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Germany is going through a second year of slight economic contraction. The newly elected government of chancellor Merz has setup a $1 trillion fund to invest in infrastructure and defense. This will increase the debt to GDP ratio from 62% much lower than other advanced economies to 75%, and could give the German economy a rebound with $500 billion for fixing aging infrastructure. Germany's unemployment rate stands at 6.3% in March 2025. The economy weathered a energy crisis with the cutoff of energy supplies from Russia during the term of chancellor Scholz. Infrastructure, child care, was neglected under Merkel and previous administrations as it was in the US under Clinton, Bush and Obama administrations. The 2009 financial crisis, the eurozone debt crisis and the pandemic, Ukraine crisis from 2009 to 2024 have provided headwinds for action to renew Germany till now. A $1 trillion new fund and removal of the constitutional brake under the newly elected parliamentary majority of the CSU/CDU, the SPD and the Greens is the first step with $500 billion earmarked for fixing aging infrastructure, digitization of the economy, and other investment. The unemployment situation is deteriorating in the auto industry which was poorly managed and is now being hit with US tariffs of 25% on imported cars made by BMW, Mercedes and VW. ...

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Is a Win-Win possible for the US/Israel and Iran possible with the US/Israel strikes and operations started March 1, 2026. Not just for the American and Israeli people, but for the people of the Arab countries and for the people of Iran, and for the people of Russia. Greg Ip in the WSJ, Marc Thiessen in the NYT, and Bret Stephens of the NYT have looked at this in this way and offer an alternative view of what might happen, even though the tendency of the WSJ and the Washington Post is to be skeptical and the NYT with an opposition to all things DJT offering pessimistic version. First, all the anticolonial writings that were read by Khamanei in Moshaad are no longer the case as the US is no longer acting to secure some benefit to itself as the British and French colonial powers did for themselves or their oil companies in pre1960's Iran. Second the US truly wants to learn the lessons of 30 years of troubles in the region at every level of the DJT administration which is to extend a true olive branch to the subdued foe as it did to Germany and Japan under generals Eisenhower and McArthur. Third moderates in Iran could emerge as in Germany ( Adenauer) and in Japan Shigeru Yoshida who worked to adopt the 1947 Japanese Constitution under Gen. Douglas MacArthur. Behind the student protests and now national protests there is a realization in Iran that living perpetually under sanctions is not the way to live, that it can increase oil production, get investment in its industry, and raise standards of living, by doing something different. That nuclear weapons development, supporting movements overseas, perpetual conflicts with Arab states, these things have been tried and are not working. That this is the last chance to build a prosperous Iran before fossil fuels are replaced by renewable energy over 10-15 years and which will make it that much harder to modernize and develop Iran for the benefit of Iran's future 110 million people. The gap with India will only widen as India catches up with China, the way China caught up with Japan. It is better to accept that these anticolonial writings that emerged from decolonizing Arab North Africa applied to the British and the French, and that the world is a different place today as the Indians and the Chinese have realized modernizing ancient societies with ancient religions is possible with the help of the Americans and the Europeans, working with the Americans and the Europeans. Theodore Roosevelt says in his Autobiography that one should be careful to judge people as the best have some negative aspects and the worst have some positive aspects, an experience he described in his dealings with progressives and those who opposed changes. Adenauer and Yoshida had contacts and dealings with earlier governments defeated in the war, but wanted to search for an entirely different path for rebuilding their countries having learned from experience. A thoughtful moderate Iranian outcome is possible as happened in Germany and Japan and which is beginning to develop in Venezuela.   ...

