Guten Morgen!

After all the excitement over the past week, we are looking forward to a quiet and relaxed weekend and wish you the same, of course with the newest Krautshell edition.

Enjoy and ping us for more!

Anna                                Christian

Announcement: “Road to #BTW21”

You got our newsflash this week. Armin Laschet will be the CDU/CSU’s chancellor-candidate and Annalena Baerbock will lead the race for the Greens (see below). Logically, you might now expect an analysis of their political priorities in key areas such as transatlantic- and Chinese relations, industry policy, digitalization, climate and more. You can definitely expect these analyses, but in the spirit of keeping our weekly format of short, digestible, and light, we’ve come up with a new mini-format in this newsletter.   In the upcoming weeks, under the title “Road to #BTW21” (read: Bundestagswahl, which is German for “federal election”) we will present you, step by step, with the political priorities of the most promising candidates/parties. We figured this would be the best way to communicate this crucial content while still leaving some room for our (questionably funny) jokes. That being said, if you need everything NOW, just ping us and we’ll happily provide you with the insights.

Leaking Till You’re Peaking

The process that led to Armin Laschet’s nomination for CDU/CSU chancellor candidate was certainly not beautiful. On Sunday, six top politicians from CDU and CSU met to discuss the matter. Allegedly, the CSU personnel stressed that Markus Söder was the candidate with the better chances. Meanwhile, Armin Laschet essentially responded with: “Don’t care, we are the bigger party, I’m becoming Chancellor-candidate, thanks for coming and goodbye.” Laschet’s confidence certainly caught the CSU personnel off guard, who maybe hoped that the new CDU party leader would be “reasonable” and leave the stage for Söder.

The decision of who to nominate lies exclusively with the CDU (they are the bigger party and can nominate whoever they want, a candidate from the sister party CSU would need the CDU’s complete backing). Therefore, the party’s executive committee convened in the night from Monday to Tuesday. The meeting lasted approximately eight hours and concluded in a vote in favor of Laschet. What was certainly striking was the fact that you could get a live ticker of the debates on the vice chief editor of BILD’s – Germany’s biggest tabloid – Twitter account. Someone was obviously leaking everything that was said to the newspaper, which turned the vice chief editor’s Twitter feed into something like a (near) self-destruction. This was certainly a race.

European Super League: Here Today, Gone Tomorrow

As we hinted at in our edition from a few weeks ago, the European Super League (soccer) made massive headlines across the world this week. On Sunday, a group of 12 top clubs from Spain, Italy, and England announced they would be forming their own elite competition, promising lucrative TV deals and other financial benefits to teams who wanted to join. Then, by Wednesday, all but two teams had pulled out of the venture following massive uproar from fans, the Union of European Football Associations (UEFA), and even prominent politicians like French President Emmanuel Macron and British Prime Minister Boris Johnson. Without these teams, the project fell apart.

While these plans may be derailed, the underlying problems are not going anywhere, anytime soon. Of the 12 teams that signed up for the Super League, only one of them was in the black. For years, these clubs have been spending hundreds of millions of euros on players, massively putting themselves in debt. The pandemic and the resulting empty stadiums further accentuated the problem, and now they’re desperately searching for new sources of revenue. The Super League promised to be the holy grail: the project was backed by JPMorgan Chase, which committed to underwriting a 3.25 billion euro “infrastructure grant.” It was also no coincidence that an American bank was the financial muscle behind this project. One-third of the Super League founders (and club owners) are American billionaires. For them, this competition offered the opportunity to generate Superbowl-level excitement (and cash), but it seems they failed to consider how this obviously financially-motivated project would be received by fans. I guess you could call that a breakdown of cross-cultural communication. Now, it’s back to the drawing board for these European football giants as they try to figure out where there could be an extra hundred million euros lying around.

Big Show: The Greens Nominate Annalena Baerbock

Since this Monday, we know that Annalena Baerbock will be chancellor-candidate for the Greens. Together with Robert Habeck, the 40-year-old has been co-leader of the Greens since 2018. This year, she has the chance to gain the best result for the Greens since they started participating in elections. It could even very well be that the Greens become the strongest party this time. Baerbock has been a member of the Bundestag since 2013 and started her political career as a parliamentary assistant in the European Parliament. Together with Robert Habeck, they are certainly the most prominent leader duo the Greens ever had. Baerbock has the public impression of a hardworking, content-focused politician, while her co-leader Habeck is often perceived as somewhat of a philosopher.

The Green party’s nomination process was truly calm and scandal-free. Furthermore, the show in which Baerbock was nominated by her competitor Habeck was certainly a political masterpiece. Habeck, admitting how honored he would have been to become the candidate himself, left the stage and reinforced his support for her. We all know that polls can change. Still, this maneuver brought the Greens quite some sympathy that might last longer than only a week, especially considering the stark contrast with the show the CDU/CSU put on. Annalena Baerbock and her party are the clear winners of this political week. If you want to know more about Baerbock, just ping us. And FYI: you will also learn something about her political priorities in our “Race to #BTW21” format.

Wirecard Investigations: Bags of Cash and Merkel under Fire

It’s time to check in on the ongoing investigation into the Wirecard scandal. This week, the Bundestag special investigatory committee for the affair called in the big shots to testify: Federal Minister of Finance (and SPD chancellor candidate) Olaf Scholz and the chancellor herself, Angela Merkel (CDU). While the two of them remained relatively relaxed, some other, rather shocking details came out of the woodwork throughout the course of hearing. Just as an example, investigations by the Munich police revealed accounts by former Wirecard employees detailing the regular removal of six-digit amounts of banknotes from the office building in Aldi and Lidl plastic bags.

