BERLIN — As the far-right Alternative for Germany continues to rise — and its radicalism becomes increasingly pronounced — a growing chorus of mainstream politicians is asking whether the best way to stop the party is to try to ban it.
The debate kicked off in earnest after Saskia Esken, the co-chief of the ruling Social Democratic Party (SPD), came out earlier this month in favor of discussing a ban — if only, as she put it, to “shake voters” out of their complacency.
Since then, politicians from across the political spectrum have weighed in on whether a legal effort to ban Alternative for Germany (AfD), while possible under German law, would be tactically smart — or only further fuel the party’s rise.
Like so much of German politics, the conversation is colored by the country’s Nazi past. In a society mindful that Adolf Hitler initially gained strength at the ballot box, with the Nazis winning a plurality of votes in federal elections before seizing power, a growing number of political leaders, particularly on the left, view a prohibition of the AfD — a party they view as a dire threat to Germany’s democracy — as an imperative rooted in historical experience.
Others fear the attempt would backfire by allowing the AfD to depict their mainstream opponents as undermining the democratic will of the German people, desperate to ban a party they can’t beat.
Indeed, the AfD appears to be trying to turn the debate to its tactical advantage.
“Calls for the AfD to be banned are completely absurd and expose the anti-democratic attitude of those making these demands,” said Alice Weidel, co-leader of the party, in a written statement to POLITICO. “The repeated calls for a ban show that the other parties have long since run out of substantive arguments against our political proposals.”
The debate is assuming greater urgency in a key year in which the AfD appears set to do better than ever in June’s European Parliament election as well as in three state elections in eastern Germany in September. The party is currently in second place with 23 percent support in national polls; across all the states of the former East Germany, not including Berlin, the AfD is currently leading in polls.
Calls for a party ban grew louder this week following revelations that AfD members attended a secretive meeting of right-wing extremists where a “master plan” for deporting millions of people, including migrants and “unassimilated citizens,” was discussed. The news sent shockwaves across the country, with many drawing parallels to similar plans made by the Nazis. One of the people reportedly in attendance was Roland Hartwig, a former parliamentarian and now a close personal aide to Weidel, the party’s co-leader.
In a post on X, German Chancellor Olaf Scholz suggested it was a matter for the German judiciary.
“Learning from history is not just lip service,” he said. “Democrats must stand together.”
Many of the AfD’s most extreme leaders operate in eastern Germany, where the party is also the most popular. In two of the three states where the AfD will be competing in state elections next year — Thuringia and Saxony — state-level intelligence authorities have labeled local party branches as “secured extremist” — a designation that strengthens legal arguments for a ban.
Saskia Esken of the ruling Social Democratic Party (SPD) called for a ban on the AfD party to ‘shake’ up complacent voters | Michele Tantussi/Getty Images
Germany’s constitution allows for bans of parties that “seek to undermine or abolish the free democratic basic order” — essentially allowing the state to use anti-democratic means to prevent an authoritarian party from corroding democracy from within.
In reality, the legal hurdle for imposing a ban is very high. Germany’s constitutional court has only done it twice: The Socialist Reich Party, an heir to the Nazi party, was banned in 1952, while the Communist Party of Germany was prohibited in 1956.
More recently, in 2017, the court ruled that a neo-Nazi party known as the National Democratic Party (NPD), while meeting the ideological criteria for a prohibition, was too fringe to ban, as it lacked popular support and therefore the power to endanger German democracy.
Given the AfD’s poll numbers, however, an effort to ban it would pose an entirely different dilemma: How would politicians handle the backlash from the party’s many supporters?
Germany’s postwar democracy has arguably never faced a greater test, and politicians — as well as the public — remain divided over how to respond.
Center-right conservatives, who are leading in national polls, tend to view a ban attempt unfavorably.
“Such sham debates are grist to the AfD’s mill,” Friedrich Merz, the leader of the center-right Christian Democratic Union, told the Münchner Merkur newspaper. In response to Esken, the SPD leader who favors exploring a ban, Merz added: “Does the SPD chairwoman seriously believe that you can simply ban a party that reaches 30 percent in the polls? That’s a frightening suppression of reality.”
For the SPD, the stakes in terms of their political survival are much higher. The party has experienced a sharp decline in its popularity, and in two states in Germany’s east it is dangerously close to falling below the 5 percent hurdle needed to win seats in state parliaments.
Even within the SPD — a party whose history of resistance to the Nazis is a source of great internal pride — there is sharp disagreement over whether a ban is a good idea.
“If we ban a party that we don’t like, but which is still leading in the polls, it will lead to even greater solidarity with it,” Carsten Schneider, a social democrat who serves as federal commissioner for eastern Germany, told the Süddeutsche Zeitung. “And even from people who are not AfD sympathizers or voters, the collateral damage would be very high.”
British Foreign Secretary David Cameron and German Foreign Minister Annalena Baerbock on Sunday called for a “sustainable cease-fire” in the Middle East, lamenting that “too many civilians have been killed” in the Israel-Hamas war.
In a joint article in the Sunday Times, Baerbock and Cameron made clear that: “We do not believe that calling right now for a general and immediate cease-fire, hoping it somehow becomes permanent, is the way forward.”
“We must do all we can to pave the way to a sustainable cease-fire, leading to a sustainable peace,” they said.
The article represents an apparent shift in the stances of both countries on the conflict in Gaza. The British government has called for a “humanitarian pause” in the fighting, but has stopped short of urging a cease-fire. Germany has staunchly defended Israel’s right to defend itself since the attacks by Hamas on October 7.
“Our goal cannot simply be an end to fighting today. It must be peace lasting for days, years, generations,” the two ministers said in their article, stressing that they support “a cease-fire, but only if it is sustainable.”
The international calls for an immediate cease-fire are “an understandable reaction to such intense suffering, and we share the view that this conflict cannot drag on and on,” Baerbock and Cameron wrote. That is why the two governments “supported the recent humanitarian pauses” and are “pushing the diplomatic effort to agree further pauses to get more aid in and more hostages out,” they said.
“Only extremists like Hamas want us stuck in an endless cycle of violence, sacrificing more innocent lives for their fanatical ideology,” the two ministers wrote.
