Guten Morgen!

We’re thrilled to have you back for this week’s edition of our everything-you-need-to-know-from-Germany-and-the-EU-weekly. This week we dive into why Finland’s step towards NATO might ruffle some feathers in EU Member States, how the EU is vehemently against child abuse online – and getting significant stink for that, as well as a little preview into this weekend’s elections in Germany’s most populous state. Furthermore, Jonny describes why Olaf Scholz may want to start consulting a doctor (at least Helmut Schmidt would say so), and Christian offers insights on why we seek familiarity in times of uncertainty. Happy reading, and as always, ping us for more!

Anna                                Christian

Finland Looks West

In Germany, a Rattenschwanz (‚rat’s tail‘) describes unwanted consequences you’d rather do without. With Finland pushing for rapid NATO membership along Russia’s northern flank, Vladimir Putin is facing serious rodential issues as the fall-out of his Ukraine debacle continues. On Thursday, Finland’s president and prime minister broke with the country’s 75-year-old tradition of strategic neutrality in favor of full integration into the US-led alliance. So what’s the big deal, you might justifiably ask, considering that picturesque Finland has barely the population of Minnesota and far more saunas than cars (check out this Helsinki Burger King if you don’t believe me). Big deal, actually. Not only did Finland’s previous Paasikivi–Kekkonen doctrine (it’s okay, I can’t say it either) provide a successful blueprint for peaceful coexistence with Russia; Thursday’s departure from it marks a serious escalation in what Putin quite literally considers his back yard, the 800-mile Russian-Finnish border reaching from nearby his home town of Saint Petersburg all the way to the White Sea.

Another aspect of Finland’s strategic realignment deserves a bit more attention than it receives: Why NATO? According to the EU’s Lisbon Treaty (Article 42.7), member states commit to defend each other against armed aggression “by all the means in their power”. The fact that EU member Finland is now opting for the US nuclear umbrella may seem the safer bet, but it does open old wounds about European strategic vulnerability that leaders such as Macron regularly lament. To make matters worse, the UK just signed security agreements with Sweden and Finland – a coincidence, surely, but one designed to tick off continental Europeans in the ongoing Brexit spat. It will be interesting to observe the ramifications for EU security policy going forward.

Fighting Child Sexual Abuse Online: Caught between a Rock and a Hard Place

In the seemingly endless battle between fighting illegal content online and protecting user privacy, this week the European Commission (EC) unequivocally chose a corner. Specifically, the EC unveiled a proposal for a regulation protecting children from online sexual abuse, which made clear the EU will stop at nothing to prevent this type of abuse on the internet. Seems like a logical position to take for an institution tasked with protecting its citizenry, but the way in which the EC suggests platforms should do this has led to significant uproar among privacy advocates and platform providers. Here’s the scoop.

In the less controversial parts of the proposal, the EU mandates the establishment of a new agency to exclusively to deal with child sexual abuse online, app stores and messaging apps to verify users’ age, and the possibility for regulators to block websites with inappropriate material through court orders. Now, the powder keg of the regulation. In short, the proposal would put the onus of not only finding and dealing with explicit child content, but also private conversations in which adults inappropriately connect with children, on digital companies (with hefty penalties for non-compliance). Even if messages are end-to-end encrypted, companies are expected to parse through users’ conversations, scanning for illegal activity. Tech executives banded together to vehemently oppose this measure, stating that it would essentially put an end to privacy in online correspondence. Furthermore, privacy advocates posited criminals are already one step ahead of regulators, using channels that would not be detected by such scans.

It’s blatantly obvious that the current voluntary reporting scheme is ineffective – the volume of child pornography online is steadily increasing and in 2020, about 95% of all reports of child sexual abuse online came from a single company. Now it’s up to the EU institutions and various stakeholders to find an effective solution. Ping us for more information.

