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The global auto industry has capacity for producing 92 million vehicles in 2009, but only 60 million cars will be sold next year, according to CSM Worldwide. And CSM forecasts capacity utilizations will not return to the 2007 rate of 80% till 2014. And because of their better product mix, more new models, and better fuel efficiency, the Japanese, Korean and European carmakers have a better capacity utilization than the Detroit Big Three, even though they are also hurting badly as credit collapses and and an overextended American buyer is wary of new purchases. Robinet, the head of global vehicle forecasting at CSM Worldwide, estimates that the Big Three Detroit automakers will only need half their current production capacity in 2009, something he says is not sustainable for any industry. If these estimates hold true then there is a major earth shaking experience ahead for Detroit automakers that is not reflected in the attitudes and the bargaining about who benefits and who concedes what from unions, management, workers, bondholders, dealers and suppliers, even after the near miss for the bridge loans. It is a situation in which even globally and among the strongest automakers like Toyota and Honda there is going to be a lot of misery in 2009 and beyond. Only some automakers around the world will survive this shakeout. ...

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The election of Merz in Germany as chancellor means a sharing of minds with Macron of France, the two leaders share the same approach, coming 3 years after the inertia under chancellor Scholz. It means the steps will be taken for European defense and for a European alternative to NATO. It also means efforts will be made for the French-German economic engine to be revived. 

UK's prime minister Starmer also supports this effort for a united Europe to tackle defense and economic challenges in 2025. Leyen, head of the European Union is also a member of CDU party of Merz and led the defense ministry under Merkel.

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What it takes to put a CDU/SPD coalition government in Germany- 16 working groups, 250 negotiators, 10 work days. And that is only the first step. It then goes to party leaders talking with their working groups. Taxes and migration policy are 2 key hurdles. Lars Kingbeil on the Social Democrat side, Carsten Linnemann on the Christian Democrat side with to be chancellor Merz. Both sides say some friction, dissent is normal after an election in which the CDU barely crossed 29% and the SPD made it only to 16% of the vote. Both sides see each other as indispensable. CDU feels SPD is sticking to its positions. Migration- SPD's Carl Stegner says- "The SPD will not engage in a contest to treat as badly as possible those who have come to Germany and have done nothing wrong." The CDU wants to give only "bed, bread and soap," to rejected asylum seekers. It sees its promises in the election as real when it made clear statements to stop migration and cut benefits, with its credibility at stake. CDU also believes that like DJT in the USA this tough policy is certain to make such migration unattractive. The other difference is on Taxes- the SPD wants to see higher taxes on the well off. ...

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Merkel's leadership as Germany goes through the economic crisis. There is not much enthusiasm for further reforms among the Social Democrats or the Christian Democrats. Other than raising the retirement age to 67, the mood is not for any changes in that direction. The economy will contract by 6.1% but Merkel's decision is not to go in for a big stimulus under pressure from the US, and instead stay with the status quo combined with help to workers for unemployment benefits and for retention of workers by companies. As elections approach Merkel is considered favorably, and according to a recent poll by Forschungsgruppe Wahlen nearly 60% are satisfied with the grand coalition of the CDU and the SPD, 78% think Ms Merkel has done well as chancellor, and 58% want her to remain on the job. Actually Merkel's popularity is behind the CDU's prospects, the CDU itself is popular among only 35% of voters. Her analytical habits from her training as a physicist show in the way she is governing, which is thoughtful, and connects well with voters. Merkel benefits from the reduction in unemployment. Unemployment fell from around nearly 5 million in 2005 to around 3 million in 2008. The risk is that Merkel's popularity may be affected by an increase in unemployment to 5.1 million from the averaage of 3.3 million in 2008, according to an OECD estimate. Merkel stands behind a German response to the crisis which is to support the priciples of a social-market economy, make unemployment as least painful as possible to the jobless, to keep every job that can be saved in the nonfinancial sector with a 115 billion euro "Germany fund" providing guarantees and credits to companies that are in trouble because of the credit crisis. Stimulus packages of 64 billion euros supported the auto industry with subsidies to car buyers, and subsidies to keep workers intheir jobs. The idea was to come up with a German version of the response to the crisis by balancing the need to respond based on German conditions, and the concerns for inflation and the budget deficit, that is shared by most Germans. THe vision offered by Merkel is that of a physicist daughter of a protestant minister in East Germany, who is low on the rhetoric and good on substance, and willing to make decisions based on careful study and discernment rather than ideology, without sharp swings in any direction. Her vision comes from her days as environment minister, which is quietly pushing Germany into the forefront of countries developing renewable energy, moving ahead in energy efficiency, with anational goal of cutting emissions by 40% by 2020. The other areas are immigration and education, both key to the future of Germany because of the huge demographic change happening there. She has afamily minister Ursula von der Leyden, who introduced "parents pay", a14 month stipend for parents of newborn children linked to salaries, and to to improve daycare by providing places for 35% of children aged three or less by 2013. And Merkel has approved 18 billion euros of additional funding for research and universities. Says Leyden Merkel has made "daycare" an acceptable term in the CDU, and made Germans accept that they are an immigration country. Which tells you that you have to look closely to find the reasons for Merkel's popularity, which does not carry the rhetoric of an Obama, but is just as effective in German conditions. There are deepseated demographic changes going on in German society, which require a cultural change, and change in mindset, such as that for daycare, immigration, and blending the best of the old in the social market economy with the new like the changes in the educational system. The Economist says that in big cities today nearly half of the children under 15 are immigrants or their children and grandchildren, who are more likely to be poorer, unemployed and with less education. ...

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Germany's increased borrowing and tax breaks for business to increase growth- Germany's version of DJT's US Tax Cuts Bill.

Chancellor Merz and Finance Minister Klingbeil of the two main parties CDU and SPD have put forward this bill to increase growth and productivity, with increased investment from business and government. The debt brake in the German constitution was taken out for increased borrowing.

Merz told the German parliament-

“None of us is doing this lightly. We know that this will place a considerable burden on future budgets, including interest obligations in future budgets. But the alternative — doing nothing, not enabling investment, especially from the private sector in Germany — is not a better option.”

Germany like the US is taking an approach of investing for growth to chart a new future.

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The SPD continues to say it will not join in another grand coalition with the CDU after the FPD party pulls out of negotiations. A minority government has not been tested before in Germany and is unlikely with immigration and Brexit posing large challenges. A Jamaica coalition is being tried so called because of the colors in that country's flag, to include FDP and Greens. The SPD opinion is expressed by its deputy leader Schafer-Gumbel, who said :"the SPD is not the spare wheel for Mrs. Merkel's skidding car." For years the SPD played a secondary role in CDU governments under Merkel and eroded its worker base support in elections.

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German chancellor Merkel wins the CDU election for party leader at the party convention in Hannover. The convention was held in Lower Saxony to give a boost to the election prospects of the CDU governor of the state, David McAllister. The CDU has 39% support in the polls and the 40% mark will be needed to form another coalition with the FDP, because of the sharp decline in the FDP's popularity. Merkel's personal popularity is high, with 58% favoring Merkel over 38% for the SPD candidate for chancellor, Peer Steinbruck.

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Charlene Chu, Bank analyst of Autonomous Research, is an expert on non-performing loans in China's banking system. Chu's estimate of bad loans in China's banking system is 14% for other commercial loans. For the non-performing loan ratio of the banking system, she says her estimate is closer to 20%. The estimates were given at an event in Hong Kong in September 2015.

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The small size of the German stimulus plan, $12 billion of new spending over 2 years, 0.25% of GDP, even though German budget was close to balance in 2007 and may be in surplus this year. The reservations about spending arise from the feeling in Germany that spending packages in the 1970's produced little stimulus and aded new debt. When people see the new debts and taxes headed up people tend to save more and spend even less says Scheide of the Kiel Institute of the World Economy. And the coalition of CDU and SPD had set 2011 as year to balance the budget, so the prevailing wisdom is that spending packages do not work and the term economic package is unpopular in Germany. So finance minister Peer Steinbruck says the small stimulus package is not of the old style. But as the economy deteriorates and exports slump, aid may be provided to small and midsized companies, and investments in transport and early education, subsidies for energy conservation and help to the car industry.