However, “the Israeli government should do more to discriminate sufficiently between terrorists and civilians, ensuring its campaign targets Hamas leaders and operatives,” Cameron and Baerbock said.
“We do not believe that calling right now for a general and immediate cease-fire, hoping it somehow becomes permanent, is the way forward” because “it ignores why Israel is forced to defend itself: Hamas barbarically attacked Israel and still fires rockets to kill Israeli citizens every day,” they said. Baerbock and Cameron prefer “a sustainable cease-fire, leading to a sustainable peace. The sooner it comes, the better — the need is urgent,” they said.
French Foreign Minister Catherine Colonna, meanwhile, on Sunday urged an “immediate and durable” truce in the Gaza Strip. Speaking in Tel Aviv during a meeting with her Israeli counterpart, Eli Cohen, Colonna said that “the truce should lead to a lasting cease-fire with the aim of releasing all hostages and delivering aid to Gaza.”
Germany’s sports minister, Nancy Faeser, has called on the International Olympic Committee to examine “very carefully” the backgrounds of Russian and Belarusian athletes competing in next year’s Olympic Games in Paris.
Faeser’s comments came a day after the IOC, headed by Germany’s Thomas Bach, announced that Russians and Belarusians would be able to compete in Paris as neutrals outside of team events, provided they did not actively support the war against Ukraine.
But Faeser, who is also Germany’s interior minister, said that it was important the IOC examine their backgrounds and exclude any athletes found to support President Vladimir Putin’s war, or have any connection to the Russian government or military.
“The warmonger Putin must under no circumstances use the Olympic Games in Paris for his propaganda,” said Faeser, in a statement sent to POLITICO.
In March, the IOC recommended that international sports could reinstate Russian and Belarusian athletes as individuals, under a neutral banner, as long as they had not supported the war and that they were not under contract with either the army or national security agencies.
According to the IOC, 11 athletes — eight Russians and three Belarusians — have so far qualified for Paris 2024.
Faeser said Russian teams being excluded and flags and symbols banned was “the absolute minimum we could expect from the International Olympic Committee.”
“It would be completely unacceptable for Ukrainian athletes to have to compete against Russians who support the Russian war of aggression against their country,” she added. “Ukraine — and Ukrainian sport — must continue to enjoy the full support and solidarity of world sport.”
BERLIN — German Chancellor Olaf Scholz said Wednesday his ruling coalition would seek to present new budget plans “very quickly” to Parliament, after a constitutional court ruling last week plunged his government and its finances into disarray.
The chancellor is facing mounting criticism that he still hasn’t managed to offer a proposal on how to make up Germany’s yawning budgetary shortfall one week after the bombshell court ruling blew a €60 billion hole in the books.
It’s an accounting mess that now throws into doubt future payments for energy, the green transition of industry and microchip manufacturing.
Crucially, last week’s ruling means not only a delay to next year’s budget — which became evident on Wednesday when a parliament committee postponed a preliminary adoption of spending plans for 2024 — but may also require a supplementary “emergency” budget for this year to deal with the fallout of the court decision.
Speaking at a press conference with Italian Prime Minister Giorgia Meloni in Berlin, Scholz evaded specifics on what happens next, arguing the consequences of the ruling must still “be examined very carefully,” which should now be done “very swiftly and promptly.”
The Social Democratic chancellor argued his three-party coalition, which also includes the Greens and the liberal Free Democratic Party (FDP), was determined to “very quickly” move forward with new budget plans, and “ensure that what we have set out to do — for good cohesion in Germany, for the further development of our welfare state, for the modernization of our economy — can actually be pursued further.”
Still, he did not say where he could make the spending cuts that appear to be needed to make this possible.
Scholz had already sounded upbeat on Tuesday that, despite budget cuts, Germany could still pay subsidies to chipmakers Intel and TSMC for building new plants in eastern Germany.
A key consequence of last week’s ruling is that it will probably limit the ability of German leaders, both at the federal and state level, to use money from a variety of special funds that have been established to circumvent the debt brake. This mechanism restricts the federal deficit to 0.35 percent of GDP, except in times of emergency.
During a budgetary committee hearing on Tuesday, several legal experts argued Scholz’s government would have to present a supplementary “emergency” budget for this year to account for more than €30 billion of expenses for energy subsidies. These subsidies had been financed via a special fund outside the regular budget — a practice that is likely to be unlawful in the light of last week’s ruling.
Controversially, such a decision would probably require the suspension of the debt brake for this year.
Questioned by POLITICO during an event in Berlin on Tuesday evening, German Finance Minister Christian Lindner, who has expressed great pride about upholding the debt brake in the past, evaded making a clear reply on potentially relaxing debt rules for this year.
Lindner also argued the 2024 budget would be “a little less moderate and a little more restrictive.”
German Chancellor Olaf Scholz sought to justify his reluctance to supply Ukraine with Taurus cruise missiles on Thursday by naming constitutional constraints and the risk of an “escalation of the war.”
However, Scholz did announce additional military support for Kyiv in the form of another “Patriot” air defense system “for the winter months” and argued that “this is what is most needed now.”
The chancellor has come under increased pressure from allies like the United Kingdom — but also from within his own ruling coalition — to hand over the German long-distance, high-precision Taurus cruise missiles to Ukraine, especially as the U.K. and France have already supplied Kyiv with their “Storm Shadow” and “Scalp” cruise missiles.
Yet Scholz continues to rule out delivery of the Taurus “for now,” a German official told POLITICO on Wednesday, confirming a report by Bild. And when asked by reporters on Thursday why he does not want to send the cruise missiles, the chancellor argued that such a decision could only be made after “careful consideration.”
“After all, when a war lasts so long, these considerations can’t stop at once,” Scholz said during a press conference on the sidelines of the European Political Community summit in Granada, Spain, adding that his government “must always take into account what the constitution requires of us and what our options for action are.”
He added: “This includes in particular the fact that we must of course ensure that there is no escalation of the war and that Germany does not become part of the conflict. It is also my task as chancellor to ensure that.”
Scholz did not elaborate on what potential constitutional constraints he had in mind, but Bild reported that the chancellor was concerned that for Ukraine to use the Taurus missiles, Berlin would have to deliver geo-data of Russian targets and thereby take a more active role in the war. Scholz is also reportedly worried that Ukraine might use the missiles to hit the Kerch bridge connecting occupied Crimea with Russia.
