Guten Morgen!

We wish you a wonderful start into your weekend and week with the newest Krautshell edition.

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Anna                                Christian

To Gig or not to Gig? That is the Question…

If you’re in the US, you’re most likely familiar with the ongoing debate about the legal status of gig economy workers, such as Uber or Lyft drivers. Just recently, California led the way by passing Prop 22, essentially creating an in-between state for gig workers: they are still considered independent contractors, but enjoy certain benefits like guaranteed state minimum wage. This debate is only reaching Europe’s shores now, as the Commission launched its first-stage consultation on the rights of platform workers, and the gig economy companies are gearing up for a difficult battle with the typically more labor-protection-friendly European governments.

Currently, around 24 million Europeans have provided services for platforms at least once, and 3 million people in the EU work in the gig economy as their main job. Much like in the US, Uber is calling for a “third way,” in Europe: guaranteeing workers certain benefits but still giving them significant freedoms. Jobs Commissioner Nicolas Schmit is open to feedback from both sides, stating, “there is not white and black or there is not just one-size-fits-all.” Courts in Spain and the UK have already ruled that platform workers are employees, as they bear the same responsibilities but currently enjoy none of the benefits. This might be a canary in the coal mine for how the Commission decides. If there is no agreement reached between platforms and those working for them during the consultation, the Commission will begin drafting legislation. Meaning, this probably won’t be the last time we report on the topic – stay tuned.

(Next) Corruption Scandal in Germany’s Bundestag

Quite a few months ago, we reported about the case of Philipp Amthor, a young politician for the CDU/CSU faction who lobbied for the dubious US company Augustus Intelligence. Afterwards, there was a big discussion and, finally, a first draft law for a lobbying transparency register on national level was presented. This time, the scandal might be even bigger, and this time it’s about corruption. Dr. Georg Nüßlein (CDU/CSU), who has been in the Bundestag since 2002 and well-respected among his peers and voters, has allegedly promoted a certain mask-supplying company in March 2020. The company concluded a deal with the Bavarian state government and, a few days afterwards, wired a provision of roughly €600k to another company in which Nüßlein is a shareholder. As if that wasn’t bad enough, Nüßlein’s company did not even pay taxes on these €600k. The prosecution authority of Nüßlein’s home region started its investigations and the responsible committee of the Bundestag rescinded Nüßlein’s immunity privileges.

These are the scandals no party wants to read about in the newspapers, especially not in an election year and most certainly not if the last misconduct was also attributed to one of your party’s parliamentarians. You might remember that in Amthor’s case, his age and lack of experience were sufficient as an excuse for some people – an argument Nüßlein can’t use. He certainly doesn’t hog the spotlight within his own party, but he’s an influential politician who should know better.

Europe First? Europe Second? Disunity on Europe’s Industrial Strategy

Unless you’re particularly observant or very well-connected in the EU bubble, you might have missed that the launch of the EU’s industrial strategy, originally planned by the Commission for the 17^th of March, was pushed back one month to April 27^th. As a quick reminder, the Industrial Strategy, originally introduced in March 2020, is meant to make European businesses more competitive through the digital and green transitions, both (EU) domestically and internationally. Furthermore, the strategy should also help reduce EU external dependencies.

Now for the multi-billion-dollar question: why the delay? Member States are at odds about how protectionist the EU should be in bolstering its industry. In one corner are Germany, France, and Internal Market Commissioner Thierry Breton. A joint paper issued by the two countries outlines their position; the EU should adopt wide-ranging measures to strengthen European industry like looser subsidy rules and adapted merger rules to allow for the formation of champions. In the opposing corner: the Nordic countries, the Netherlands, and EU Trade Commissioner Valdis Dombrovskis. They believe the EU must stay true to its commitment to free and open trade, as this is where the bloc’s strength lies. With the UK, the traditional advocate for free trade, gone from the EU, the smaller countries worry industrial policy decisions will only serve to benefit the EU giants France and Germany. Will the strategy launched be pushed back further? Which side will win the battle? Will there be a compromise? We’ll keep you updated.

Digital Policy in Times of Social-Ecological Change

Digitalization is great. And so is environment protection. Yeah! – Sometimes you might get the feeling that these two narratives are the biggest influence in German, EU and also US policy. However, coming up with concrete issues where both areas can be combined are not that prominent. Svenja Schulze (SPD), Federal Minister for the Environment, wants to change that with a research project conducted by the Wuppertal Institute for Climate, Environment and Energy and the Berlin Institute for Future Studies and Technology Assessment. With at least €3 million in government funding over three years, the project will focus on the role and power of digital technologies in social and ecological change.

Various politicians in Germany want “digitalization” and “climate protection” to be more than just nice words. Therefore, the new project will tackle supply chain design, digital sovereignty, resilience and the development of the German innovation mechanism, thereby combining the expertise of both aforementioned institutes. The institutes are tasked with figuring out how digital policy should function in these areas to enable industry solutions for current societal issues. The central question here is whether a state-based central set up with clear rules and laws or a decentralized, more market-based approach will lead to success in innovations and environmental protection. We are excited to see if this project leads to more than just another few nice words.

