Guten Morgen! 

With German political tranquility flying around everyone’s ears, the parliamentary summer break hasn’t been much of a break to speak of. All the more reason for your resident Kraut watchers to give you their latest updates on the bubbling Berlin political bubble: Welcome to the first post-summer Krautshell edition! First off, check in on our guest contributor, Dr. Steven E. Sokol, sharing his insights on Olaf Scholz’s leadership during a crisis of historical proportions. Then take a look at our articles below outlining how a German court has its head in the Cloud, the federal government’s ongoing struggle with nuclear energy, and a German tribute to Her Majesty the Queen. Finally, Szilvia, just recently appointed Managing Director of Erste Lesung, adding her own thoughts on last week’s sad news in her first WOOM. 

As always, have a great weekend!

Anna                                Christian

False Alarm: Dark Clouds Clear over Baden-Württemberg   

Time for some groundbreaking news from the most inconspicuous of places you’ve never heard of: the Vergabekammer (Engl. Public Procurement Chamber) in the German state of Baden-Württemberg (BaWü). Basically, this office is a state government watchdog, keeping an eye on whether public entities are following the rules when procuring products or services from private companies. This week, the Karlsruhe Higher Regional Court (city in BaWü) decided that US-owned cloud services could continue to be used, setting a crucial legal precedent in Germany’s ongoing data privacy debate. So, why is this important?  

First: let’s set the scene. Earlier this year, Amazon Web Services (AWS) won the public tender to supply the server for hospitals in BaWü. Channeling their inner Lenny Kravitz, one of the unsuccessful competitors submitted a legal complaint against the decision on the grounds that European data protection law was being breached by using AWS servers. The Vergabekammer decided in favor of the competitor, essentially saying that if an EU-based cloud company has a US parent, the data could still theoretically be accessed in the US. A big no-no in Germany. If this decision were to stand, hyperscalers could kiss their chances of working with German public entities goodbye.   

Dark clouds were circling around the offices of Microsoft, Google, AWS, and co. until Wednesday at 2PM Germany time that is. Riding in on their metaphorical stallions of justice, the judges of the Karlsruhe Higher Regional Court essentially called the Vergabekammer’s decision hogwash. If a contract has been signed that assures a customer their data will remain in Germany, country of origin of a parent company is not a reason to doubt that is actually the case. Going forward, the multi-billion dollar question is whether this decision is echoed by other legal bodies across Germany – and will finally bring some light into this legal gray zone. We’ll keep you updated.

Nuclear Ping-Pong 

If you thought you could get through this week’s edition without another dry energy policy article, we’re sorry. But as any Kraut watcher will tell you, energy is far and away the issue dominating the public imagination, from corporate board rooms to the local dive bar. It’s not hard to see why: Europe’s economic powerhouse remains severely dependent on Russian natural gas, the lack of which now threatens to shut down industry and leave households in the cold this winter. A cause for pragmatism? No way. 

The problem is nuclear energy. While much of Europe is concerned with eking out every last megawatt hour to offset a looming energy crisis, Germany remains on track to shut down its last three nuclear power plants at the end of year. (This is the legacy of former Chancellor Merkel’s Energiewende, embraced by all major political parties as Germany’s path towards carbon neutrality.) But what sounds like a great idea on paper has lost its appeal in a country facing an unprecedented energy shortage, and almost 80 percent of Germans now support extending the nuclear plants’ operational life beyond 2022. Not that this has moved the federal government from its anti-nuclear stance. If anything, Economics Minister Robert Habeck’s latest “compromise” is drawing more attention to his Green Party’s refusal to countenance nuclear energy, and fire from political allies and opponents.  

Habeck’s latest scheme involves retaining two of the three German nuclear plants as an “emergency reserve” (Notfallreserve) in case of urgent need. It seems geared towards appeasing his stridently anti-nuclear political base while carefully addressing oppositional calls for an actual operational extension. It will likely do neither. Green Urgestein (oldtimer) Jürgen Trittin has called for a grassroots party vote on (read: against) the matter, while for the opposition CDU/CSU, Habeck’s move doesn’t cut it. Meanwhile, Germany remains mired in an epic energy crisis, and a solution is not in sight.

