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Issue #92

Issue #92

Guten Morgen!

Welcome to another edition of the Krautshell! This week, Mats gives you an interesting and original take on last week’s parliamentary elections in France, which saw President Macron lose his governing majority. Next, we have selected articles covering the upcoming G7 Summit in Bavaria (and what a man with a sweet-sounding name has to do with it), the German government’s growing gas woes, and an important regional election in southern Spain which could point the way for next year’s general vote.



Anna                                Christian


G7 Summit in Elmau – No Soft Cookies

On Sunday, the much-awaited G7 summit begins in Elmau, Bavaria. Germany is host and chancellor Olaf Scholz (SPD) is determined to lead Germany and his self-described “progress coalition” into a post-COVID world. Now, everyone is hoping to see the German chancellor’s geopolitical face in Elmau. What can we expect?

To know what Scholz might bring forward in Elmau, it’s worth having a look at one particular person: Jörg Kukies (pronounced “cookies”). Kukies is a former investment banker, was Scholz’s state secretary when the chancellor was still finance minister and is now one of the chancellor’s most important advisors. He takes on the Sherpa role for these summits. As a result, Kukies has flown around the world a lot in recent months to get to know his counterparts in other nations, sound out interests and coordinate positions. In addition to a common position on the war in Ukraine, Kukies had to push one topic in particular: a Climate Club (which is just as cool as it sounds). Germany wants the leading industrialized nations to find common targets for energy efficiency and the expansion of renewable energies. At the same time, everyone should pay similar “penalties” for CO2 emissions. The chancellor hopes to set an example for other countries and show a way to achieve climate neutrality after all. The Climate Club is the hardest piece of work that Kukies has to deliver for his boss – the starting points and needs of the G7 countries are just too far away from each other.

How does Kukies actually like his new job (after all, it pays considerably less than investment banking)? In a recent portrait about him, Kukies expressed confidence. It’s all very demanding, he says, but negotiating with the leading industrialized nations on the path to climate neutrality is impressive for him. Money isn’t everything after all.

The Alert Level Is Not Yet The Emergency Level In The Emergency Plan (Understanding Germany 101 – Gas Edition)

There is something called the “Emergency Gas Plan” in Germany that deals with potential disasters and shortages in the German gas supply. Things really heated up around this emergency plan, of course, since Russia’s attack on Ukraine. The plan has three escalation levels, the first of which was declared by German Economics Minister Habeck (Greens) at the end of March. Habeck called out the second stage, the so-called “alert level,” this week. What does that mean?

Gas storage facilities in Germany are still 58% full, which is even slightly more than this time last year. But since Russia reduced its deliveries through the North-Stream 1 pipeline, we know that we currently cannot fill our storage facilities for the winter. On top of that, there is a regularly scheduled maintenance of the pipeline for 10 days in July, during which no gas will flow to Germany. Some experts even fear that Russia could use this maintenance as an opportunity to stop the gas flow completely. The alert level in the Emergency Gas Plan enables the German government to allow companies to pass on higher prices to consumers due to excess demand – a step that Habeck has so far refrained from taking, but hasn’t explicitly ruled out. In principle, however, it is hoped that the market will still be able to cope with the current challenge. The alert level is also a prerequisite for the German government to bring coal plants back online. Without further action, the government calculates that a gas shortage will occur from February 2023.

Such scenarios must be avoided at all costs. Habeck, in his open and transparent communication style, predicted that if the price jumps become too high in, for example, the chemical industry, which is heavily dependent on gas, a Lehman effect cannot be ruled out. In that case, passing on the prices to private households is actually unavoidable, but even they do not have the means to bear it economically in times of inflation. Habeck is in a tight spot.

