Guten Morgen!

We wish you a wonderful start into your first weekend with your new President (Congrats, what a ride! Anna can and will elaborate further in WOOM: no such thing over here in Germany) and happy reading with the newest Krautshell edition.

Enjoy and ping us for more!

Anna                                Christian

Turkey and the EU: A Love-Hate Affair

Over the past few months, EU-Turkey relations have incredibly strained, as Turkish President Recep Tayyip Erdogan decided to pick fights with THREE EU Member States at the same time. Let’s give you a quick rundown of recent events: Tensions began rising back in August, when Turkey dispatched a research vessel to map out possible energy drilling sites in disputed Eastern Mediterranean waters, and continued to do so through September and October. That didn’t make Greece and Cyprus very happy. Shortly thereafter, Erdogan suggested French President Emmanuel Macron get a “mental health check-up” after he announced measures to combat radical Islam in France. Then, throw in the fact that Macron and Erdogan supported opposing sides in the Nagorno-Karabakh conflict, and some other disagreements that we won’t go into right now, and voilà, heightened tensions.

That being said, given that the EU is Turkey’s largest trading partner, and that the EU is planning to impose sanctions on Ankara, it’s unsurprising that Erdogan has launched a diplomatic offensive to rebuild relations. When Macron contracted the Coronavirus in December, Erdogan wrote him a letter wishing him well, even addressing him as “Dear Emmanuel.” Furthermore, Turkey also invited EU Council President Charles Michel to Ankara in March and agreed to resume exploratory talks over disputed Mediterranean waters with Greece next week. Crazy how quickly opinions can change when there’s a threat to turn off the economic tap… We’ll keep you updated.

A Lot of Fuss over a Little Bit of (Nord Stream 2) Pipeline

Back in July, we gave you a short update on Nord Stream 2, the underwater gas pipeline from Russia to Germany, and it’s fair to say news around this controversial project have been relatively quiet, until this past week. The slumbering beast was re-awakened after German authorities granted permission for construction to continue on January 15^th, prompting a wide array of reactions from all sorts of actors.

The geopolitical problems kicked off when the US announced plans to impose sanctions on a Russian pipe-laying ship involved with the project, which Germany took note of “with regret.” Not surprising, as Merkel and her government have remained quite resolute in their defense of the project. Then, on Thursday, the European Parliament jumped on board to advocate for scrapping the project following the jailing of Kremlin critic Alexei Navalny upon his return to Russia. And it doesn’t end there. Private actors are also beginning to withdraw their support. Threat of US sanctions caused Norwegian certification company DNV GL to pull out of the project, ceasing all verification activities, and Zurich Insurance Group to fully commit to complying with “any applicable sanctions regulations.” The next step is now for Germany to speak with the new Biden administration, and see if some sort of compromise can be reached to allow the final 150 kilometers (about 93 miles) of pipeline to be built. Stay tuned.

Let’s Talk Politics (And Some Other Stuff)

There were certainly some interesting things happening this week politically. But number one topic here was: Clubhouse. The audio app, in which you can basically do live-podcasting and also interact with the speakers as a listener, is the hottest thing in Germany right now. Some politicians did so many Clubhouse discussions this week we wondered if they didn’t have work, family or anything else going on at all. Still, we were infected by the hype as well and have some thoughts on the new medium.

First of all, yes: there are data protection issues and the fact that the app is invite-only and iPhone-only can be criticized. But let’s look a bit beyond that. All the discussions that usually happen on Twitter between politicians and Russian bots were shifted to Clubhouse this week (without the bots luckily). And, as we like to say, that was really “balm for the soul.” Discussions were actually often productive and all the insults normally used on text-based social media didn’t happen. It seems when we actually speak to one another, we are less tempted to call the other person a “stupid f…”. Nice. Also, tuning in some morning discussion rooms about the political agenda for the day was actually far more interesting than listening to conservative internet radio formats. Whether the app will have long-lasting success we will see. But this week was definitely an interesting experience. Just out of curiosity: if you experienced some similar things across the pond, let us know.

Quantum Computing in Germany: Big Thing or Unambitious?

Germany wants to invest in quantum computing and – if somehow possible – please fast and whenever feasible: even faster. But there are some issues in how the first procurements for development of quantum computers will be set up in 2021. Mainly it’s an issue between the Federal Ministry for Education and Research (BMBF) and the Federal Ministry for Economic Affairs (BMWi). Therefore, an expert commission was established, and this week, it presented its report on how to proceed.