Her Royal Highness  

When my phone received the push-up notification that Queen Elizabeth II had died on Thursday, I became clear of some sort of weird feeling. Though I am in my twenties, I obviously had the very absurd expectation that I wouldn’t experience the day on which she dies. Which is of course nonsense. However, given that some of you might be older than me, I could imagine you felt somewhat the same. This format is way too short to write anything that could even nearly dignify all the actions of Queen Elizabeth II. So, we would just like to share a short throwback from the German perspective.  

The Queen visited Germany for the first time in 1965. And it was the first time a royal visited Germany since 1908. Even though many roots of the royals from the current House Windsor as well as the former House Hanover lie in Germany, the relationship was of course “difficult” due to WWI and WWII. Because of that, Queen’s ten-day visit to Germany in ’65, seen as a sign of reconciliation, was of high symbolic relevance. A visit, by the way, which was deeply wanted and made possible by the joint effort of various German top-level politicians. The visit ended with a speech by the Queen in West Berlin in which she praised the citizens for being an inspiration to the free world. These are surely not the only moments we will remember about Queen Elizabeth II. And, of course, all the difficulties and scandals surrounding the royal family shouldn’t be disregarded. But, today, we want to express our sympathy with the people of the United Kingdom and, like probably many other people in the world, we want to pause for a moment and say farewell to one of the greatest personalities in contemporary history.

Source: eGovernment Computing

by Dr. Steven E. Sokol

Words Need to be Backed by Action

Over the summer, the frenetic pace of the news cycle during the spring slowed – but there was no summer lull, or Sommerloch as the Germans like to call it.  

Each week there was a lot to talk about, but the developments that grabbed our attention did not change. At the American Council on Germany, we host a regular Kaffeepause to check in with a Berlin-based journalist on the political mood in Germany. As one might expect, over the past few months our conversations were dominated by the war in Ukraine, rising energy prices and Germany’s overarching energy conundrum (and its impact on your average Joe and businesses), as well as tensions within the governing coalition.  

I was in Germany three times over the summer and had a chance to engage with lots of different people – from senior policy makers in the Ampelkoalition and taxi drivers in Berlin to regular voters in the rural reaches of the Odenwald just north of Heidelberg. For all of them, the core issue was the same: People are concerned about rising energy prices and face the fall with trepidation as temperatures are expected to drop and heating prices to surge. (It is interesting to note that concerns about the Covid-19 pandemic are almost non-existent.) Across the board, there was criticism of Olaf Scholz’s communication style – or lack thereof – and a strong sense that words need to be backed by action. 

Defining speeches  

Olaf Scholz has given some impressive speeches during his tenure as Chancellor – beginning with the Zeitenwende speech in late February shortly after Russia’s renewed incursion into Ukraine. In it he charted a major shift in German foreign, security, and energy policy. Most recently, in late August he gave an hour-long speech in Prague outlining his vision for the future of Europe. He talked about the specific reforms that are necessary before the European Union can become “a Union with 30 or even 36 member states,” including Western Balkan countries, Ukraine, Moldova, and Georgia. He argued that the EU must ditch its unanimity requirement to make key decisions – from foreign policy to taxes – and that both the European Commission and the European Parliament should be streamlined and not continue to grow.   

These two speeches can be seen as bookends for a new leader and a fledgling government six months into the renewed war in Ukraine – but has the rhetoric reached deep into the country? Policy-makers and journalists have followed them, but these speeches do not seem to have reached the electorate, which is more concerned about day-to-day issues like the cost of gasoline and food – and inflation in general.   

What these two speeches have in common is that they both respond to the challenges of Russia’s aggression and also address Germany’s (and Europe’s) energy concerns. In Prague, Scholz called for a “true internal energy market that supplies Europe with hydro-power from the north, wind from the coasts and solar energy from the south.” He even went as far as proposing a “European hydrogen grid connecting producers and consumers.”   

These speeches set lofty goals and an ambitious trajectory for German and European policies in the years ahead.