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Brinkmauer and Pfister of the German magazine Der Spiegel interview German Chancellor Angela Merkel in September 2017. The interview covers a range of topics from whether Merkel is addicted to power, why she chose to run for a fourth term, revolving door for CDU politicians as lobbyists for the automobile industry, the AfD right wing party, the refugee crisis and the CDU's historic policy of controlled immigration, and whether democracy is losing strength.  In characteristic Merkel fashion the chancellor takes up the idea of her addiction to power by saying she is careful not to let this happen to her by reading critical articles in the press and having her staff bring critical reports. Her discussion with her constituents in her electoral district are also frank and open, more so in 2017. About the idea that Helmut Kohl's fourth term as chancellor being not good for Germany and for the CDU, Merkel responds that she has given it considerable thought. She found that she still has the intellectual curiosity to learn new things, understands that she has much to learn about how the country and the world is changing. This has been decisive in her decision to run.  Merkel believes that someone who has worked in politics should be able to work in private industry following historic practice in Germany. On the government links with the automobile industry Merkel says her approach has been to look at what was best for an industry employing 800,000 people in Germany, yet deplores the diesel emissions cheating at VW. Has democracy lost momentum after the U.S. elections and the refugee crisis? Merkel says democracy is still strong, and that she will do everything to strengthen democracy in Germany and other parts of the world.  Merkel's view is that it is important that there be counterweights in democratic systems. In this way democracy is strong in America, and also in Poland and Hungary. The chancellor cites high voter turnout of 82% in 1998, 79% in 2002, 78% in 2009. Since then she says in 2009 it dropped to 71% and 2013  72%, yet  expects that with the issues in this election people will come out to vote in larger numbers.  For many years Merkel is seen as co-opting the issues of the left parties and the SPD, being careful to move to the centre. Der Spiegel puts this idea forward to the chancellor by asking her if she is the best SPD chancellor Germany ever had.  In her matter of fact style Merkel responds that voters do not think of it this way, simply expect her to her job as best as she can possibly do it.       ...

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Germany is trying not to choose sides in the trade and security disputes between China and the U.S. Yet it owes a lot to the U.S. from the days of the Marshall Plan and U.S. taking on the role of defending Germany after the Berlin Wall. China was then a partner with the Soviet Union in the Cold War.  Today China is Germany's top market for its car industry. Yet the U.S. export market is much larger than China at $119 billion with China's at $96 billion. In Germany 28% of jobs are linked to exports, and in manufacturing this goes up to 56%, according to Germany Ministry of Economic Affairs. Germany supplied much of the factory  equipment from its engineering companies and the infrastructure that powered up the China transformation. A transformation now underway in India.  There are signs of a shift as engineering companies in Germany grew faster in the U.S. than China, increasing by 6-10% a year. India remains a key growth market for Germany over the next 10-15 years as growth in China slows and India accelerates with its younger demographics and investment in infrastructure. Much of the infrastructure in China is built and it is approaching the saturation Japan reached in the 1990's with additional investments adding little in the way of productivity. Longer term Germany has more potential for growth in countries in South and South East Asia  that will need to make huge investments in infrastructure and technology for manufacturing to meet the aspirations of the people there. Other issues related to freedom going back to the Berlin Wall and the rebuilding of Germany after World War II will emerge. German companies are running out of patience says this report in the WSJ with the bureaucratic obstacles, forced technology transfers, subsidies by state model to extinguish competition, and protectionist approach to home markets, even as state funded companies in China put other companies in Europe, Asia and the U.S. at a disadvantage. Germany will need to transition to a shift in its global relations, a process that is only now taking place. Just as with austerity policies in which it has now made the shift from going with the northern European countries (Sweden, Denmark, Netherlands, Finland) to the Southern European (France, Italy, Spain) in favor of common solidarity even at the short term cost of common debt, Germany now is facing the shift for solidarity with the U.S. for its support of Germany from the period of the Berlin Wall in the 1950's, for the U.S. and European solidarity in the face of the post-coronavirus world. The U.S. showing its generosity and openness to Germany and war torn Europe even as it took on the added responsibilities for creating a new alliance with Europe.   ...

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An exceptional account by Melissa Eddy of how Germans are reacting to the German government's underinvestment in childcare centers. Germany's cabinet approved a bill that provides $190 monthly child care allowance for mothers who opt not to use day care centers provided by the government. This is supported by the Bavarian party, Christian Social Union, on the grounds that it gives an alternative to mothers to use private day care or nanny care. In practice many of the mothers using the allowance are expected to be lower paid workers who may decide not to work. The government has budgeted $500 million for the allowance for 2013. This is opposed by all opposition parties , and in a rare show of unity by business employer associations and unions, both say it "creates a false incentive to quit work." Axel Plunnecke of the Cologne Institute for Economic Research, says studies show low income families are among those who benefit most from early childhood education. About 100,000 lower qualified and lower paid workers could see this as attractive and quit working. The western part of Germany lacks enough child day care slots, so this is seen as not investing enough where its most needed, and Germany lags behind other countries like France in day care centers. The government is investing $15 million over five years to expand the number of child care centers. The goal is to have 750,000 child care slots by 2013, according to Ms. Kristina Schroeder, the family minister, herself a mother giving birth while in office. The measure was vigorously debated and controversial from the beginning because most many Germans see the $15 million years over 5 years as underinvestment in vital educational infrastructure. The $500 million is better invested in building modern day care facilities, they believe, especially because the children from lower income mothers not benefitting from daycare facilities will still need educational help, and German industry needs more women in the labor force to be competitive. Five years ago under reforms of parental support the 3 years of help to mothers was reduced to 1 year, resulting in an increase in the numbers of women working from 32% in 2002 to 40% by 2011, according to the Ministry of Family Affairs, Senior Citizens, Women and Youth....