Germany’s Largest State Heads to the Polls

A week after the center-right CDU trounced its rivals in the state elections of Schleswig-Holstein, voters head to the polls this Sunday to elect the parliament of North Rhine-Westphalia in what pundits call the “kleine Bundestagswahl” (small federal elections). Home to almost 18 million inhabitants and the traditional heartland of German industry, NRW – as everyone calls it – marks a crucial test for any sitting federal government. Mainly because it’s just too big to ignore. Berlin politicians love to invoke “regional issues” whenever state elections don’t go their way (only to take credit when they do), but Germany’s biggest state precludes that option. In this particular case, the center-left SPD is up against state premier Hendrick Wüst (CDU), who took over when his predecessor Armin Laschet crashed and burned as Kanzlerkandidat against Olaf Scholz. The race looks to be a nail-biter, although tailwind from last week’s vote may give the CDU an edge. At any rate, the Greens will likely be the kingmakers (though they would reject such passé language) as the liberal FDP is facing heavy losses, leaving the governing CDU-FDP coalition potentially without a majority.

As far as broader ramifications are concerned, Scholz is under heavy fire for his (non-)handling of Ukraine military aid and his party’s historically close ties to Russia. A major setback just after historic losses in Schleswig-Holstein last week would further compromise his domestic position. At the same time, Scholz has been hesitant to launch major policy proposals – especially regarding Ukraine – in the run-up to the NRW vote, and it is conceivable that next week will see a move on his part, either to paint over the election result or to ride its wave of positive momentum. Check in again next week to get the latest on the NRW vote, and/or to shame us if our predictions were off.

Source: Deutschland Wählt

Macron and Scholz – The EU’s Marriage of Convenience?

Berlin, and with it the German Chancellor Olaf Scholz, was the destination of the first trip of the re-elected French President Emmanuel Macron. Paris and Berlin – that could be a strong European axis, a driving force of European renewal, a revival or even.. and please allow me this joke… a renaissance of the European idea. If it were up to Emmanuel Macron, it would be. Macron already had many new ideas during his first term in office, but at the same time cut his teeth on Angela Merkel (CDU). Macron philosophized, drew visions. Merkel followed the famous phrase of Germany’s former chancellor Helmut Schmidt: “If you have visions, you should see a doctor.” This could change under Scholz after all.

Vision and Pragmatism

Emmanuel Macron and Olaf Scholz represent opposites. One is the great visionary, the other is a bureaucrat who knows how to operate the levers of power. Macron thrives on his pathos, with Scholz, it doesn’t even seem to be in the dictionary. Nevertheless, these two could renew the EU. A first important impulse for this was set by Emmanuel Macron.

At the moment, a pressing issue is how to deal with states like Ukraine, as well as other ex-Soviet states and the countries of the Western Balkans. All of them would like to be admitted to the EU, preferably immediately for understandable reasons. In some cases, they have already made many promises in return because admission takes a long time. On Europe Day, in Strasbourg in front of the European Parliament, Macron came around the corner with a new proposal: a kind of European Community.

The European Community

What Macron meant exactly is not yet entirely clear. His idea seemed almost improvised to many observers. Apparently, the French president envisions a loose form of cooperation with and closer ties between non-EU members and the bloc. It would allow for closer cooperation in areas such as the economy and defense without the states having to go through the lengthy admission process. Macron knows that solutions are needed quickly and that a several-decade-long admission process will not help Ukraine or other states in the region currently threatened by Russia. In addition, Macron suggested changes to the European treaties to shorten procedures and make many processes less complicated.

Macron had to pitch this (perhaps) spontaneous idea to Olaf Scholz in Berlin a few hours after his speech in Strasbourg. The mechanical Chancellor, often referred to as the Scholz-O-Mat, welcomed Macron’s idea as “interesting,” which may already be considered an extroverted emotion in Scholz’s case. However, the chancellor’s priorities lie elsewhere, at least in part. He fears that Macron’s new proposal is likely to anger above all the states of the Western Balkans, which are EU accession candidates and have therefore been performing all sorts of contortions for many years to comply with strict EU regulations. EU enlargement was never Macron’s desire, so many fear that his new proposal is less of a quick-fix for Ukraine and more of an attempt to avoid more new members by offering them something else. Scholz wants to avoid this impression at all costs.

True Love or Marriage of Convenience?

Basically, the two leaders of the European Union are linked, for better or for worse. One cannot move anything without the other. There was great relief in Berlin when it became clear that Macron had been re-elected. Nevertheless, Scholz and Macron are still at a polite distance from one other. A joint relationship still needs to be established, according to various media reports.