Yet Christian Mölling, the deputy director of the German Council on Foreign Relations and a renowned security expert, argued on X, formerly Twitter, that Germany would not take an active role in the war once it hands the cruise missiles over to Ukraine, and denounced Scholz’s concerns as “smoke grenades.”
Among the harshest critics of Scholz’s decision is Andreas Schwarz, a defense policy lawmaker from the chancellor’s Social Democratic Party: “History books will find their verdict on our politics today,” Schwarz wrote Wednesday evening on X, adding: “My opinion is and remains clear: Deliver Taurus — immediately!”
Seemingly trying to calm down the growing criticism, Scholz repeatedly emphasized during his press conference on Thursday how “very far-reaching” but also “very effective” was his decision to supply Ukraine with another Patriot air defense system.
Ukrainian President Volodymyr Zelenskyy confirmed the delivery of the Patriot system on X, and wrote: “I’m grateful for Germany’s support in defending our freedom and people.”
In two German state elections that are seen as a bellwether of the national mood, the far-right Alternative for Germany, or AfD, surged while the three parties that make up the country’s federal coalition government suffered significant losses.
Conservative forces won clear victories in both the states of Bavaria and Hesse. In Bavaria, the Christian Social Union (CSU), a sister-party to the center-right Christian Democratic Union (CDU), is projected to win 37 percent of the vote. In Hesse, the CDU is set to win 34.6 percent of the vote.
But the biggest winner of the night was arguably the AfD, a party that has become increasingly extreme since its founding in 2013. The AfD came in second place in Hesse and third place in Bavaria, according to preliminary results, landmark gains for the party.
The AfD’s strong performance outside its traditional bastion in the states of the former East Germany suggests the party has successfully expanded its base of support. This development has already sparked a renewed flurry of soul-searching among leaders of mainstream parties.
“The increased performance of the AfD can only worry every democrat in this country,” Ricarda Lang, a co-leader of the Greens, said on public television. “I would like to see us move away from finger-pointing and for every democratic party to now consider what we can do to make [the election results] look different again in the future.”
In both Bavaria and Hesse, the three parties that make up German Chancellor Olaf Scholz’s ruling coalition — the center-left Social Democrats (SPD), the Greens, and the liberal Free Democrats (FDP) — all saw their support drop. That outcome demonstrated widespread dissatisfaction with the federal government at a time of growing economic and social insecurity.
The German economy has been stuck in an extended rut, precipitated in part by the surge in energy prices that followed Russia’s invasion of Ukraine. A sharp rise in the number of asylum seekers entering Germany this year and a growing shortage of affordable housing has also fueled voter dissatisfaction.
The AfD was clearly able to capitalize on this discontent. Robert Lambrou, the AfD’s parliamentary group leader in Hesse, where the party was projected to win 18.4 percent of the vote, called the party’s performance in the state “breathtaking.” Many people, he added, “feel that a change in policy is needed. We have high inflation, high energy prices, high rents. We have completely unchecked mass immigration. There is a lot to be done here.”
In Bavaria, the AfD was projected to win 14.6 percent of the vote, just behind the Free Voters, a right-wing upstart party that governs in coalition with the CSU in the state. The outcome means that, in both state elections, the AfD outperformed all parties in Germany’s federal ruling coalition, a scenario that would have been hard to imagine some years ago.
Germany’s ruling coalition had already been beset by infighting, particularly between the Greens and the FDP — parties that are in many ways ideological opposites. The poor outcome for the coalition parties may well make the discord worse, as each party seeks to reinforce its base of support.
In Hesse, a former SPD stronghold, the Social Democrats suffered an embarrassing defeat, winning just 15.1 percent of the vote, according to projections. The loss is all the more stinging for the party because its candidate in the state is Scholz’s federal interior minister, Nancy Faeser, who in a speech called the result “very disappointing.”
With such a poor result, many are now speculating on whether Faeser will be able to keep her job as interior minister. Chancellor Scholz is likely to face pressure to make sweeping changes in order to reverse the fortunes of his party and coalition.
The election outcome was particularly disastrous for the FDP, a junior partner in Scholz’s coalition. The party won just three percent of the vote in Bavaria and five percent of the vote in Hesse, according to projections. The party is in danger of crashing out of both state parliaments if it fails to meet the required five-percent hurdle.
For the leaders of Germany’s federal coalition government, the election outcome has already raised loud alarm bells. The only question is whether there’s enough unity within the coalition to turn the tide.
“Of course, we are not deaf and blind,” SPD Secretary-General Kevin Kühnert said on German public television after the initial election results came in. “All of us together in this coalition should recognize the signals.”
The German government on Wednesday stepped back at the last minute from making a legal commitment to meeting NATO’s target of spending 2 percent of GDP on defense on an annual basis, according to Reuters and German newspaper Süddeutsche Zeitung.
A government official told the news agency that a clause pledging to meet the target was deleted at short notice from Finance Minister Christian Lindner’s draft of a new budget financing law, just before the Cabinet passed it to the parliament.
Instead, the government pledges to meet the 2 percent target on average over a five-year period, as already set out in the recently published National Security Strategy.
Annalena Baerbock’s Foreign Office had opposed setting the 2 percent target in law, as desired by the Defense Ministry, Süddeutsche Zeitung reported.
A spokesperson for the government declined to comment to Reuters on the details of the bill.
Following the Russian invasion of Ukraine, Chancellor Olaf Scholz announced the Zeitenwende, a new dawn in Germany’s security policy.
“From now on, we will invest more than 2 percent of the GDP into our defense year after year,” Scholz said in February 2022. He renewed this promise after last month’s NATO summit in Vilnius.
For many years, Germany was criticized by NATO partners, especially the United States, for not sticking to NATO’s requirement on defense spending.
The German government has splashed out almost €55,000 on former German Chancellor Angela Merkel’s hair and makeup since she left office in 2021.
Despite departing Germany’s top job almost two years ago, Merkel is still billing the federal government for several expenses, according to documents obtained by Tagesspiegel via a Freedom of Information Act request.