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Alan Blinder talks about the benefits of alarge cash for clunkers program and how it could be designed around what parameters and upon which it could be broadened or narrowed. One thing he points out is that it would help the economically challenged, though how these low income people would go out and buy new cars in the midst of deep recession and credit card bills, and other debt, is a question. The German customers were not in the debt situation many lower income Americans are. The alternative approach would be to broaden the program to give the middle class the benefits, and design it around giving a boost to the depressed auto industry and the midwest region. Such a program would need adequate financing like the $20 billion, Blinder says, and would include the possibility of turning in an old clunker for a Malibu or Impala or a Focus. Only focussing on small cars would not give much of a boost to Detroit car makers, which are focussed more on the middle and larger ends of the product line. From the cleaner environment perspective and carbon emissions perspective, the cars that are 13 years or older account for 25% of the miles driven, but 75% of the pollution from cars. This and reducing dependence on foreign oil suggest that the benefits of a well designed program or a combination of programs targeting different goals such as environment, boosting the Detroit car makers, and so on , could be well worth an investment of more than the $20 billion, Blinder suggests. ...

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The head of the CDU party who would become chancellor after Merkel, makes an emotional plea to the British people to change their mind and remain in the European Union. In an affectionate letter to The Times of London many leading figures from politics, industry and the arts in Germany made a plea that Britain remain in the EU "from the bottom of their hearts." A look at dozens of letters in response to this article in The Times shows that many Britons feel that Britain would have voted to remain if Germany and Merkel had given prime minister Cameron a better response during negotiations in 2016. Even chancellor Merkel warned Germans not to take an indifferent or complacent attitude to Britain's staying in the EU. The letter makes amends by saying there is an indissoluble bond between Britain and Germany because of the help given by Britain to rebuild Germany after the war. "Without your great nation this nation would not be what it is today, defined by freedom and prosperity," the letter says. It says "should Britain wish to leave the EU it will always have friends in Germany and Europe. But Britons should equally know that know choice is irreversible. Our door will always remain open: Europe is home."  Katarina Barley, Germany's Justice Minister whose father is British, says she supports a second referendum on Brexit. The letter is signed by Andrea Nahles, head of the Social Democrats, Annalena Baerbock head of the Greens party. Also signing it are the heads of Daimler, Airbus and the German Federation of Industry. Annegret Karrenbauer, head of the CDU says it is looking for constructive proposals from Britain, now that the deal put forward in the British parliament was defeated by a large margin. "We will not block the path to Britain remaining in the EU." The letter is significant in that it changes the whole tone of German leaders across the spectrum towards Britain- as critical to the idea of Europe, and the dawning in German minds that Europe would never be Europe without Britain, would never be Europe simply with France and Germany and the other nations. ...

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The concerns that China was going to overtake the US and become the largest economy is a misconception of how countries have developed through industry and technology. Britain and the other countries of Europe, Germany and France, went through rapid development in the 1930's and 1960's then at some point after saturation were relatively stagnant. China for the first time in 250 years of the Industrial revolution began to develop rapidly and urbanize in the 1990's. China is at that same point of saturation and it's economy moving to relative stagnation with 4% annual growth in 2026-2030 and 2-3% annual growth beyond to 2047. India is taking place of China as parts of India (large states of Uttar Pradesh, Bihar, Maharashtra with population 500 million) can achieve 15-22% annual growth in 2026-2030. A quick idea of this can be seen here in the WSJ. China as a percentage of the global economy was 18.5% in 2021 and has since declined to 16.5% of the global economy in 2025. China was three fourth of the US economy when it peaked in 2021 and has since declined in 2025 to two thirds of the size of the US economy. As a percentage of the global economy China will go down to 12% over the next 5 years as India advances, and the population of US, Canada, Australia with their continental spaces continues to grow and with it GDP growth. This is validated from the Japanese experience of peaking at becoming 18% of the world economy by 1996 and then dropping by 2006 to about 11%, 2016 to 6% and 2025 to 4%. The combined effect is to reduce the size of China's economy as a percentage of the overall global economy at a point of time in the future 2030, 2040, 2050. Japan is a good example. There are other factors in play including technology and capital access as technology and capital shifts to other parts of the world where it can be better deployed and conditions are suited for rapid development as in India/Indonesia and in the US/Canada/Australia regions of 1.6 billion people and 450 million people from China (saturation overbuilding), the Middle East (wars and mismanagement). ...