On Thursday, it was Scholz’s turn to face the committee. While admitting that the measures taken by his ministry and subordinate authorities were insufficient to prevent the scandal, he pointed out that much of the criminal activity in question happened before he took office in 2018. The only thing not looking too great for Scholz: he is accused of withholding private, Wirecard-related emails (I guess some problems are truly transatlantic…). On Friday, it was chancellor Merkel’s turn in the hot seat. She was primarily interested in clearing up any controversy around her advocacy on behalf of Wirecard in China. In her opening statement, she said that her government regularly lobbies for the interests of German companies abroad, and Wirecard enjoyed no “special treatment.” She went on to explain that Wirecard was looking to expand into China at that time, and that effort fit Berlin’s strategy of opening up the Chinese financial services sector. Overall, both top-level politicians did a formidable job of absolving themselves of wrongdoing, but as the investigation is currently ongoing, we can’t rule out any possibilities. We’ll keep you posted.

German Vaccination Progress And Some Possible Implications

A bit more than 20% of the Germans are vaccinated now. This means, according to some extrapolations by the government, we could reach herd immunity already by mid-July. The vaccination campaign was maybe one of the biggest “fails” in the German Corona strategy. It started very slowly (we reported), and dissatisfaction was (and maybe still is) rising in Germany. However, it now looks like the campaign may massively pick up the pace in May. Some federal states already decided to lift the prioritization for the AstraZeneca vaccine so everyone who wants it can get vaccinated. Other federal states are likely to follow.

The mismanagement of the pandemic is, besides the nomination of Laschet as chancellor-candidate, one of the driving forces behind the bad results in the public opinion polls for the CDU/CSU. While it currently looks like the Greens could become the strongest party, this dissatisfaction could become less relevant when everyone is vaccinated by summer. In turn, this could change the momentum of all parties. A positive development in this arena will surely be interesting for the battle CDU/CSU vs the Greens. But, don’t forget that the SPD, as the junior partner of the governing coalition, could also get a boost here. Despite not being a classical political topic, the success of the vaccination campaign will be one strong determinant in the election outcome. We’ll keep you posted.

From Clothing to Children’s Book: You Can’t Hide from China

This week, the German government revealed a very clear trend of interference from the outside. To be more precise, the German Federal Ministry of the Interior (BMI) released an internal document (that was now leaked) warning of China’s waxing influence on public opinion in Germany during the Corona pandemic.

The report details a number of cases in which clear evidence of Chinese influence was present, sometimes in the most unlikely of places. Specifically, one example refers to pressure exerted by the Chinese Consulate in Hamburg over… wait for it… a children’s book. In this book about being safe in the pandemic, distributed by the German Carlsen Publishing House, authors wrote that “the virus came from China and spread from there to the whole world.” This language was too aggressive for the Chinese, who threatened Carlsen with criminal charges and demanded a recall of the book, all wrapped together nicely with a public apology. Surprisingly, the German publishing house obliged. For the BMI, this event was particularly worrying as it showed China’s ambitions to exert influence beyond just media reporting, also extending into the cultural sphere. Another strong example of this is something Swedish clothing manufacturer H&M knows all too well: China exerts structural pressure on foreign companies by using market access as what the BMI calls “hybrid leverage.” German companies Hugo Boss & Adidas faced a huge wave of backlash and boycotts from Chinese citizens after speaking out against production in China’s Xinjiang province over allegations of forced labor. The message is clear: present China in a positive manner or face the consequences.

• #closeeverything: Under the hashtag #allesdichtmachen (transl. “close everything”) some German actors spread ironical videos in which they argued for “more lockdown” and “less critical media.” However, for people who lost relatives to COVID-19 it must have been more cynical than ironical. Applause came mainly from right-wingers and somehow it seems these actors have gambled away their project.

• Maas Is Not Convinced: Federal Minister of Foreign Affairs Heiko Maas (SPD) is not convinced by the idea of purchasing 30 million doses of the Russian vaccine Sputnik V. He stressed the fact that it still has no EU approval and also indicated the increasing production capacities for the BioNTech/Pfizer vaccine in Germany.

• Increasing Number of Members: The CSU is only active in Bavaria (in all other federal states we have the CDU). Still, from now on, you can also become member of the CSU if you are non-Bavarian. This campaign seems to be successful. After the decision against Markus Söder, over 1,000 non-Bavarians have already decided to become members in a party they cannot even vote for. An interesting development.

Good Luck

It was worth a newsflash: The CDU (and CSU) appointed a candidate, who will guide the party towards the federal elections and aspires to follow Merkel as Chancellor. 

Except, the polls look bad, the candidate selection process was embarrassing at best, and the result was seemingly driven by power politics and the fear of losing face rather than picking the best candidate for the job.

We reported several times over the last weeks, but it was only in the last few days that the democratic competition between two men escalated. In one corner was Markus Söder, Prime Minister of Bavaria, leader of Bavarian’s CSU, the favorite of the CDU/CSU faction in the Bundestag, the favorite of party members, and comfortably leading in every single opinion poll. In the other corner: Armin Laschet, Prime Minister in Northrhine-Westfalia, leader of the CDU Germany, supported, though far from unanimously, by the party leadership.

Above, you read about how information was leaked, about how confidential talks were made public, about how Laschet just did not move a bit. While one has to admire the willpower, I am amazed how the overwhelming support for Söder and the possible subsequent influence on opinion polls and election results didn’t seem to play any role at all.

Tbh, things don’t look too great for the CDU right now: After the whole hassle, they chose to go with the unpopular candidate, while their current biggest rival, the Greens, not only managed to nominate their candidate in a smooth and orderly manner, but also chose a strong one in Annalena Baerbock.

While I usually enjoy the “I told you so”-moment, this time I hope the CDU will be able to recover from the last week(s). On the plus side, it’s still five months to the election…