Merkel, according to a previous Tagesspiegel report, did not retain her longtime former makeup artist, but now relies on a new self-employed hair and makeup artist, who also works as a fashion designer, based in Berlin. The chancellery pays for Merkel’s hair and makeup for both public and private engagements. So far shehas racked up a €17,200 bill in 2023, in addition to a €37,780 bill in 2022.
“The assumption of costs is linked to the performance of continuing official duties — regardless of whether they are public or non-public,” the German chancellery told Tagesspiegel.
Rising costs of officials’ hair and makeup services have sparked some criticism in the past, with The Taxpayers’ Association’s President Reiner Holznagel saying costs should be “reduced to the bare minimum and, in case of doubt, paid privately.”
Current German Chancellor Olaf Scholz also does not spare expenses for his public outings, reported Tagesspiegel. So far this year, representatives of the chancellery have spent €21,808 on hairstyle and makeup expenses, while the number reached €39,910 in 2022.
Numbers from a parliamentary inquiry earlier this year had shown that spending on photographers, hairdressers, and makeup artists rose to around €1.5 million in the first full year of Scholz’s government in 2022. That was nearly 80 percent more than in 2021, the last year of Merkel’s government.
Last week, Bavaria’s state leader Markus Söder made headlines when it was reported that his office had splurged nearly €180,000 on freelance photographers in 2022 alone. This was in addition to €36,000 a year for a permanently employed photographer.
The state chancellery said it hires photographers “on an occasion-related basis at an agreed hourly or daily rate … The images were for press and public relations purposes and for documentation.”
An annual meeting of Volkswagen shareholders in Berlin in May was disrupted by protesters, one of whom hurled the creamy confection at the assembled executives, forcing Chairman Hans DieterPötsch to flinch out of the way.
Among the subjects of their ire: A car plant some 3,500 miles away in the Chinese region of Xinjiang, where Beijing has carried out a campaign of mass detention, reeducation and forced labor that the United States has described as genocide of the Uyghur ethnic minority.
One topless woman in the room waved a banner with the words “End Uyghur Forced Labor” before the protesters were escorted away. Outside, other activists held up signs saying “Camps, forced labor, family separations: VW major shareholders in Lower Saxony must not remain silent about crimes against Uyghurs.”
Volkswagen denies it has ever utilized forced labor in Xinjiang. But it has been less willing to grapple with the broader accusation: That by maintaining the facility at the request of Beijing, the company — and by extension the German government, which supported the carmaker’s investments in China — is providing political cover for crimes against humanity.
“Even if there is no forced labor, it is such a big symbol for the Chinese government to show the world that they bring prosperity to the region,” said Eva Stocker, senior project officer from the World Uyghur Congress, an advocacy group for Uyghur rights and self-determination. “But we see it as a genocide.”
The rising criticism over Volkswagen’s presence in Xinjiang has been accompanied by a shifting in the political and economic winds. Russia’s war on Ukraine has kicked off a broader conversation about strategic dependency, with officials in Brussels and Washington calling for “de-risking” with regard to Beijing. At the same time, worries about climate change are upending the automobile market, with Chinese electric carmakers preparing to challenge legacy brands in Europe on their own soil.
This all poses a conundrum for Volkswagen, which led the Western charge into the Chinese market in the 1980s and remains dependent on business there for 15 percent of its pretax profit and 37 percent of its new car sales last year.
China’s treatment of Uyghurs is unlikely to be central to the discussions as German Chancellor Olaf Scholz hosts a Chinese delegation led by Prime Minister Li Qiang this week. But Volkswagen’s relationship to China, and the human rights abuses being carried out there, is illustrative of Berlin’s increasingly uncomfortable dependency on Beijing — and the challenges Germany is likely to face as the West seeks to turn de-risking from a slogan into action.
Slave labor
Potential complicity in genocide is a charge to which one might expect Volkswagen to be sensitive. When the company was founded in 1937 by the national labor organization of the Nazi Party, it used concentration camp prisoners as slave labor. Hundreds of infants kept at a children’s home run by Volkswagen were starved to death.
During the Holocaust, the Nazis sent their perceived enemies to extermination camps. In Xinjiang, human rights groups have documented mass incarceration, forced sterilization, the suppression of religious practices, including the burning of mosques, and the separation of hundreds of thousands of schoolchildren from their parents. Many believe these practices meet the definition of genocide as acts intended “to destroy, in whole or in part, a national, ethnic, racial or religious group.”
The United States government has denounced human rights abuses in Xinjiang as genocide, as have national legislatures in France, the Netherlands, the United Kingdom, Lithuania and Canada. The German Bundestag has not, though Foreign Minister Annalena Baerbock has called for a ban on goods made with forced labor and for investigations into China’s actions in Xinjiang.
Volkswagen denies it has ever utilized forced labor in Xinjiang | Freddy Chan/EPA via EFE
Investigative journalists have found traces of forced labor camps within 15 miles of Volkswagen’s Xinjiang plant, which is a joint venture initiative with SAIC Motor, the largest state-owned automobile manufacturer in China. As POLITICO and other media reported, the use of forced labor was so rampant in the region that schoolchildren were organized by schools to carry out manual labor.
“By the plant, there are seven concentration camps … so this is what Volkswagen cannot deny, but they say they are not connected with them,” Erkin Zunun, the chief coordinator of the World Uyghur Congress based in Munich, said. “Nobody can say 100 percent there is no connection to forced labor.”
Ralf Brandstätter, the head of Volkswagen’s China operations, said after a visit to the Xinjiang plant in March that he’d found no evidence of forced labor. “I can talk to people and draw my conclusions. I can try and verify the facts [from joint venture partner SAIC], and that’s what I did,” Brandstätter said. “I didn’t find any contradictions,” he added, citing seven staffers he’d spoken to via translators.
Over the past few years, European diplomats based in China have made repeated inquiries into Volkswagen’s presence in Xinjiang, according to three diplomats granted anonymity to speak frankly about their exchanges. Time and again, they received the same answer. “They always insist there’s no forced labor, and that the minorities they hire in the local plant are not forced labor,” one of them said. “They don’t care what happens outside the factory.”
Volkswagen rejected the accusation that by being in Xinjiang, the company is complicit in the human rights violations being perpetrated there. “Will something change if Volkswagen leaves?” said a Volkswagen spokesperson speaking on condition of anonymity. “We have doubts about this.”
The spokesperson said the company pays its employees at the plant on average 30 percent more than other automakers in the region and has had practically no staff turnover in recent years. “We are offering around 250 workers and their families a good … living in the region,” the spokesperson said.
‘Devil’s agreement’
On its own, Volkswagen’s investment in Xinjiang — and the company’s decision to stay there despite human rights violations in the area — makes little reputational or economic sense.
Since the COVID shutdowns, the plant hasn’t been used for vehicle assembly or production, but rather as a sorting center for cars heading to local dealerships. Last year, Volkswagen says some 10,000 cars — an average of less than 28 a day — were cleared through the facility, with plans to increase this over the next few years. Staff at the site carry out water resistance checks, quality controls and assess driver assistance systems, a spokesperson said.
The investment has to be considered in the broader context of Volkswagen’s engagement with Beijing. Unrestricted access to the Chinese market is mission-critical for all German automakers, but for Volkswagen, it’s what makes it a global heavyweight brand. Nearly 40 percent of Volkswagen’s global car sales were in China last year, up from 31 percent a decade ago, according to data from the Center for Automotive Management in Cologne.
According to a senior Western diplomat, Volkswagen’s Xinjiang presence is part of a “devil’s agreement” that the Chinese government imposed on the German car company 15 years ago. Under the deal, Volkswagen had to agree to build a new factory in Xinjiang — which was and has remained an economic backwater — in return for permission for a dozen new plants in the economically vibrant eastern coastal area, as well as the booming central provinces.
“The misleading assumption is that we were forced, that we opened the plant as a push from the government in Beijing,” said the Volkswagen spokesperson. “That isn’t true. It was part of a greater plan — the Go West strategy,” referring to the company’s ambitions to expand into less developed parts of China.
Today, pulling out would risk jeopardizing relations with Beijing, as China often treats expressions of concern about human rights violations in Xinjiang as endorsements of what it sees as U.S. pressure on the country.
The presentation of the new Golf GTI at the Shanghai car show in 2021 | Hector Retamal/AFP via Getty Images
Volkswagen is determined to live with its contractual obligation with SAIC to stay in Xinjiang at least until 2030, Volkswagen chief lobbyist Thomas Steg told journalists in March. “This plant is owned and operated by a non-controlled joint venture, all the decisions have to be taken unanimously,” the company spokesperson said.
In a written statement, Volkswagen Group said it “stands firmly against” forced labor, adding it “takes its responsibility for human rights very seriously in all regions of the world, including China.”
“In a globalized world, we can only really strengthen Germany as a business location if we maintain and further develop our relations with major economic players such as China,” it said.
Green evolution
While Volkswagen has traditionally enjoyed strong support from Berlin for its investments in China, the political winds back home have started to shift.
The main push comes from the Green Party, a junior partner in Germany’s coalition government, and its calls for “values-driven” diplomacy. In May 2022, the German Economy Ministry, led by Green Party heavyweight Robert Habeck, announced it would stop all investment guarantee schemes for companies looking to invest in the Xinjiang region of China due to the deteriorating human rights situation.
Volkswagen’s investment guarantees were not extended because the interministerial committee that decides on them determined that the company “has too little control and knowledge … within the joint venture to adequately counter the human rights risks,” a German official said.
Chinese carmakers with cheaper battery technology are making a play for Europe | Tobias Schwarz/AFP via Getty Images
Foreign Minister Baerbock has also taken a tougher line, warning companies that they won’t be bailed out with taxpayers’ money if “things go wrong” in other parts of the world. Her stance has not gone unnoticed by Beijing. When Baerbock visited China in April, her counterpart Qin Gang warned Berlin it should be thinking about its business interests.
“Both sides should maintain and advance existing cooperation, create a favorable environment and stable expectations for cooperation between enterprises of the two countries, and provide stronger growth drivers for the global economy,” Qin said.
Germany’s first National Security Strategy, released last week, criticizes China for disregarding human rights, although the document does not go further into detail. Berlin also plans to release a dedicated China strategy in July.
For the automaker, the Green Party’s China policy has become a headache. “It’s crazy what Habeck and Baerbock are doing at the moment … [They] just try to bring confrontation to the world,” said Ferdinand Dudenhöffer, director of Center for Automotive Research, an industry group with close ties to Volkswagen and to Chinese carmakers. “It’s really crazy.”
Dudenhöffer insisted the German carmaker had done everything within its capacity to ensure good labor standards in the Xinjiang plant. He didn’t believe the company had broached with Beijing the possibility of the plant’s closure or the transfer of its ownership to its Chinese partners. “I think they discussed it internally, but … if you start to talk about that issue [with the Chinese], then you start to go into opposition with the most important market you have in the world,” he said.
The EV threat
The irony is that Volkswagen’s morally expensive bet may not even pay off.
After enjoying decades of market leadership, the German auto giant is struggling to cope with the impending demise of the combustion engine and is facing unprecedented challenges from Chinese-made electric vehicles, which are now set to become the “greatest risk” facing European carmakers, according to a report by Allianz Trade.
Even as Volkswagen doubles down on the Chinese market, Chinese carmakers with cheaper battery technology are making a play for Europe, with brands like BYD, Great Wall, Nio and Xpeng launching across the Continent.
While electric vehicles only make up around 5 percent of European sales, EU regulators have mandated a phaseout of the combustion engine by 2035. One analysis predicts Chinese imports could make up nearly a fifth of all European sales by 2025 — bad news for local legacy brands.
Even if Volkswagen does find a way to hold out at home, its investments in China could be at risk if Europe raises trade barriers against Chinese vehicles, as France has been calling for. Such a move would almost certainly lead to reciprocal action from Beijing, which has not shied away from using its regulatory muscles to push its diplomatic interests.
In 2017, for example, when South Korea sought to buy a missile defense system from the U.S. in order to stave off the threat from North Korea, Beijing vocally opposed the move, and sales of Hyundai and Kia models subsequently plummeted, sparking rows with dealerships and plant closures.