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German industry is finally accepting the government's shift out of cheap Russian energy. Robert Habeck Economy Minister proposed a plan for putting a cap on domestic heating and a gas incentivizing scheme for industry. Under the scheme industrial customers who reduce gas consumption get paid by the government. The head of the Federation of German Industries Siegfried Russwurm, says every kilowatt hour counts, we need to reduce gas consumption as much as possible." The use of coal is temporary, the renewable energy goals are more urgent than ever and phase out of coal by 2030 will still take place says VDMA,  the German mechanical Engineering association.

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This WSJ editorial cites French president Macron on the provisions in the Biden Inflation Reduction Act that favor Make in the USA and how it affects foreign automobile manufacturers. WSJ also says the actions taken by Japanese, Chinese, Canadian and German governments favor their domestic industries. For decades Make in the USA was neglected hurting American workers, American communities, and creating serious even dangerous (for democracy) social gaps in society. The Biden administration is following a Make in the USA policy that is now being followed by the EU and Germany of bringing supply chains closer or back to home ground after the pandemic showed the serious shortcomings of shipping American or European manufacturing overseas. After the hollowing out of Detroit over two decades Detroit now gets a chance to come back with the rebuilding of the car industry in the renewables age.

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The European Union plans to rebuild its solar panel industry by manufacturing in the home country. This means shifting away from supply channels where China controls 80% of production. Chancellor Merkel failed to see the risks of letting German companies be decimated by China's subsidy program supporting solar panel makers in China. A system of customs duties failed when China threatened to retaliate with duties on German car exports. In the end Germany like the US under president Obama and Trump after 2010 failed to support domestic solar panel makers.  Now subsidies are accepted way of competing with China for both the US and the EU. The US under the Biden administration is fully committed to compete with China by developing its own solar panel manufacturing industry with the kind of help China is giving to its own solar panel makers. The EU is following the same path. From 200 gigawatts in 2023 the EU's target is 600 gigawatts from solar by 2030. The 400 gigawatts will come from through a policy of make at home in the EU, including raw materials, polysilicon, wafers, and assembly. Subsidies are now the way the US and the EU plan to get back what they lost to China, their critical manufacturing advantage through errors in policy. The European Commission is also changing the rules to accomodate the move. A story of one more critical advantage surrendered through the orthodoxy of free markets without policymakers understanding what they were doing. ...

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A Berlin based think tank, German Institute for Economic Research, says Germany could end its dependence on energy imports by winter of 2022. That is much sooner than mid-2024 as Economy Minister Habeck has stated.The issue has serious urgency as the war continues in April in Ukraine entering a new and more dangerous phase in the east. And every day oil and gas imports by European Union gives Russia $16 million for coal, $434 million for natural gas, and $489 million for oil, a total of close to $1 billion every day.  With new missile attacks on civilian buildings this is one way for European Union to shoulder some of the burden that it has not done so far. DIW think tank says this could be done with decreased industry and household consumption that could generate about 18-26% savings of the demand for Russian natural gas, suggesting that households turn down thermostats and use less warm water, and industry turn to alternative fuels such as coal and biomass. Another saving is from increased supplies from Norway and the Netherlands of liquefied natural gas (LNG). Increased supplies from Norway alone says DIW could cover 20% of current annual imports of gas from Russia. Instead of waiting to build new infrastructure, the new LNG terminals on the coast which face long construction times and eventually falling demand for natural gas which make them financially untenable, the best approach is to use existing infrastructure in LNG terminals in the Netherlands, Belgium and France to increase volume in EU pipelines. Such action would cover 25% of demand for Russian natural gas. Other action is get more efficient use of the European pipeline system to increase German gas imports from Algeria, Libya and other North African nations vis southern EU nations. ...