Dear Mr. Finance Minister, Another Billion Euros, Please!

In Germany, we have a financial protection mechanism in our constitution that limits the amount of debt the government is allowed to amass and that comes with the beautiful name “Schuldenbremse” (debt brake). It is designed to prevent a high state deficit. The debt brake is the holy grail of budgetary policies for the CDU/CSU and any attempts to change the constitution in that regard are heavily condemned by conservative politicians. In emergency situations (imagine a global pandemic), however, the debt brake can be TEMPORARILY disabled to stimulate economic recovery.

Normally, CDU/CSU parliamentarians protect the debt brake against other parties like Fluffy, the three-headed dog from Harry Potter who protected the Philosopher’s Stone. Ironically though, they turn a blind eye when their own ministers in the government hand in the future cash requirements in an amount so high that the debt brake will be “paused” again in 2022. Germany will be in the red in 2021, and probably also in 2022 and the years after. In the meantime, Finance Minister Scholz of the SPD, a party that would actually favor an amendment to the debt brake, has to now defend it and grant explicit permission for each additional budget item for the coming years. Hurray!

Vaccine Task Force to the Rescue!

When the Coronavirus pandemic and its resulting shutdowns and restrictions began, the fragility of global supply chains were very publicly exposed. While some of the shortages led to a series of memes (such as with toilet paper… we still don’t really get that one), other shortages were significantly less humorous.

Of course, we’re talking about supply problems in the medical sector, which caused massive shortages in critical medicines and therapeutics throughout Europe. To ensure these sort of supply shortages cannot occur again, especially during this critical vaccination phase, the German government has decided to form a “Vaccine Production Task Force.” The new entity, which reports to a group of state secretaries from the Ministries of the Economy, Health, and Education & Research, is meant to actively monitor the entire value chain for vaccine production all the way from the raw materials to the byproducts. Should there be supply bottlenecks, the Task force will take active countermeasures together with the companies involved in the various stages of vaccine production. Apart from ensuring vaccine supply to the German population, the Task Force’s long-term goal is also to secure Germany’s position as a research and production location for the development of new vaccines, both for COVID and other diseases. We’re glad to see the formation of this Task Force, and sincerely hope it can contribute to cleaning up the current mess that is the German vaccination campaign.

• Public Transport: We love our public transport in Germany, but our states, which operate the public transport, are not willing to pay for it. Or let’s put it this way: they don’t want to foot the bill for losses amassed during the pandemic. This is why the states are demanding another billion from the federal level to soften the blow of the approximately €7 billion in losses. After the federal level had already paid €2.5 billion.

• Digital Corona Passport: Austria’s Chancellor Kurz is demanding a digital Corona passport for everyone “who is vaccinated, had Corona and is thereby immune or can prove a recent negative test.” This shall enhance freedom of travel within the EU again, and is definitely a good idea, which is why it is currently being discussed on the EU level among the heads of governments. It might definitely help us get through the summer.

• Sanctions against Russia: This week, the EU Members States’ Foreign Ministers agreed to impose sanctions on those involved with the arrest, sentencing and persecution of Putin-opposition leader Alexei Navalny. However, many onlookers rolled their eyes when Josep Borrell, the EU’s foreign policy chief, pulled his punches in the accompanying statement by saying Russia was “drifting towards an authoritarian state.” Seems it’s been “drifting” for quite some time now…

Rethinking Parliamentary Immunity

When you are a Member of Parliament in Germany, you have immunity from prosecution. Meaning, the police can’t just search your apartment or open an investigation. First, they need to ask the Parliamentary Committee for Election Scrutiny, Immunity and Rules of Procedure to lift the immunity. This happens once in a while, when there is legitimate suspicion of wrongdoing.

And it happened yesterday: The Committee lifted the immunity for Georg Nüßlein MP, who is now being investigated for allegedly having received 650.000 Euros in commission for facilitating face mask orders for by the Ministry of Health. Not only did this violate anti-bribery and anti-corruption laws, but Mr. Nüßlein failed to declare added value taxes on that income.

Now, first thought: Like REALLY???

But then, second: The principle of any constitutional democracy is the presumption of innocence until proven guilty. The idea of immunity for MPs is supposed to protect the functioning of Parliament, but in cases like these, it becomes problematic. Regardless of whether the accused is guilty or not, the mere lifting of the immunity itself seems to imply wrongdoing in the eyes of the public, and leads to a slaughter by media and the general population.

Today, Nüßlein’s lawyers stated that they don’t see any basis for the accusation. Now, I don’t know if that’s true, maybe, probably not, but like in any other investigation or trial, we should let the judicial system do its work before judging. Maybe rethinking parliamentary immunity would be a means to that end.