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Issue #32

Issue #32

Guten Morgen!

Today marks the real start of Germany’s election year, with the CDU electing a new party chair and maybe Merkel’s successor. We talked about the process in several Krautshell editions, find out who made the race in today’s WOOM!

Enjoy and ping us for more!

    

Anna                                Christian

FIRST, SOME SOLID INTEL:

Free Speech, Platforms And A LOT To Discuss

You might have read this week that Chancellor Angela Merkel and French Finance Minister Bruno Le Maire criticized Twitter, Facebook and co for banning Trump from their platforms. They didn’t do that because they are particular fans of Trump’s tweets. They account for the ongoing discussions about the power of social media, and these discussions are tricky ones. In Germany, politicians fear that the decision to ban Trump has potentially critical implications. “Only the state can regulate freedom of speech”, Merkel says and of course she is right.

However, the people arguing that Twitter has a certain kind of “householder’s right” on their platform are also right (not forgetting the people being of the opinion that no one can regulate free speech). The process certainly adds a new dimension to the question of how much power do we want big tech to have? This is being discussed heavily in the EU, with quite a lot of people advocating for the EU Commission’s right to break up big tech companies when they become too dominant to be controlled. The rules were originally meant to quell the power of Amazon or Google Shopping, but will be seen from a new perspective since the decision to cancel Trump’s membership across various platforms. Even people who feel this move was deserved know that they would have a different opinion if Twitter (aka their CEO only) banned for instance Angela Merkel, which they actually can’t because she isn’t tweeting – boss move! As always, we will keep you informed about this important discussion in Europe.

Bom Dia! The Portuguese Have Arrived in Brussels

With the begin of 2021, the Portuguese have taken over the Presidency of the Council of the European Union (the Council) from the Germans. As briefly as I can put it: The Council is one of the three legislative bodies of the EU, charged with amending or approving proposals from the European Commission. Having the Presidency of the Council means you get to coordinate meetings and (somewhat) set the European agenda for the next six months.

And set the agenda they have. First and foremost, the Portuguese are concerned with implementing the new long-term EU budget and recovery fund to bolster the European economy in the wake of the Corona-induced downturn. A key lever in this process will be harnessing the green and digital transitions to create jobs and push innovation. Furthermore, the Portuguese are particularly conscious of the social dimension of these twin transitions: progress should not mean people get left behind. Portugal also wants to take aim at solving other social issues like reforming the European immigration system and combatting disinformation and hate speech. For more information, we’ve taken the liberty of bundling everything you need to know about the Portuguese Presidency in one place: quench your political thirst by checking out our newest version of #THEÜBERSICHT (the overview in English).

Monopolistic Tendencies? Not on Germany’s Watch!

A few weeks ago, we reported on the EU introducing proposals for regulations reigning in the power of big tech – the Digital Markets Act (DMA) and the Digital Services Act (DSA). While the EU still has some deliberating to do before both are enacted, Germany showed some of that good old-fashioned efficiency by approving a reform of national competition law in the Parliament, introducing preventative rules specifically meant to curb the market power of digital platforms.

The updated regulation places significant power into the hands of the German competition authority – the Bundeskartellamt. How much power you ask? Well, the updated law enables the competition office to act proactively to curb uncompetitive practices. Previously, it could only react retroactively after a dominant market position had been abused. This method proved too slow for the digital age, much like the legal appeals process. Lawmakers want to eliminate the potential for long, drawn-out court battles by bringing any appeals relating to competition directly to the Federal Supreme Court (as opposed to going through lower courts first). Is this constitutional? Only time (and probably long, drawn-out court cases) will tell. Germany’s bold foray against Big Tech will surely create some lessons learned for the EU, and likely influence the final versions of the DMA and DSA. Stay tuned for more.

Another One On Brexit – Because We Enjoy It (NOT!)

At least by now, reporting on Brexit feels a bit like a bad TV series, which happened to be exciting in the first two to three seasons and afterwards was just horrible. BUT you continue watching because, well, you don’t even know why anymore. The Brexit-agreement has only been in effect for two weeks, and already the first calls for renegotiation are becoming louder. Currently, British trade associations are calling for a better agreement, as logistics are stuck and some companies have completely paused their EU-GB trade relations due to customs uncertainties. It seems like the whole agreement comes with some uncertainties and complexities many people hadn’t seen coming.

This situation might actually be beneficial for the EU. With the first signs like empty supermarket shelfs in North Ireland or growing dissatisfaction in Scotland, the EU will feel validated in what they have been saying since GB voted for Brexit: “You will regret that”. Unsurprisingly, it didn’t take long for first people to really regret it now that the implications are right in front of their eyes. We don’t want to indicate that the EU might be sadistic, but we also wouldn’t be too optimistic about the EU changing the Brexit agreement just a few weeks after agreement to benefit the United Kingdom. What’s certain is we will have to present you with some more Brexit sequels from time to time – even if we don’t know why anymore.