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The latest Commerzbank estimates show Germany and Japan, both with large capital goods industry, showing declining GDP of about 7% in 2009. That is a steep decline stemming from the lower demand in industrializing countries like China, India and other countries. The German government has only committed so far 88 billion euros ($120 billion) or 3.5% of GDP. To get some idea what the German government is thinking look at the GDP numbers from the government, which show only a 2.25% decline. Compare this with other estimates closer to Commerzbank's estimate- BNP Paribas shows 5.4% contraction, Deutsche Bank 5%, German think tank DIW 4-5% drop. And the government estimate scheduled date for revision is April 29. This may explain the gap between what the Obama administration is saying to the Europeans: you need further stimulus, and what the Chancellor Merkel is saying: we will be just fine. The French government is saying saying the same thing the German government is saying. But France with a smaller export industry is expected to see a drop of less than 4%, the USA 4%, by Commerzbank estimates. Experts say as German elections approach in September, Merkel is going to have to respond with larger stimulus amid large job losses. And sentiment may be shifting in France as job losses mount, as evidenced by large turnout across France calling on the government to help in recent demonstrations....

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Which European port is at the center of Europe's wind energy project. Answer: Esbjerg, Denmark. On May 18, 2022 the heads of state of Denmark, Germany, Netherlands, and Belgium came together to sign the Declaration of Esbjerg. Together the countries want to increase wind energy production in the North Sea to 65 gigawatts (GW) by 2030 and rising to 150 GW by 2050. Esbjerg is one of the few ports in Europe and the key port serving the offshore wind industry. Industry leaders Vestas and Siemens Gamesa ship wind turbines from here, and Orsted provides spare parts that weigh several tons.  German ports such as Bremerhaven lack the infrastructure and it is tied up in disputes ending up in court. Dutch port of Eemshaven is much smaller. The harbor was recently expanded in Esbjerg by 0.5 million square metres to 4.5 million square metres or 45 million square feet. Environment groups are also part of this and there is no dissent in the planning. Here are some useful facts on wind power- Environment cost is 70 times less than that of coal fired power according to Germany's Federal Environment Agency. Within 3  to 11 months wind turbines generate the energy required to build them. No CO2 is produced in the electricity generation process but they do alter the landscape. The future of wind power giants is in the sea where the wind is reliable and strong. One such modern turbine can have an output of 10 to 15 thousand kilowatts to provide electricity for 40,000 people. Pioneers in wind energy are Denmark and Germany. Denmark gets 50% of its energy from wind power, for Germany this is 25%. Jobs are generated installing and operating these wind energy turbines. 1.3 million people are employed in it today. With additional wind propulsion energy consumption of freighters carrying most of the world's freight would be reduced by 30%. Wind and photovoltaic solar can combine for providing most of India's energy because of its sea coastline and having a lot of sun. To get an idea of what is doable in India - in Germany 41% of electricity demand is met from renewables mostly solar and wind. German farmers get 25% of their income from solar energy. Where Germany lags is in use of renewables for transport which falls to about 9% and for heating and cooling where it is about 18%, and it is making great strides to correct this. A big change is technology and how people use transport (more train than airline or automobiles), which will change the entire picture of how energy is created and used in the future. Energiewende the  term for this change is only beginning to take place with urgency in Germany in 2022. India needs to work closely with Denmark and Germany to stay in front of these developments.   ...

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How quickly things can change - Italy is now growing faster than Germany or France. The construction industry is booming with energy efficient home renovation. The superbonus 110 is a payment by the Italian government for energy efficient housing improvements. The government pays 65% of the cost to homeowners making better energy efficient renovations plus 10%. As introduced by the Five Star movement government it was 100% plus additional 10%. Giorgia Meloni's government lowered it to 65% from 75% in 2023. This has boosted the construction industry in Italy and revived Italy's growth where it is growing faster than France and Germany. Germany is seeing about 0.3% growth compared to 0.7% predicted by OECD for Italy in 2024. Giorgia Meloni the new Italian prime minister, after Mario Draghi a central banking official, has continued Draghi's policies and provided a measure of stability and leadership to the government.  Much of the capital comes from the $216 billion or $200 billion euros that will be given to Italy from the COVID Recovery Fund. Italy is the largest recipient. ...