The report basically aims to build up several “quantum computing hubs,” in which different technologies can compete against each other. Essentially, a race to see who can build a quantum computer the fastest. A comment by the Ministry for Economic Affairs was leaked this week which calls the whole approach “unambitious and discouraged”. Ouch! The point of conflict between the two ministries? The BMWi fears the focus is too science-oriented, even though it has SO MUCH economic potential when applied in industry. Furthermore, the BMWi fears it will come with a lot of red tape. Well, while the project itself could turn out to be anything but unambitious and discouraged, we might have to fear that ongoing bureaucratic discussions could really damage the progress of this important technology in Germany. We’ll update you whenever the first procurements are made. We’ll even unravel all the red tape for you.

The Fear of Closed Borders

During the first infection wave in early 2020, the pictures of an EU with closed borders, separating people from their loved ones in neighbor countries, were omnipresent. In summer, everyone was clear: this shall never happen again, doesn’t matter how bad it gets. Nice words are easily forgotten. And while President Biden just halted the construction of the border wall to Mexico (certainly for other reasons), discussions about closing borders are re-emerging in the EU again.

Angela Merkel is probably the human incarnation of cautious and rational crisis management (if there is anything like that) and she doesn’t want closed borders. However, Merkel and other EU governments see Member States with high infection rates that are just about to reopen stores and public life again. They’re asking themselves, “All our cautiousness for months, just for other neighbor countries to bring the virus in again?” EU cooperation is desperately needed right now. Common standards for infection protection need to be implemented to prevent border closure. Even if we manage to uphold freight traffic despite closed borders and establish some special arrangements for families, only one image would prevail: the image of a Europe with closed borders because it failed to cooperate – again. And even though we should have known better. Let us all hope for the best.

Germany’s Vaccination Fiasco

Generally speaking, throughout the COVID-19 pandemic, German Minister of Health Jens Spahn (CDU) has been praised for his respectable handling of a difficult situation. In fact, there’s even been talk of Spahn potentially running for Merkel’s Chancellor seat in the next election due to his growing popularity. However, that popularity is quickly diminishing as the Minister of Health has increasingly come under fire for numerous logistical complications with the Coronavirus vaccine.

It began when Pfizer and BioNTech announced they will temporarily cut shipments of their vaccine to Europe as they are upgrading a production site in Puurs, Belgium. Due to this unforeseen renovation, the German delivery schedule would be impacted for the next three to four weeks. In Hamburg, the allocation of appointments is being halted, and tens of thousands of appointments had to be cancelled. In North-Rhine Westphalia, the state received 100,000 doses less than expected, forcing the state Ministry of Health to impose a halt to the vaccination campaign in hospitals. Spahn is attempting to address the problem head-on, as indicated in a document released by the Ministry of Health which states the German government is “keen” to engage in talks with the US about possibly re-routing some vaccine doses produced in the US towards Europe. Whether or not this disaster can be blamed on Spahn is not for us to decide, but for all of our sakes, we hope no one is planning for more “renovations” in the near future.

• Less Debt – Hurray! This week, the employees in the Federal Ministry of Finance pulled out the calculators and did some number-crunching. Result: the new debt in 2020 was a few billion lower than initially expected. This was mainly due to investments that were not paid out (but might be in 2021). Overall, we still have one result: we amassed quite some debt.

• Traffic Jam Scientist Is Top Advisor: Yes, a “traffic jam scientist” is an actual profession. And it seems to be important right now. We are in lockdown until February, still, the government is already thinking about how relaxation will look like afterwards. Merkel & co are currently being advised by a traffic jam scientist, but not because we fear actual traffic jams (you know we are the relaxed folks lol). Rather, the assumption is that once measures are lifted, people will come together in a way best represented by the formation of a traffic jam. Well, we are certainly keen to learn more.

• Digital Euro: Paying digitally is becoming increasingly more important (as if it hasn’t been for the last 10 years at least). As a result, plans for a “digital Euro” as an addition to bank notes are finally emerging. Still, the EU doesn’t aim to replace banknotes completely, which is good news for conservative German citizens who were already up in arms upon hearing such future scenarios.

What’s next?

This week, I watched the inauguration of Joe Biden; a happy ending to quite an interesting time, a big moment for the USA. But I couldn’t help thinking: While not really fun, the months-long election campaign had a fascination to us outsiders and last Wednesday felt like the season finale of a must-see-show.

As opposed to a favorite sitcom though, no one is really sad that this one came to an end. But still, what’s next? Luckily, in the same week the US sails into calmer waters, Germany gears up for its own election year.

The sensation factor might not be that high, but still, at least there is some excitement in following the Germans as they look for a Mrs. Merkel-successor.

Well, OK, who am I kidding. It’s gonna be as boring as the CDU party congress Christian wrote about last week. From all the candidates, the CDU delegates chose the safest option, the least adventurous, the tried and true one. That’s kind of the German way. Honestly, I don’t expect the campaign or the September elections to be any different.

Still, we will keep you posted. Just in case.