Under President Xi Jinping, China has also sought to diminish the market share of foreign companies. In telecoms, for example, European players like Ericsson and Nokia have been crowded out by homegrown heavyweights Huawei and ZTE. China may have needed Western companies to jump-start its industrial development, but with Xi seeking to present China as an alternative to the West, that utility is quickly fading.
In other words, for Volkswagen’s executives, cake-throwing protesters may be the least of their worries.
[ad_2]
Stuart Lau , Joshua Posaner and Hans von der Burchard
BERLIN — Germany’s center-right opposition wants to raise the heat on Chancellor Olaf Scholz by launching a parliamentary investigation into his alleged connection to a massive tax evasion scandal.
The case — which dates back over five years to the time when Scholz was still mayor of the Hamburg city-state — is linked to the broader so-called “Cum Ex” affair, under which the German state was defrauded by over €30 billion as some banks, companies, or individuals claimed tax reimbursements from authorities for alleged costs that never occurred.
The scandal already hung over the Social Democratic politician’s election campaign in 2021 but had little impact in the end as Scholz’s potential involvement remained unclear. Now it is heating up again after new details emerged that put his previous defense in question.
The Hamburg regional parliament plans to summon Scholz this spring — which will be for the third time — to an investigative committee looking into the scandal. And now the center-right CDU/CSU bloc also wants to set up an inquiry at the national level in the Bundestag.
“We will request a parliamentary committee of inquiry into the Scholz-Warburg tax affair in the German Bundestag in the first parliamentary week after the Easter vacations,” said the CDU’s Mathias Middelberg, deputy parliamentary group chairman, on Tuesday.
A government spokesperson said that “as a matter of principle,” Berlin does not comment on decisions announced by Bundestag members “out of respect for the constitutional body,” according to media reports.
Katja Mast, the Social Democrats’ chief whip, said the CDU/CSU is not following any interest in knowledge, but rather party tactical interests. “They bring up allegations that have long been refuted,” she said, adding that the committee in Hamburg had clarified all questions.
The CDU/CSU group has enough votes in parliament to be able to set up an investigative committee. The Left party also said it would back such a request. Parliamentary investigative committees can hear witnesses and experts and request access to documents. Although the findings are summarized in a non-binding report, the political consequences, such as for upcoming elections, could be significant.
In a letter to the CDU/CSU parliamentary group seen by POLITICO, chairmen Friedrich Merz and Alexander Dobrindt said that the case should be investigated due to its “significant” importance for German national politics.
Scholz has come under scrutiny because of his links to one Hamburg-based bank involved in the tax evasion scheme: During his time as mayor, he met on three separate occasions in private with one of the owners of the M.M. Warburg & Co. bank, which was already under investigation at the time by the Hamburg tax office. Officials were planning to reclaim €47 million, which they believed were ill-gotten gains in connection with the fraud.
However, in the end, the finance authority let the statute of limitations on the payment demand expire — and years later, after details of Scholz’s meetings with the banker emerged, critics began questioning whether the top Social Democrat might have intervened in favor of the bank.
Although the chancellor has constantly denied having intervened, he has also given no answer on what was discussed during the private meetings. Instead, Scholz said on several occasions during the past two-and-a-half years that he cannot remember the content of the discussions.
During his time as mayor of the Hamburg city-state, Scholz met with one of the owners of the M.M. Warburg & Co. Bank, involved in a tax evasion scheme | Morris MacMatzen/Getty Images
That defense is now being called into question as details emerged of a previous and longtime confidential Bundestag committee hearing with Scholz in July 2020, in which he appeared to easily remember details of his meetings with the banker. His critics argue that Scholz only started to claim having no memory of the meetings when their political and possibly criminal explosiveness became clear.
“This comprehensive memory gap of the chancellor after an initial memory of a concrete meeting … raises a multitude of questions to be clarified,” the letter from the CDU/CSU states.
Scholz and his allies have repeatedly rejected such criticism as politically motivated and stressed that past investigations found no wrongdoing. Scholz also highlighted that in the end, the bank did repay the €47 million, albeit only after it was ordered to do so by a court. The Hamburg Public Prosecutor’s Office said in March that it does not see any initial suspicion against the chancellor in the affair.
That hasn’t discouraged the opposition from planning to dig deeper, though.
“The chancellor would like to see … a line drawn under the clarification of this tax affair. But it is precisely the task of parliament to control the government, to look closely, especially with so many unanswered questions,” said CDU lawmaker Matthias Hauer.
On the future of the internal combustion engine, Germany has gotten its own way, again.
The European Commission and Germany’s Transport Ministry announced a deal Saturday morning that commits the EU executive to figuring out a legal way to allow the sale of new engine-installed cars running exclusively on synthetic e-fuels even after a mandate comes into force requiring sales of only zero-emission vehicles from 2035.
“We have found an agreement with Germany on the future use of e-fuels in cars,” the Commission’s Green Deal chief Frans Timmermans said on Twitter. “We will work now on getting the CO2 standards for cars regulation adopted as soon as possible.”
The deal heads off a row over car legislation that was all-but-agreed until Germany, along with a small club of allies, slammed on the brakes just days before formal final approval on a law that is the centerpiece of the EU’s green agenda.
Timmermans said the Commission would “follow up swiftly” with “legal steps” to turn a non-binding annex to the law, introduced originally at the insistence of Europe’s car-making titan Germany, into a concrete workaround allowing new vehicles running on e-fuels, which do emit some CO2, to be sold post-2035.
As a first step, the Commission has agreed to carve out a new category of e-fuel-only vehicles inside the existing Euro 6 automotive rulebook and then integrate that classification into the contentious CO2 standards legislation that mandates the 2035 phase-out date for sales of new combustion-engine vehicles.
The terms of the final deal from Timmermans’ cabinet chief Diederik Samsom, seen by POLITICO, say the Commission will reopen the text of the engine-ban law if EU lawmakers manage to stop the introduction of a technical annex that would make space for e-fuels alongside the agreed CO2 standards. Reopening the proposed law’s text is a move that is fundamentally opposed by the European Parliament and green-minded countries.
The crux of the standoff was that Germany demanded binding legal language that would ensure the Commission would find a way to satisfy Berlin’s demands even if the European Parliament, or the courts, moved to block any tweaks or legal annexes to the 2035 zero-emissions legislation covering cars and vans.