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This report from Germany in DW.com says Germany tried to build a softer relationship with Russia during the leadership of Adenauer of CDU and  Brandt of SPD. This continued under Schmidt and Schroeder. Under Merkel of CDU the emotional aspect of the relationship as Russia retreated from Bolshevism and Soviet Union collapsed was lost. Little attention was paid to East Germany and to how the fall of the Soviet Union had affected Russia negatively,and became purely focused on German industry and trade with cheap Russian gas supplies. Even as Germany did not invest in shared burden for defense with the US, and Germany under Merkel increased dependence on Russian gas supplies to 55% with the Nordstream gas pipeline from Russia, and shut down nuclear energy.  As a result the emotional or mental health aspect of the relationship with Russia of Germany was lost under Merkel. The focus on purely financial aspect of things has been proved wrong both for the economy as physical infrastructure was neglected under Merkel and social infrastructure such as child care and other social aspects of society were sorely neglected. A new broader framework that needs to be built will have to keep this in mind.  All the hard work and good intentions of the Adenauer and Brandt years has been lost with the short sighted basis of relations based purely on finance and trade under Merkel's leadership. This happened also in the US relationship with China with the relations based purely on finance and trade under Clinton, Bush, Obama proving to be too fragile as they did not protect other social aspects within the two countries as inequality widened and whole segments of society were neglected.  ...

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Germany stands out as an outlier in the percentage of cars imported into the US and not made in the USA- for VW this is 80% and for Mercedes 63%. Only Hyundai falls into this category with 65 percent and it announced a $21 billion plan for investment in the US including a $6.5 billion steel plant in Louisiana. All other foreign companies import about half or less of their sales into the US. VW and Mercedes could follow Hyundai in making the shift to making in the US. Honda makes 65% of its cars and Ford 80% in the USA. Peter Navarro, senior Trade adviser to DJT says-"foreign trade cheaters" countries  such as Germany and Japan, South Korea have turned America's manufacturing sector into a "lower wage assembly operation for foreign parts." Not said is that the Clinton, Bush and Obama administrations, the "smart" economists at Ivy League universities, and America's finance sector looked the other way as this destroyed industry after industry and American manufacturing, destroying America's foundations, its broad middle class.     ...

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Germany is well known for its auto industry and machinery industries. It lags well behind other countries in its investment in internet infrastructure. Germany ranks 33rd worldwide in average monthly fixed broadband connection speeds, and 47th in mobile, according to Speedtest Global Index. The U.S. ranks No. 7 in fixed broadband and 37th in mobile. To get a sense of how far behind the U.S. and Germany are in mobile infrastructure and in average monthly mobile connection speeds consider Croatia is No. 9 and Canada is No. 3, Australia No. 4 in mobile. Consider in fixed broadband Romania is No. 4 and Hungary No. 10. What happened? In Germany strict fiscal rules prevented investment in infrastructure without considering how much good essential infrastructure can add to economic growth. There was a decade of disinvestment under Merkel in the country's infrastructure. Consider that Germany relies on copper for rather than glass fiber for linking end users to the fixed line network. Deutsche Telekom laced a strategy for investing in a new network in the last decade when early on in the decade Telecom companies inFrance ad Portugal were rolling out new all fiber networks in keeping with a 2010 European Union report that recommended EU countries invest in fiber. So that today after a decade of disinvestment in essential infrastructure Germany is finally waking up to the fact that its development is uneven at best and lopsided for certain with production facilities in cars and other machinery but failure to invest in the technology that drives machines and cars. Even the updating excuse given by Deutsche Telkom of vectoring or reducing interference sounds strange a decade ago as stated in this report, using the same cooper connections simply reducing noise, a failure of singular proportions to modernize. As a result some of the fastest connections are now in Singapore, Hong Kong, South Korea in Asia or countries such as Norway, Netherlands, Switzerland in Europe. ...

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The 2022 industrial trade fair in Hanover, Hanover Messe, is covered here in DW.com with 2500 exhibitors showing how they are responding to a changed world after the pandemic and the Russian invasion of Ukraine with support from China. Export oriented companies have to rethink their strategy says Thilo Brodtmann, the executive director of the German Engineering Federation, Supply chain disruptions and the pandemic have led to many German companies reexamining their reliance on Chinese suppliers. Human rights and democracy are now part of the reorienting of business in a new direction. The war in Ukraine is also having an impact. Reducing CO2 emissions is also a major part of the reexamination. Chancellor Scholz told the Hanover Fair at the opening ceremony -"We need to bring along with us emerging and developing countries, whose demographics and economic dynamics are turning them into new centers of power." Brodtmann says the solution is "to become independent and to have a completely different value chain." The head of the German Associaltion of Electrical and Electronics Industry Wolfgang Weber says "I'm quite sure that German companies are ready to invest in any of these countries in Asia, Latin America, and Africa to diversify their supply chains." However such new markets are not very well represented at the Hanover Fair, so that policymakers and German business have a lot of work to do to open up new markets across the world in Asia, Latin America and Africa. India, Indonesia and Vietnam are considered to offer good prospects for diversifying Germany's supply chain and a lot of work needs to be done. ...