Actions speak louder than words  

Olaf Scholz will not be judged by what he says but by what he does – and by how he communicates his government’s actions to the general public. Scholz is perceived to be missing from major policy debates. His popularity has been eclipsed by the Foreign Minister Annalena Baerbock and the Minister for Economic Affairs and Climate Action Robert Habeck, both of whom are from the Green Party. They have been more visible – and have demonstrated real pragmatism in addressing the myriad of challenges facing Germany.  

Last week marked the six-month anniversary of Scholz’s Zeitenwende speech. There has been criticism that Germany has not done enough to help Ukraine and that it has not moved quickly enough to introduce sweeping changes. However, it is important to recognize that there have been some positive steps to change the long-standing tenets of German foreign and security policy. For example, the Bundestag voted to approve a change in the Constitution to allow a special fund of one billion euros to invest in modernizing Germany’s Bundeswehr. Germany has delivered weapons to a war zone – although more could be done. And, as reported in the daily Tagesschau, in the month of August the share of Russian gas used by Germany fell below 10 percent for the first time. Half a year ago, it was more than 50 percent.   

Scholz has to address public concerns and stay ahead of discontent. Last Sunday, he announced a third round of relief measures – from expanded housing and transportation benefits to one-time direct aid to seniors and students. He said Germany “will get through this winter” thanks to “timely decisions” taken by the government to shore up energy supplies.”

Bring along public sentiment  

Public support in Germany for helping Ukraine is still at 70 percent according to a poll conducted for ZDF last month. But as we head into the fall and winter – and the days get colder and shorter, and heating and electricity costs rise – this sentiment could shift dramatically. In addition to taking action to fulfill the promises of big speeches, Chancellor Scholz will have to communicate those actions clearly to the public so that even people in the darker reaches of the Odenwald can recognize the importance of those actions. If he fails to do both these things, he could find a Zeitenwende in the governing coalition with Germans preferring new leadership under someone else.

• EU Data Act Timetable: In a move much anticipated by the Brussels political bubble, the European Parliament has released a timetable for the upcoming EU Data Act. According to this document, the EP plenary vote will take place in March 2023. The Data Act aims to create a harmonized EU-wide framework for data sharing.  
• Habeck under Fire: German Economics Minister Robert Habeck was widely ridiculed this week after an unfortunate slip-up on national television. During a talkshow with the well-known host Sandra Maischberger, Habeck repeatedly seemed to not understand that German companies stopping production due to energy costs were facing insolvency. 

• Coca-Cola Stays on Supermarket Shelves: The manufacturer Coca-Cola must once again supply the supermarket chain Edeka with soft drinks. The Hamburg Regional Court ruled that the US group must supply the supermarket chain at the maximum purchase prices contractually agreed in January 2022. Companies and consumers across Germany are currently struggling with high inflation.

Queen beats King 

Somewhat a year ago, Europe lost Mutti; last Thursday Grandma left us. The losses of the European family are defining. Are we ready for a life without the guidance of these women? Was their example, their wisdom and their investment in our education enough to make decent folks of us? Or will Europe behave like an orphan without orientation and act out because of grief?

Queen Elisabeth II was the type of a political figure who was actively working on healing wounds. Crossing borders and building bridges. Bringing nations together. People were listening to her – possibly because she never said more than necessary.

When she visited Hungary – my home country, and no, we never have been part of the commonwealth – back in 1993, my people even noted what she had for lunch. Sometimes good diplomacy is enjoying a cold duck entrée, a goulash soup, then some fried ox with wine somewhere in the Hungarian Puszta.

Isn’t that what we all want our politicians to be like? Well behaved and transparent to every detail in the public matters while keeping their own private lives private and silent?

Not only Brits ask themselves what happens next, now that the rock the nation was built on is gone. Grandma took all her secret recipes on Völkerverständigung* with her to the grave. So now it is up to us to turn our mourning into hope and positive energy, and maybe, just maybe, the Queen’s successor will be able to, if not fill her shoes, then at least follow in her footsteps. 

Long live King Charles III.

*understanding between the people and nations