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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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Voter turnout of 83.5% in federal elections in Germany in Feb 2025 is the highest since reunification in 1990.  The Free Democrats and the Wagenknecht BSW  fail to meet the threshold of 5% for representation in parliament. The CDU manage 28.5% of the vote less than the forecast 30%, and the AfD is at 20.7%. Scholz Social Democrats drop 9% points from 25% in 2021 to 16.5% and the Greens are at 11.7% of the vote. The Left Parties get 8.7%. German broadcaster ARD cites exit polls showing 82% of voters were dissatisfied with the government coalition, 72% of voters dissatisfied with chancellor Scholz, yet the Greens  voters gave it 45% approval.  In terms of seats in the 630 seat Bundestag  Christian Democrats  208 seats Social Democrats.      121  The Greens                  85  Left Party                       64 AfD                               151        The likely outcome is resignation of chancellor Scholz and new leader for Social Democrats. A CDU SPD coalition Merz as chancellor, with Greens/ Left parties and AfD in the Opposition with equal number of seats.                                                                                                        ...

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"You don't have to vote AfD for what you want. There is a democratic alternative to the AfD." Julia Klockner Bundestag president points out that CDU like Mette Frederiksen's Social Democrats in Denmark need to take a stand so that they reflect the views of ordinary people who see Merkel's illegal migration policies hurting social cohesion in Germany. She and chancelor Merz, finance minister Klingbeil of the Social Democrats, have the task of revitalizing all of Germany east and west, after the failed Merkel years. This is important for Germany and the world because of the failure of elites to understand the people and their struggles with cost of living, crime and migration, disinvestment in infrastructure that deepened the feeling of ineffectiveness, and other social trends that have disrupted the basic structure of society by 2025. 

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The German parliament voted overwhelmingly in favor of sending heavy weapons to Ukraine as the Russian invasion continues in eastern and southern Ukraine. The German parliament voted on Thursday, April 28, marking a major shift in policy for Germany with 586 in favor and 100 opposed, and 7 abstaining. Military aid should continue and accelerate wherever possible says the proposal that was passed with the backing of the ruling coalition of Greens, SDP and FDP, and backed by the largest opposition party the Christian Democrats (CDU). The far right AfD opposed the proposal. The proposal also foresees an appeal to China for it to "abandon its acceptance of war" and actively support a truce, says this report in DW.com.

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DJT calls Macron and Starmer "nice guys," but guys who did nothing to end the Ukraine war. He says the effort for a minerals deal with Ukraine was made in the context of Europe making loans to Ukraine and the US having given outright aid and the need for the US to be treated same as the Europeans. 

CDU's candidate for Chancellor in next week's German election says Germany should consider taking a stake in the British and French nuclear arsenal, now that NATO Article 5 may not be honored by the US under DJT. Offers were made by the French for this to happen many years back.

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Climate Reset Berlin, a coalition of climate change action groups, has introduced a referendum that brings forward climate change action goals put off till 2045. The referendum makes 2030 the new target date for 95% reduction in carbon emissions consistent with the 2015 Paris Climate Change Agreement. Berlin is 80% dependent on fossil fuels for energy needs in 2023. Proponents say there is great potential for wind and solar energy. Opponents say that it is too costly and will take up funds now allocated for childcare and education. The outgoing Greens SPD government of Berlin opposes it, as does the new expected CDU government. The Green senator for Berlin supports it, as do other private groups. Buildings need to be renovated and private transport curbed.

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A look at how Germany voted on a map of Germany gives a better idea of what really happened in the 2021 election. The narrow margin of about 2% of Social Democrats over Christian Democrats looks different from the map. The CDU black color region is mostly all of southern Germany, the region includes Bavaria with its capital Munich. And parts of West Germany around Cologne.

In Cologne and Berlin the Greens dominated.

The rest of Germany is all Social Democrats red. Only in parts of the  east in Saxony and Thuringia one finds AfD far right.