Andalusian Troubles for Spain’s PM

Spain’s conservatives have triumphed in this week’s regional elections, signaling a revival after several years in the political doldrums. Andalusia is the country’s largest autonomous community and home to almost a quarter of the population, so political developments have an impact far beyond its borders. The latest is a shift towards the political right with potential consequences for next year’s general elections: the Popular Party (PP) has won an outright majority in the Andalusian parliament in what was previously a socialist stronghold for almost 40 years. Regional PP barón Juan Manuel Moreno can boast a 58-seat majority in the regional legislature, while the socialist PSOE under Juan Espadas received the lowest vote count in its history and support for the liberal-conservative Ciudadanos collapsed. Not only can the conservatives now rule without their previous coalition partner, Ciudadanos, but they can point to two other major electoral victories in the last year alone: in Castile and León, where the PP governs in the nation’s first coalition with the far-right Vox, and in traditionally liberal Madrid under the young and dynamic Isabel Díaz Ayuso. This spells trouble for Spain’s socialist prime minister Pedro Sánchez ahead of next year’s general elections.

What to make of this likely conservative revival? First off, Sánchez appears not to have benefited from his government’s policies during the COVID-19 pandemic, which saw a rigorous vaccination campaign and large-scale spending policies including fuel subsidies. Also, we’ll spare you the details, but the party is shifting away from the Catholic right towards the center. Interestingly, this development has thus far not resulted in any major gains for Vox, the far-right political force in Spain. What it does indicate is a competitive contest for the national elections in 2023, with the PP facing off against Sánchez’s PSOE. We’ll keep you posted.



by Mats

French Parliamentary Elections: Macron all Alone on the Throne

If you’ve been reading the news this past week about French Parliamentary elections, you likely will have heard one message over and over again: President Emmanuel Macron’s Liberal coalition Ensemble (consisting of Macron’s own Rennaissance Party among others) was the big loser. In short, his party only has 245 seats, 44 short of the 289 required for an absolute majority, with the Far Right (Rassemblement Nationale, RN) and Far Left (NUPES) primarily to blame for nabbing the seats. For you policy wonks out there, this election was a perfect specimen of (political) scientific study. What does this hurricane of political change mean for the right? The left? For France? For Europe? Let’s dive in. Shall we?

The Left: Successful, but not Victorious

As we reported last week, far-left firebrand Jean-Luc Mélenchon did what political scientists often say is impossible: he united the left. By bringing the Communists, Greens, and other left-of-center political parties together, Mélenchon’s strategic political alliance (NUPES) was able to pool candidates in each constituency and win a total of 131 seats. This makes them the biggest opposition in the Assemblée Nationale (French Parliament), and while other parties would pat themselves on the back and call it a day, that’s exactly where the problem lies for the left. NUPES was created for a sole purpose: to beat Macron’s alliance in the election. They didn’t achieve their goal. If Israeli politics have taught us anything over the past year or so, it’s that keeping together a broad alliance of varying interests and agendas is nearly impossible, even if you’re in the government. NUPES is in the opposition, and the policy differences between the parties constituting the alliance on everything from renewable energy sources to stances on the EU will surely splinter this progressive union. The only thing the left can hope for at this point is new elections, but even then, it may be too late.

The (Far) Right: Chicken Dinner and Such

From eight to 89 seats, an elevenfold increase: that summarizes how election night went for Marine Le Pen’s RN. This dramatic increase in parliamentary seats comes with some benefits that will all but assure the institutionalization of the far right in the French Parliament and make them a true force to be reckoned with. What has the party gained through this election? First, status as an official parliamentary group. It may sound obvious and sort of strange, but with only eight MPs in the last legislative period, RN operated on the fringes of the parliament. They didn’t have a say in organizational affairs of the Assemblée, were very limited in their speaking time, and didn’t even get office space. Now, the far-right can work under the image of being a serious political party as they can join committees, initiate votes of no confidence, and even back up parliamentary procedures by referring laws to the constitutional court. And trust me, they will use their power to disrupt wherever possible. Second, and probably even more important, this election result has ensured Le Pen’s party’s survival… at least for the years to come. Only two short years ago, RN was millions of euros in debt. Now, the party will receive around 10 million euros a year for the next five years. Even though they have less seats than the left, RN has shown that success is simply a matter of perspective.