Macron has already experienced with Angela Merkel what it’s like when you have visions yourself, but your counterpart is only in administration mode. As a prudent crisis leader, Merkel only allowed major changes when they were absolutely necessary. Scholz seems to have followed suit. But things could turn out differently. Not only did the Chancellor recently announce the Zeitenwende in domestic politics, but he has already spoken of a Hamilton moment with regard to the EU’s debt-financed Corona rescue package, which he played a key role in negotiating as finance minister. The German Chancellor seems to be discovering the first visions within himself. He and Macron simply need to discuss priorities. Scholz is cautious about the question of amending the EU treaties and the question of quick cooperation instead of long-lasting admission processes. He knows how long treaty changes take, they must be confirmed by all member states and for that they have to be accepted in almost all parliaments of the EU members. Scholz fears this process more than Macron.

The House’s View

Together, Macron and Scholz could be a congenial team. Scholz will never develop the same versions of Europe as Macron. Unlike Angela Merkel, however, Scholz might be open to implementing Macron’s ideas – at least in part. Whereas Macron likes to sometimes provoke the other European leaders, the Chancellor knows how to find consensus.

The EU has experienced many crises in the last ten years. In each case, spontaneous ideas arose that slowly but surely found lasting acceptance. Even though the question of the EU’s existence was always raised, the bloc never broke. Now, however, it is time for the Paris-Berlin axis to close ranks and create a clear European signature, especially in security policy. Macron is pushing Scholz to act. If he gets involved instead of simply rejecting the ideas, he will already be doing more than Angela Merkel. That will please the French President.

• Walkin’ on out: As we’re writing these articles, we’ve been getting tweets that Members of the FDP in the Bundestag Defense Committee have left a hearing at which Chancellor Olaf Scholz (SPD) is fielding questions about Germany’s policy on the war in Ukraine. The FDP members, who are part of Scholz’s governing coalition, explained their move as a response to Scholz “unfortunately not answering a lot of questions” and the exchange “not being constructive.” Not great for unity within the coalition.
• From Bad to…Better? : By now it’s no longer a secret that German Minister of Defense Christine Lambrecht (SPD) is under heavy fire for a series of faux-pas. Normally, at this point you would get calls for her resignation, particularly from opposition parties. However, insider information from the CDU/CSU has told us why this has not been the case: her potential replacement, Siemtje Möller, current Parliamentary State Secretary under Lambrecht, might be too competent for the conservatives’ liking.
• Building up Cyber Defenses: In the new EU cybersecurity directive, critical companies and sectors will be mandated to significantly beef up their cyber defenses and -response plans. The decision comes in the wake of a flurry of cyberattacks on European companies and institutions over the weeks, following the start of the war in Ukraine.

The Moment of Fundamentals

Tomorrow, North-Rhine-Westphalia (NRW) will have their elections. In normal times, elections in NRW are THE indicator for where Germany stands. NRW, where 18 million Germans live, has made and has killed some political careers of federal leaders in the past. However, in this moment, Prime Minister Hendrik Wüst is not so much the focus. All remains stable here. Wüst will win, no real challenger seems near, he may have to add the Greens to the coalition who might take all the votes from the Liberals and more. Further than that: Left-coalition unlikely, no imminent impact on the federal level (yet) to be seen.

It seems like we are doing our best to keep things stable by just going with what fundamentally worked so far.

Just like if it is about the security of Europe (especially with Finland and Sweden having moved forward this week), we are going back to what fundamentally helps in the moment: NATO.  Same for the economy: The party of investing in the visions of the future is over, tech-stocks are going south, people are going back to what fundamentally works for the moment: The Old Economy.

While we humans know that we will have to disrupt everything to not go extinct given the 1.5-degree Celsius cap potentially being reached already in 2025 and given the need for investments in future technologies in all sectors, we are hiding in the now. According to stock analysts, we are now rather invested in what actually works, sells, produces, constructs, transports and actually represents the here and now of our lives. Well, with everything changing all the time, let’s see if the seemingly wholesome retreat to our fundamentals in politics and the economy is a motto for this past week or if there will be more to it.

Until then let us embrace the obvious weekend’s spirit: