure seats in the Parliament. So, that bit of ambition certainly can’t hurt.

• Lockdowns: It was so nice, we did it twice. Yes, we have a second lockdown prolongation in Germany until the end of January. Infection rates are still high, vaccinations are moving along slowly – but at least quite steadily. And with new vaccines getting EU allowances, there might soon be silver lining. Finally, a bit hope allowed.

• Chancellor – Maybe?: Jens Spahn (Minister of Health) is Armin Laschet’s sidekick – at least in the race for the CDU party leader position. He took the role before Corona, and ever since he’s become a central actor in German politics and among the public. This week, rumors developed that Spahn might be placed as Chancellor candidate by Laschet – given that Laschet is elected party leader. A lot of speculation going on with party leader elections coming up next week.

• Back to Green: With all the home office, Germans would obviously prefer to move a bit more to the rural side of the country again. A survey by industry association Bitkom indicated that every fifth German would relocate to the countryside if he/she would have a home office guarantee. This is truly romantic.

Happy New Year and welcome to Groundhog Day (the movie, not the weather forecast thing)!

While none of us was allowed to celebrate New Year’s Eve like we usually do, with lots of friends,  fireworks and champagne (it was only champagne this year), I got the feeling that most started into 2021 optimistic, motivated, and eager to move on.

After all, after 2020, 2021 can only get better, right?

But now, one week into 2021, I feel a bit like Bill Murray (yes, I know, Groundhog day AGAIN…). We are back in lockdown until end of January (which probably will be extended even further), my kids are back to homeschooling and I can’t play tennis. The days ahead look like an infinite chain of repetitive blurriness with no end in sight.

But, there is evidence that things are moving forward: UK left the EU after all, even Germany started its vaccination campaign AND you got a new President confirmed. And, to round up this list, here come the most exciting news: Thanks to Corona, Germany emitted 42 percent less CO2 in 2020 than 1990, thus fulfilling an already written-off goal of reducing CO2 emissions by 40%.

So that’s gonna be today’s message, looking ahead into 2021: There is always a silver lining.