The House’s View: The People have Spoken (and Lost)  

Yes, we could sit here and label Macron as the big loser of the elections. Yes, his party won’t be able to push their agenda through the Assemblée as they have over the past five years. Yes, he further cemented his image as being detached from the French public by not really campaigning. And yes, he lost trusted confidantes as some of his top parliamentary operators failed to defend their seats. But ultimately, it’s the French people that lost big time. Overall voter turnout was abysmal at 46%, with only 29% of 18- to 24-year-olds and 36% of low-income households (less than 1,200 euros per month) going to the polls. When the majority of the population chooses to remove itself from the democratic process, no one really wins. Then, there’s the question of passing legislation in parliament. Macron, with his Sun-King-like tendencies, has become accustomed to using his Parliamentary majority to push his agenda without compromise. Now, even the center-right Républicains, who, on paper, don’t differ too greatly from Macron’s views, have made it clear they have no interest in “saving Macron’s political skin.” There is a hefty dose of Schadenfreude in the air at the Assemblée, and the other parties want to see Macron getting a taste of his own medicine. Therefore, you can expect little to move forward in terms of domestic policy. Finally, the French people lose because Macron’s, and therefore France’s, image on the world stage has been taken down a few notches. Say what you will about Macron, but he has managed to present a powerful France to the rest of the world. This electoral failure will weaken Macron’s voice on the world stage, as there will now be serious doubts whether what he says will actually become policy reality. With that, France is in danger of sliding into international irrelevance. And that, as someone who studies history can probably tell you, does not go over too well with the French public. Ultimately, Macron’s success or failure in the next years will be defined by his ability to compromise, and if history is any indication of the future, that will be a very hard pill to swallow for him.


  • Ukraine and Moldova on Board: Ahead of this week’s European Council summit, Ukraine and Moldova have been formally granted EU candidate status. While this anything but guarantees ultimate EU membership, it is an important and politically controversial step amidst the ongoing Ukraine war.
  • Greenpeace Against Bundeswehr F-35s: In a study commissioned by Greenpeace, the organization has warned against the German government’s stated interest in purchasing F-35 fighter jets to replace the Bundeswehr’s current (and old) Tornado aircraft. Greenpeace argues that the F-35 suffers from countless defects, which is somewhat ironic given the Bundeswehr’s reputation for shambolic technical readiness.
  • Greens become Cyberattack Target: A cyberattack on Germany’s Greens party was confirmed by party officials last weekend and there are early indications that the attack might have originated in Russia. Among those targeted were the Foreign Minister Annalena Baerbock and Vice Chancellor Robert Habeck, who have taken a particularly tough stance towards Putin.


By Christian, Founder and MD

A Wonderful Team against the Omen

Ok, quickly, as Anna and I are travelling back from this week’s annual business-retreat in Spain and my head is EMPTY from sleep deprivation (evolution doesn’t stop giving you a reminder to SAVE YOUR RESOURCES after a hang out with team members half your age…).

We assembled our team in a former hotel near Barcelona close to some wildfires the heatwave Anna wrote about last week had instigated. Ideas, company values and a new structure of leadership for the growing firm were discussed day and night. Consequently, the team celebrated its freshly revamped confidence on a wave of awesomeness in a pool – until some pipe burst 🙄 and we had to watch the precious water flowing off leaving that pool EMPTY, TOO.

That same week our Minister of Energy Robert Habeck called out the alert level as our gas storage is too EMPTY. Wait, is that


Facing those elements of human made drain and emptiness in my week makes me fear for the future. But even more, it makes me hope for the younger crowd half my age to not only get “through that winter ahead” (Habeck) but for them to be as wonderful people as ours, to think and celebrate while solving today’s problems for a life FULL of perspectives.