Geographically SPD red is all over Germany except for the southern region of Bavaria. A seat Merkel held for 30 years went to the Social Democrats SPD party,

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DW.com report by Mu Ciu shows a CATL(Contemporary Amperex Technology) plant in Arnstadt, Thuringia, in eastern Germany. It will not bridge Germany's technology gap. German and US consultants at the microeconomic level of the company and German and US economists at the macroeconomic level of the economy entirely fail to grasp the effectiveness of China's investment driven model. Of its joint partnering with European and American companies and China's single minded focus on technology access. This is why the DJT US administration has warned Europe that it is failing economically. China's macroeconomic and microeconomic model are run by the same authority by the state, and according to goals and plans (which in a socialist economy is weak at the microeconomic company level lacking the initiative and freedom of action). By combining its macreconomic framework run by the state with a micreconomic company level run by the state but on free market lines the Chinese investment driven model has dual advantages and operates at a speed that far surpasses the German and American model. It's society suffers as a consequence, but in few short decades 1990-2009/2020 this is all it could accomplish with a single focus on modernization for what was once a peasant agricultural economy. Where it lacks is in future technology access and as long as weak companies in the US and Germany partner with Chinese companies the technology access for Chinese companies give it the essential ingredient for its investment model to work, as American and European companies can waver in investment Chinese companies backed by the government will not waver in investment and have the clear advantage. DJT's approach is to give a big shock to the entire system of world trade now run by China, so that this is no longer going to work at the macroeconomic level and legislate huge investment incentives for one time depreciation and other moves to get American companies to invest. It wants Europe to do the same, including getting rid of the bureaucratic structures and regulations. German Chancellor Merz is getting the message and is acting quickly first with the trillion dollar investment plan, the meetings with Draghi and Meloni to get Italy and like minded nations on board, and internal efforts to get rid of regulations and bureaucratic structures, and building a new partnership with India to remove an error of Merkel/ Clinton+ Obama in excessive concentration and dependence on China. This requires a steady hand and steady governments, steady policy, and companies in America, Europe and India to work together for the long haul without wavering or delay, to rebuild the world economy along new lines and on a new path. ...

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This editorial Board opinion piece in the WSJ gives exceptional insights into major issues facing Germany, the cost of electricity generated from renewables, failure to meet climate change emissions targets set by the government, and the difficulty of forming a new coalition government with conflicting goals of the Greens vs the CDU and the FDP.  By one estimate it cost households and business about $125 billion extra in higher electricity bills for 2000-2015 to subsidize renewable energy from solar and wind. Utilities are required to buy renewable at above market rates, especially since the energy revolution called Energiewende was launched by chancellor Merkel in 2010. German electricity prices are about 36 cents per kilowatt hour compared to 13 cents in America. The 2011 decision following the Fukushima disaster to phase out nuclear power by 2022 made the effort to meet renewables targets of 40% by 2020 compared to 1990 -exceeding the 20% for the EU- even harder. Germany sees a 30% target for 2020 as reachable.   Even though renewables can generate 50% of required energy supplies, only 30% of the supplies are utilized as the renewables are generated mostly in the north of the country and there is a lack of transmission lines to bring it to the industrial south. The dirty secret says the WSJ editorial board for the renewable story in Germany is that a lot of coal is used in dirty coal plants to meet electricity needs when wind and solar energy are not available. Cheaper coal not natural gas is preferred for such generation as daytime peak use that recoups more expensive gas cost is managed with renewables. Leading to the situation that Germany generates only 9% of energy from natural gas compared to 30% in the U.S.. The further Germany has gone in renewables has also led to the paradox of increased dependence on coal. Getting to the new Jamaica coalition being planned between the CDU and the FDP and the Greens. The problem is that the Greens want to see the 20 most polluting coal plants closed, the CDU and the FDP are willing to close only ten coal polluting plants. The WSJ's opinion is that voters chose the AfD right wing party with 13% of the vote because of the platform promise to shut down Merkel's Energiewende policy.   ...

