Guten Morgen!

Regime change week in Germany! As a consequence, today we’re coming at you with a slightly different format (and content). Otherwise, we took a deeper dive into the competition between the EU and China, and Christian reflects on keeping this very moment of transition alive during the changing of the guard in the German government in his WOOM. We wish you a wonderful start into your weekend, and happy reading!

Anna                                Christian

We Have a New Government… and Other Things are Happening as Well

Yes, it’s true. We have a new government and Olaf Scholz became the 9^th Chancellor of the Federal Republic of Germany on Wednesday. He is the fourth member of the Social Democratic Party (SPD) to serve this position and is therefore to be mentioned in one line with Willy Brandt, Helmut Schmidt and Gerhard Schröder. Not too bad for him, most certainly.

Today, obviously, you want to learn about the new government, so let’s focus on this. You will receive many analyses of the new government’s actions in the coming weeks and months in any case. So far, not that much has happened. New Foreign Minister Annalena Baerbock went on her first trip to Paris, then Brussels and then Warsaw. Chancellor Scholz visited France on Friday. Besides that, all old ministers showed the new ministers their new homes and everyone was applauding this wonderful act of democratic change.

Read here or here to find out more about who the people in the new government are. If you want know what the main challenges (at least, in the press’s point of view) are for the new government, click here or here. And lastly, if you want to know how Cem Özdemir, our new Minister of Food and Agriculture, commuted to his designation by the Federal President, please, click here.

As we all are taking the brunt of the new wave of new leaders of the new government, delivering you the full Krautshell experience this week would be futile. Also, yesterday was Erste Lesung’s (that’s our company, transl. “First Reading”) Christmas get-together. Under strict Covid rules (everyone vaccinated AND tested) we sang Christmas carols and had mulled wine, bring together the teams from Brussels and Berlin as well as our colleague from Vienna and our colleague from Hamburg, who is actually writing this article currently (meaning yesterday) and realizes that he needs to finish fast as he otherwise will miss his train to Berlin (f*ck me).

Probably, you will find some pictural impressions of our get-together below. If not, you can be sure that by the time you are reading this, we are all lying in bed with a big headache. At the moment, this reminds me a bit of Schrödinger’s cat experiment. Before this gets any further out of hand, let me say: have a wonderful weekend. You’ll hear from us again next week one more time before Christmas.

Strategic Competitor and Systematic Rival but Still Necessary: What’s up with China?

Last week, we shone a spotlight on the EU’s new initiative to counter China’s Belt & Road Initiative: The Global Gateway. This week, we want to go deeper into the nitty-gritty, looking at the Sino-EU relationship and what China’s race for influence means for the old continent. Let’s dive into it, shall we?

Shift of Tone: from Covert Measures to Overt Bans

It’s no secret that relations between China and the West have deteriorated over the past few years. In the US, that deterioration was acutely accelerated through President Trump, who had no reservations about openly antagonizing President Xi and his administration. This also means that the US administration has few inhibitions about explicitly shutting out Chinese companies, like it did when it banned Chinese-made drones in the US military.

In Europe, the story arc has been somewhat more gradual, as European countries have been incredibly careful to not provoke their largest trading partner. In fact, Europeans have become experts in shutting out Chinese companies without even mentioning the word “China.” Take Germany’s IT Security Act 2.0 from December 2020 for instance. Companies looking to contribute to Germany’s critical infrastructure must be certified by the Federal Office of IT Security. Seems straightforward enough. However, companies must also submit a “declaration of trustworthiness,” to be certified by the Federal Foreign Office and Ministry of the Interior. This extra step all but assures that Chinese companies would not make the cut. Fast forward to present day, and the new German government is taking a different approach. The word “China” appears 11 times in the coalition document, and the traffic light parties have not shied away from phrases like, “Ratification of the EU-China investment agreement in the EU Council cannot take place at present.” Message received.

Competition for Influence: the EU Steps up its Game

All these examples serve the narrative that the EU is now acutely aware of the fact that China is already here (or at least acutely aware of the fact that now is the time to act). The Greek Port of Piraeus is majority Chinese-owned, and countries like Montenegro or Bosnia & Herzegovina are taking loans from China that they surely will not be able to pay back. These developments have caused many European actors to press the panic button, as they see the EU’s influence waning. In the moment, this may be worrying for many Europeans, but in the long run, it may not be such a terrible development. After all, pressure makes diamonds. Let me explain:

The House’s View

Over the past decade, the EU has focused heavily on internal integration in several policy areas, sometimes at the expense of external matters. Countries in the Balkans, Central Asia, and Africa needed money and/or other forms of support, and China was there to fill that gap. Where the EU offered strict measures and guidelines with its support funding, China offered a “no strings attached” alternative. Fast forward to 2021, and we have a competition for influence on our hands. China already has one leg up on the EU, as the Belt & Road Initiative investment volume is roughly 20 times more than the Global Gateway. Therefore, the EU is in an interesting position in which it needs to become creative. Currently, the main selling points seem to be that the loans come with higher environmental standards and more transparent conditions. Sure, green standards are great, but will they be enough to convince Angola to partner with Europe and not China to build a highspeed rail line? Honestly, I’m not sure. Personally, I hope the EU uses this influence-scare to be more daring in innovation. Offer to jointly develop a new type of freight train that runs much more efficiently (and cheaper) than traditional technology, offer to build a quantum computer in the country’s capital. Hell, offer to build a colony on the moon for what it’s worth. What I’m trying to say is: the EU has seemingly lost a bit of its “star appeal,” and therefore needs to compensate in one way or another. There’s a reason why countries like Montenegro or Bosnia & Herzegovina decided to cozy up to China: now it’s on the EU to show those countries why they should come back and work with Brussels.

 Living in the Never

I like this moment when the term of a government ends. For the blink of an eye, the crown-jewel of a man-made political construction ceases to exist and the touch of a horrific void percolates into the fabric of our safe lives. I bet not only the Merkel-fandom but also nearly all of the Scholz-hood fully resonate with this instinctive feeling to cling to the past leader like

But then again, enlightenment kicks in and we can see: There is nothing behind the system but paperwork. It simply wouldn’t exist if not for legitimacy that is based on acceptance, that is supported by power that is supported by loyal forces and so on, as we have all learned in history, law or political science. Fine, maybe some did not.

Sometimes shutting down the political system by detaching ourselves from it plays out well, e.g. when we follow the ideas of Eckardt Tolle’s “Living in the Now”: Don’t think at all, just be aware of your existence without judging anything! Some of you know how right he can be and what a relief it is to free yourself from the everlasting game of a system that was made by others in the first place (For the services that do not cease to tap people in the name of national security: I mean intellectually, as a state of mind). For once, that past week, that system actually went, for good, and the successors don’t quite know what they’re doing yet. This feels like we are all the same again, there is freedom from a ruling culture, like we just escaped from a long-standing routine in a cell where we were only a number without a say next to thousands of other inmates.

At times, I wish the “Now”, neither our existence nor the outside system, would not determine everything. The abdication of Angela Merkel, the fading of all those years of shaping a new political culture for me hasn’t ended, even if her shift did. I would like Germany to remain silent for a bit longer, for that we all have a closer look on what we are letting go. Not having to live in the now yet, without clinging to the past neither, just not yet living the future, that would be great – Goethe phrased it well, this living in the never, when the now was over and the tomorrow wasn’t there yet. He needed to see what he was about to let go and where it all will go, then on 22^nd March 1832, when he passed away with his last words on the deathbed: “Light, more light!”