In the statement, Samsom promised the Commission will publish its full e-fuels proposal as a so-called delegated act this fall. In practice, that means the original 2035 legislation will pass at first — offering the European Commission a critical win — but it sets up a future fight over the technical additions needed to satisfy Berlin.
“The law that 100 percent of cars sold after 2035 must be zero emissions will be voted unchanged by next Tuesday,” said Pascal Canfin, the French liberal lawmaker spearheading the file in the assembly. “Parliament will decide in due course on the Commission’s future proposals on e-fuels.”
Engine endgame
The deal means energy ministers can sign off on the original 2035 proposal during a meeting on Tuesday given that Berlin now has assurances that its demands will be met. In advance, EU ambassadors will review the bilateral deal between Brussels and Berlin on Monday, an EU diplomat said.
The agreement caps a decade of German pushback on EU automotive emissions rule-making.
In 2013, then-Chancellor Angela Merkel intervened late to water down previous iterations of car emission standards legislation, securing tweaks critical to the country’s hulking automotive industry.
The deal means Germany has effectively dropped its last-minute opposition to the car engine ban law | Sean Gallup/Getty Images
Since the Volkswagen Dieselgate scandal, most carmakers have shifted their investments toward electric vehicles, but some industry interests, notably high-end carmakers such as Porsche and Germany’s web of combustion engine component makers, have sought to save traditional gas guzzlers from the clutches of a de facto EU sales ban.
Figuring out a final workaround on e-fuels in the 2035 legislation will still take some months, given that technical standards haven’t yet been clarified for setting out a “robust and evasion-proof” system for selling cars that can only be fuelled on synthetic alternatives to petrol and diesel, according to Samsom’s statement.
The timeline is already clear in Berlin’s perspective. “We want the process to be completed by autumn 2024,” said the German Transport Ministry, which is run by the country’s Free Democratic Party. The FDP, the most junior in Germany’s three-way governing coalition, had wanted fixed legal language to guarantee a loophole for e-fuels, which can theoretically be CO2-neutral but which wouldn’t normally comply with the emissions legislation since they do still emit tailpipe pollutants.
With the FDP’s popularity tumbling, the car policy row with Brussels has been a popular talking point in German media over recent weeks. One survey reports that 67 percent of respondents are against the engine ban legislation. Ahead of national elections in late 2025, the FDP is betting on driver-friendly policies such as e-fuels, new road construction initiatives and a block on the implementation of a national highway speed limit, to raise its profile.
Market watchers don’t anticipate e-fuels to offer much in the way of a mass-market alternative to electric vehicles, given that they are costly to produce and don’t exist in commercial volumes today. A study by the Potsdam Institute for Climate Research reports that even if all global e-fuel production was allocated to German consumers, the output would only meet a tenth of national demand in the aviation, maritime and chemical sectors by 2035.
“E-fuels are an expensive and massively inefficient diversion from the transformation to electric facing Europe’s carmakers,” said Julia Poliscanova from the green group Transport & Environment.
Auto politics
Despite not being on the formal agenda, the issue dominated discussions on the sidelines of this week’s summit of EU leaders in Brussels. A deal between Brussels and Berlin was only struck at 9 p.m. on Friday, hours after leaders left the EU capital, before being formally announced on social media early Saturday.
“The way is clear,” said German Transport Minister Volker Wissing in announcing the agreement. “We have secured opportunities for Europe by keeping important options open for climate-neutral and affordable mobility.”
The deal means Germany has effectively dropped its last-minute opposition to the car engine ban law, collapsing a blocking minority of Italy, Poland, Bulgaria and the Czech Republic that had put a roadblock in front of final ratification by ministers of the deal reached last October between the three EU institutions.
It remains unclear whether Italy’s attempts to find a separate workaround for biofuels — promoted personally by Prime Minister Giorgia Meloni at the summit — also succeeded. However, without Berlin’s support, Rome doesn’t have a way to block the legislation.
German Transport Minister Volker Wissing | Maja Hitij/Getty Images
Responses to the Commission working up a bespoke fix for its biggest member country on otherwise agreed legislation were generally negative, with many arguing the e-fuels issue is a diversion.
“The opening for e-fuels does not mean a significant change for the transformation to electric cars,” said Ferdinand Dudenhöffer, a professor at the Center for Automotive Research in Duisburg. He said the Commission’s dealmaking raised “new investment uncertainties” that undermined the bloc’s efforts to catch up with China, the world’s leading producer of electric vehicles.
Still, most are just happy that the combustion engine row is ended, for now.
“It is good that this impasse is over,” said German Environment Minister Steffi Lemke, who backed the original 2035 deal without a reference to e-fuels. “Anything else would have severely damaged both confidence in European procedures and in Germany’s reliability inside European politics,” the minister said in a statement.
BERLIN — Germany’s Christian Democrats, the country’s largest opposition group, are planning to shift away from the pragmatic stance toward China that characterized Angela Merkel’s 16 years as chancellor, claiming that maintaining peace through trade has failed.
It’s a remarkable course change for the conservative party that pursued a strategy of rapprochement and economic interdependence toward China and Russia during Merkel’s decade and a half in power. The volte-face has been spurred by Moscow’s invasion of Ukraine and Beijing’s increasingly aggressive stance — both economically and politically — in the Asian region and beyond.
According to a draft position paper seen by POLITICO, the conservatives say the idea of keeping peace through economic cooperation “has failed with regard to Russia, but increasingly also China.” The 22-page paper, which is to be adopted by the center-right Christian Democratic Union/Christian Social Union (CDU/CSU) parliamentary group in the Bundestag around Easter, outlines key points for a new China policy.
In a world order that is changing after Russia’s full-scale invasion of Ukraine, Chancellor Olaf Scholz last year announced a Zeitenwende, or major turning point, in German security policy. Economy Minister Robert Habeck and Foreign Minister Annalena Baerbock, in particular, have stressed the necessity of a comprehensive China strategy, an idea already mentioned in the coalition agreement to form Scholz’s government. Their ministries have elaborated two different drafts, but a comprehensive strategy is not yet in sight.