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The VW emissions scandal lingers on five years after the rigging of of millions of diesel vehicles to cheat emissions tests. Now former CEO Martin Winterkorn is ordered to face trial on charges of defrauding customers. It is interesting to note how it all started was a grandiose ambition set by Winterkorn according to this report in the WSJ, to make VW the largest auto company in the world ahead of Toyota and General Motors and push sales of diesel vehicles in the U.S. with "clean diesel vehicles." At this time of pandemic it is appropriate to note that the world has changed since 1946 when the wages of top managers were 2 times that of a Caterpillar company worker, and reached level of 400 times a worker for some executives of companies before the pandemic.  Even in supposedly egalitarian countries where worker representatives are on boards such as Germany, the wages had pushed way upwards to about 170 times the salary of the average worker at VW in 2015 when the emissions crisis erupted. This VW episode shows that the grandiose ambitions of executives were another part of the problem before the pandemic. Today the VW disaster has led to a completely opposite result. Diesel is not taking over the U.S. it is now the now the no go in Germany, as diesel vehicles are being phased out. Instead Germany's auto industry is now making large investments in the electric car industry. Significantly chancellor Merkel and the CDU no longer see the automobile industry in Germany as having some kind of special status and the shift to electric is being made with the planned loss of jobs and a restructuring to replace lost jobs with other jobs over 10 years. And the SPD has called for a legal ratio of the average ratio of a company's top managers  in relation to a workers wage at the same company. The pandemic has put things in perspective on a number of fronts, from wage relationships, health, healthcare and wellbeing, healthy lifestyles, mental health, making clear that health and a commonsense idea of fairness, good infrastructure, and sensible wage relations all go together in this world that the creator made. ...

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The average age of readers is 59 years and 75% are male for the Wall Street Journal. WSJ has about 3.4 million digital subscriptions. Emma Tucker, editor in chief of the Wall Street Journal says, she doesn't want the Wall Street Journal to become the German car industry of news publishing. She is pushing for changes to bring younger and more diverse readers to the WSJ. Emma Tucker was deputy editor of The Times of London and Editor of The Sunday Times in 2020. Her new role requires managing 1200 journalists compared to 120 in earlier work. Audience data is part of her way of responding to new changes.

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Landers and Gale of the WSJ show how undersupplied conscript soldiers, high inflation and industrial breakdowns during wartime have led to major upheavals in Russia. Three conflicts led to such changes in Russia's domestic situation. The Russo-Japanese war in 1905 led to Russia seeing one fourth of 340,000 Russian troops killed in a battle near the Chinese city of Shenyang, and loss of most of its Baltic fleet in a Japanese attack on Port Arthur. The war ended with a peace treaty arranged by president Theodore Roosevelt of the United States. The Russian czar gave up most of his absolute powers in 1905.  In 1914 Ukraine was involved in regime change as the Germans fought to take Ukraine. The czar wanted to keep Russia's expansive sphere of influence. Without Ukraine's agriculture and industry and its population Russia would not be a great power, says an expert on Czarist Russia. At the time the Russian military was ill prepared in motorized vehicles and communications equipment, and industry lacked the ability to resupply the military. Inflation jumped leading to unrest and protests. Fighting in the First World War led to millions of refugees. In 2022 experts see the same old problem of seeking spheres of influence leading to wars, and the lack of sufficient ability to cope with prolonged wars when short wars were expected by the regimes in power in Russia. Dissent inside Russia and protests led to the abdication of Czar Nicholas in March 2017, and Bolsheviks led by Lenin seizing power in November of 2017. By 1979 Ukrainian leader Leonid Brezhnev was leader of the Soviet Union as Russia's economy could not keep up with modernization. Seeking spheres of influence Brezhnev pushed into a long war in Afghanistan in the mistaken idea that a quick strike on Kabul with a change in government would achieve Soviet goals in central Asia. By 1989 the Russian army withdrew from Afghanistan and in 1990 the protests led to the fall of the Berlin Wall and the collapse of the Soviet Union and emergence of Russia as a separate country. Landers and Gale of the WSJ see these events in Russian history showing how wars have led to domestic changes and upheavals in Russia when leaders projected power beyond Russia's capacity to handle the results of conflict. Russia's economy is about the size of Italy or Britain say experts and its industry much smaller than the European Union economies and the US, Japan combined.  ...