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Nancy Faeser, says "this is a strong commitment to a modern Germany." Germany's Interior Minister is pointing to the new dual citizenship law that will enable Americans as well as the many Polish and Turkish people in the country to have dual citizenship. Germany now joins Sweden, Ireland, France and other countries where dual citizenship is allowed. There are economic reasons for this as Germany needs to attract highly skilled immigrants for its labor force. Faeser says Germany will attract the most qualified people in the world only if it can ensure they enjoy full democratic rights in the foreseeable future. The CDU and Merkel for years opposed any changes to the immigration laws. It is the SPD, the Greens and the Free Democrats that are making these changes as Germany looks to the future.

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Ursula Von der Leyen is actually a nickname of the new European Commission president from Germany. Her father was Ernst Albrecht, a top CDU politician and state premier for Lower Saxony. She adopted the name when she switched studies from the University of Gottingen in the late 1970's to study at the London School of Economics and changed her name to avoid the attention of the Red Army faction, a terrorist group at that time. Ursula studied at the European School in Uccle, during a time when her father was atop European civil servant in Brussels. Of her time in London she says: "I lived more than I studied...In 1978 I immersed myself for one year in this seething, international, colorful city. For me coming from the rather monotonousm white Germany, that was fascinating. For me London was the epitome of modernity: freedom, the joy of life, trying everything. This gae me an inner freedom that I have kept till today. And another thing I have kept the realisation that different cultures can get along together very well." She switched to medicine, and married a physician. In 1990 she joined the CDU like her father. She held posts related to the family and work ministries, and Merkel promoted her to defense where she did not do as well as at family related ministries, and then to the head of the European Commission, knowing full well the value of an internationalist with outlook broader than Germany's in the European Union of today. ...

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The first signs of a change in Germany's position to promoting growth in Greece came when German chancellor Angela Merkel told CNBC on May 15, 2012: "I have the will, the determination to keep Greece in the euro zone." She added that if Greece's leaders are looking for "stimulus to be pursued for growth in the euro zone, which we could pursue in the interest of Greece, we're open for this. Germany is open for this." The Social Democrats, SPD opposition leaders have long said that Merkel is able to change positions as the situation changes. Looking back she even disassociated herself from her mentor German chancellor Kohl when he was not willing to disclose the names of donors for illegal donations. This has given her the flexibility that another Christian Democratic party leader Schauble lacked in leading Germany. She has also seen poll numbers favoring the CDU dissipate quickly before the 2005 elections and is aware how quickly situations can change, as is happening now with the public in France, Netherlands, Spain, Portugal, Ireland, Greece, and eastern european EU countries growing weary of strict austerity policies pushed by the CDU. A faction of the CDU pushed for strict austerity policies at the recent CDU convention in Leipzig, Germany. Merkel told the CDU about charges that she had shifted on a number of core issues such as nuclear energy, social issues, minimum wage, and euro zone bailouts- "Our political compass has not changed. The context is changing. This is a time of epic change."...

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Scholz loses a no confidence vote in parliament that he called so that new elections are held in 60 days according to federal German law.  He says it is a fundamental choice that German people need to make between pensions and investments for the future with support for the armed forces vs the policy that doe not plan to invest in the future with a debt brake limiting investment. The Free Democrats opposed SPD and Greens efforts to invest for 4 years. Why did Scholz continue. in this way with FDP CDU's Merz asks directly, was Scholz on another planet.  This has happened three times before- in 1972 when Wily Brandt got support for his Ostpolitik policy of better relations with Soviet Union and GDR and new mandate after planning a no confidence vote for a new election. He won with 46% of the vote and 91% of eligible voters voted. In 2005 Kohl was reelected after a no confidence vote he planned on his government to get a new mandate. Kohl of CDU won. In 2005 Gerhard Schroeder's social and economic reforms affected working class Germans- he called a no confidence vote to get a new mandate. This one Schroeder of SPD lost and it started Angela Merkel of CDU's 16 years in office. ...

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It would be astounding to know that the average age of the CDU Christian Democratic party members and voters is about 60 years. With the aging of society a large portion of German population is older and mostly conservative, seeking to stay with the status quo. This is the support that chancellor Merkel had and her policies reflected this conservatism. Younger voters felt they were being ignored and have chosen to vote for the Greens or the Free Democrats. Even with the Greens the average age of members is about 48 years, for the FDP 51 years. Compared to this South Asian population is much younger.