Mamma Mia! – Italy’s Government Breakup over Corona Recovery

While the Krautshell usually focuses on the week’s top stories from Brussels and Berlin, this week we’re taking you on a little trip South to look at what’s going on in Italy. On Wednesday, Matteo Renzi, leader of the Italia Viva party, pulled his party out of the country’s coalition government, (previously) consisting of the populist 5Star Movement, the Democrats, and Viva Italia.

For weeks, Renzi had criticized Prime Minister Giuseppe Conte’s plans to launch a 222-billion-euro post-Coronavirus recovery plan consisting of grants and loans from the EU’s 750-billion-euro recovery fund. Long story short: lots of complaining about “wasting public money” and “giving free handouts.” Then, on Wednesday, Renzi chose the nuclear option by announcing the resignation of his party’s minsters from the government. And poof! The coalition was gone. While Renzi patted himself on the back and said it “took courage,” other politicians in Italy said his move was incomprehensible given the dire situation with the Coronavirus.

So, what now? Well, there are a few options on the table; Conte could try to replace Viva Italia representatives with members of smaller parties, but the numbers aren’t necessarily there. Otherwise, Conte could try to renegotiate a new government with the same parties, which would most likely lead to Renzi having some of his concerns addressed. That being said, the other coalition partners are not likely to work with Renzi again. Another option, if no agreement can be found, is for Conte to step down and give someone else the chance to form a new government with the same parties. Whatever ends up happening, it needs to happen quickly, as government squabbles won’t support the Italian people during this time of great hardship.

Stuck In Between

Back in the Summer, the EU decided to order vaccines in a joint approach, from different producers, and it ordered more than needed from every producer. Baseball player and manager Yogi Berra once said: “It’s tough to make predictions, especially about the future”, which is true in every kind of meaning. This is why, unfortunately, the Pfizer/BionTech vaccine is now available in the EU but of course not at a scale that would allow everyone to be vaccinated immediately. This takes time. That fact made some people in Germany angry, criticizing Health Minister Jens Spahn (CDU) and the EU for not having ordered more of the Pfizer/BionTech vaccine. In retrospect, the future seems predictable. Still, this was obviously enough pressure to make Spahn agree to ordering another batch from BionTech, this time only for Germany.

Enter the EU Commission: “This side deal is against our agreement to purchase together!” Germany might now face an infringement procedure. It’s not great press for Germany to coordinate the EU joint order in the context of its Council Presidency, promoting unity, and then turn around and panic-order for itself shortly afterwards. We can only wish the politicians resilience, as pressure mounts from both sides. On one hand, you have unhappy Germans because everything is not fast enough, and on the other you have an angry EU Commission that feels Germany has undermined the process. Jens Spahn and his critics should remember another one of Yogi Berra’s gems: “If the world were perfect, it wouldn’t be.”

LONG STORY SHORT:

  • The Week of Government Dissolutions: Just yesterday (Friday), the entire Dutch government resigned over a child benefits scandal which lasted from 2013 to 2019. Prime Minister Mark Rutte said he had “no direct involvement” and will continue as his party’s leader, and run for a fourth term in the general election in two months.
  • State Election Postponed: It’s a year with loads of elections in Germany. In Thuringia, the state election which was meant to be held in end of April was postponed until September (parallel to the federal election) because of high infection rates. New Corona rule: voter turnout rate should always be higher than infection rate.
  • Postponement week: The state election is not the only thing to get postponed. North Stream 2 is also being paused for a few more days. Construction should have re-started this Friday but are now postponed probably to early February to “check construction material”, which we think is an odd phrase for “further discussing ongoing differences with the USA about this project”. Further developments are not completely clear here.

WHAT’S ON OUR MINDS

By Christian, Founder and MD

BORING!    

Merkel’s party has a new leader: Armin Laschet won with 52%, second round, 521 votes for him, 466 for contender Friedrich Merz. Norbert Röttgen, being a nobody in public’s eye just some months ago, got remarkable 224 votes in the first round. All congratulated each other, everyone’s happy and mature, no “stop the digital vote,” no dead delegates counted twice, no AOC-like “I cannot support the old system…”. Nothing but simple and pure stability. Anna and myself were a bit disappointed* as we always expect a pitch to be like

…because emotionally THIS IS THE END OF MERKEL’S ERA, so….BURN SOMETHING!!!

Looking at the world and the movies it produces, many of us are fervently rallying for everything that promises bold disruption for a post-red-tape, hydrogen-driven, blockchain-organized, emission-free Germany that would blow dictators and pandemics out of the water while we watch Rocky Balboa knock out the bionic Soviet Frankenstein on the final bell or Mario Goetze score a last-minute world-cup winning goal with an amazing shot (..against Argentina, remember? 🙄 Yes, look it up please!).

We know though, when it comes to the serious decisions in politics, we should be called to reason.* Angela did (hence nickname “mum”/“Mutti”) and now Armin Laschet will too. Yes, boring. But maybe leaders have to be the grown-ups, so we can play with our monkeys and remain the kids we are.

*First, Anna was HUGELY disappointed, not a bit, and second, she begs to differ on the reason front.

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