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SDP candidate Olaf Scholz is seen as the most convincing of the candidates, and ahead of the Green's Baerbock and CDU's Laschet in a poll following the 90 minute television debate on German television. Scholz maintained an unperturbed demeanor as he responded to an attack from Laschet on a money laundering investigation being conducted on the finance ministry. He said Scholz was presenting a misleading picture because it was centered on the possibly illegal activities of a single employee in Cologne. He added that he had increased the financial oversight at the ministry since he took over in 2018. Looking at the problems facing German industry, and the challenges from climate change facing Germany,  Scholz had this to say on the scale of the effort needed in renewable energy- "We have 250 years of economic and industrial history behind us, based on coal, gas, and oil. And if we are to change that now that means we have to do an awful lot, for it to really work." The SPD goes into the election at this point with a six point lead over CDU. SPD at 26% vs CDU at 20%, Greens at 15%, in the INSA poll. The election debate on television continues to give SPD and Scholz the confidence needed to stay ahead. Unlike the period facing Merkel Germany after the pandemic faces challenges in social, safety net, child care, climate change, and foreign policy that require new thinking and ability to tackle new frontiers. ...

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Cars that will be seen at the Frankfurt auto show show the direction the industry is taking. Fuel saving technologies, hybrid engines for cars by BMW and Porsche better know for gas guzzling high performance engines. With environmental consciousness high in Europe the pressures to reduce auto emissions are building up in Germany and the rest of the EU. BMW will show concept car that has the higher ride of a sport utility and the hybrid engine running on gasoline and electricity. BMW is trying to change its image to become more in line with the environmental friendly that the German public requires. Mercedes Benz will show its new fuel saving technology and Prorsche will show a hybrid version of its Cayenne SUV. The other focus in Europe on coming up with smaller cars for sale in Asia and elsewhere, and for light driving in Europe. VW is coming up with a city car concept that cand be sold in Asia and also in Europe, it has a rear engine similiar to the VW Beetle and would come in different body styles that can be built for regional preferences but built off a single platform which is cost efficent to turn out....

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This is huge- for Germany, for France, and for the European Union. After initial hesitation and a decade of not looking ahead, Germany under Angela Merkel is finally not just looking ahead to its vision for Germany but doing this as a part of the larger European community. And the European Central Bank after its initial lack of community spirit, is paving the way with its own actions for the Europe wide recovery with a significant increase in lending to EU countries.  Germany's finance ministry has agreed to spend 130 billion euros on more than 50 initiatives to promote growth in Germany. No longer is the government looking at the car industry as it did in the past. It is looking beyond to what Merkel calls the "profound upheaval" coming from climate change and digitisation. For Merkel after the changes caused by the pandemic something more had to be done- "We just could'nt introduce a traditional stimulus package. It had to be done with an eye to the future, so that is what we especially emphasized."  This also brings together France's Macron and Germany's Merkel in a combined effort to bring Europe up to face the future with confidence. It is amazing how the pandemic has changed minds in Europe. From the long drawn out period since 2008 when traditional policy ideas and austerity thinking prevailed, to the idea today that this is no way to face the future with confidence for Europe to be back on its own feet, for hope to return. Instead of partnering in austerity with the Dutch and the Swedes, the finance ministry is now looking to France, Italy and Spain, considering the common pain of the core European countries during the pandemic and looking to the future.  Merkel moved to circumvent the traditional Bundestag's refusal to permit debt sharing  across the euro area by producing 500 billion euros of grants for hard hit businesses across the European Union. As Macron says it was a necessary  step- " What is sure is that this 500 billion euros will not be repaid by the beneficiaries.... We are proposing to do real transfers (of money) ... that's a major step." Forecasts from Capital Economics and other forecasters show the European Union's major economies of France, Italy and Germany rebounding quickly in 2021 after the blow in 2020, in a V shaped recovery with growth of close to 6% in France, and higher in Italy because of the bigger hit taken there than Germany. The strong U.S. jobs report with addition of 2.5 million jobs for May shows that the rebound can be sharp upward swing if the policy, will and community spirit is summoned up by leaders and people, no matter what happened in the past decade. It is also based on having the right spirit that knows about investing where it really counts for the people - in infrastructure, health, public services, and avoiding the misallocation of resources and spending that happened before. ...