“We realize at this point in time, with some surprise, which is why we prepared and presented this paper, that the German government is significantly behind schedule on key foreign and security policy documents,” said CDU foreign policy lawmaker Johann Wadephul.
The foreword to the position paper states that “the rise of communist China is the central, epochal challenge of the 21st century for all states seeking to preserve, strengthen, and sustain the rules-based international order.” The CDU/CSU parliamentary group is open to working out a “national consensus” with Scholz’s government. That consensus, the group says, must be embedded in the national security strategy and in a European China strategy.
The relationship with China is described in the same triad fashion that wasformulated by the European Commission in 2019 and is in the coalition agreement of the current German government. Under this strategy,the Asian country is seen as a partner, economic competitor and systemic rival.
But the CDU/CSU group’s paper says policy should move away from a Beijing-friendly, pragmatic stance toward China, especially on trade. “We should not close our eyes to the fact that China has shifted the balance on its own initiative and clearly pushed the core of the relationship toward systemic rivalry,” the text states.
“I say to this also self-critically [that] this means for the CDU/CSU a certain new approach in China policy after a 16-year government period,” Wadephul said.
The paper calls for a “Zeitenwende in China policy,” too, concluding that Germany should respond “with the ability and its own strength to compete” wherever China seeks and forces competition; should build up its resilience and defensive capability and form as well as expand alliances and partnerships with interest and value partners; and demonstrate a willingness to partner where it is openly, transparently and reliably embraced by China.
The CDU/CSU papercalls for a European China strategy and a “European China Council” with EU neighbors for better cooperation. A central point is also strengthening reciprocity and European as well as German sovereignty.
“Decoupling from China is neither realistic nor desirable from a German and European perspective,” according to the text.
To better monitor dependencies, the paper proposes an expert commission in the Bundestag that would present an annual “China check” on dependencies in trade, technology, raw materials and foreign trade, with the overall aim of developing a “de-risking” strategy.
BERLIN — Europe’s worst-kept secret is that the Germans ultimately decide everything.
“I’ll never forget how all the other member states held back in anticipation, waiting to see what the Germans would do,” a senior U.K. official, recalling his time in Brussels, recently told a private dinner of MPs and other German officials in Berlin.
The recollection was meant as a compliment, one the official hoped would ingratiate him with the Germans around the table.
Sad thing is it worked.
The second worst-kept secret in Brussels is that for all the “peace project” kumbaya, the Germans actually enjoy dominating the place. That said, even stalwart veterans of the EU bubble were hard-pressed in recent days to cite a more blatant example of toxic Germanity than Berlin’s last-minute intervention to save the internal combustion engine.
To recap: Last week, EU countries were expected to rubber-stamp a package of measures aimed at ridding Europe’s roads of fuel-burning autos. Under the plan, the EU would prohibit new registrations of cars powered by internal combustion engines beginning in 2035. The sweeping deal, the culmination of years of painstaking negotiations in Brussels and European capitals, is a pillar of the EU’s ambitious goal to become carbon neutral by 2050.
Berlin’s 11th-hour intervention on a deal everyone believed was done and dusted not only left the EU’s environmental policy in limbo, it also laid bare the bloc’s power vertical in all its dubious Teutonic glory. The message: Germany is no longer even trying to hide its power.
Enter France.
“For the French, the situation also represents an opportunity and they are never ones to waste a good crisis,” an EU diplomat said. “The more they can contribute to the idea that Germany goes it alone, the more it strengthens the view that the Germans are an unreliable partner in Europe.”
Germany’s unprecedented move has given rise to fears that other countries will try to follow its example and hold EU reforms hostage by threatening a last-minute veto to win concessions, in effect rewriting the rules of engagement.
Germans may not be known for their finesse, but even so, Berlin’s bare-knuckle tactics to save the engine have not just shocked Brussels veterans, it’s angered them.
That’s why the real significance of the standoff has less to do with CO2 emissions than how Brussels works. One big concern among EU insiders is that the coalition Germany has assembled to save the car, which includes the likes of Poland, Austria, the Czech Republic and Bulgaria, will go rogue as a bloc on other fronts, with or without German support.
Berlin’s views on “the future of mobility” were so clear that Mercedes, VW and BMW pledged to shift to all-electric by 2035 | Photo by Sean Gallup/Getty Images
It’s easy to mock the circuitous nature of EU decision-making, the push and pull between the European Commission, Parliament and Council, communicated in the opaque dialect of Brussels’ earnest eurocrats.
Boring as it may be, the alchemy produces bona fide results that legitimize and sustain the EU.
That Germany is willing to tinker with this delicate balance betrays either ignorance in the current regime of how the EU works, ambivalence, or both.
One could argue with justification that Germany was never going to kill the golden goose. Invented and perfected in Germany over more than a century by the likes of Mercedes, BMW and Audi, the internal combustion engine has been the wellspring of German pride and prosperity for generations.
The image of a piston-fired Porsche 911 zooming down the autobahn is as core to German identity as sex is to the French.
Take that away, what’s left (aside from beer and bratwurst)?
Indeed, considering that the country’s automakers haven’t proved particularly adept at manufacturing electric cars (or more specifically the batteries at the heart of the vehicles), there was a strong case for Germany to develop low-emission synthetic fuels that would keep the internal combustion engine alive.
Berlin had at least a decade to do so.
Thing is, it didn’t, choosing instead to pour billions into subsidizing the purchase of electric vehicles and the infrastructure to recharge them (full disclosure: the author is a beneficiary of such a subsidy).
What’s more, Germany also encouraged other European countries to follow suit. In fact, Berlin’s views on “the future of mobility” were so clear that Mercedes, VW and BMW pledged to shift to all-electric by 2035. The cluster of countries that have served as the workbench for those companies, from Slovakia to Hungary and Austria, all agreed to go along.
That’s why the German insistence this month that the EU carve out an exception to the engine ban for cars powered by synthetic, so-called e-fuels has caught the rest of Europe flat-footed.
Why now? In a word, politics.
Germans may not be known for their finesse, but even so, Berlin’s bare-knuckle tactics to save the engine have not just shocked Brussels veterans, it’s angered them | John Thys/AFP
Chancellor Olaf Scholz’s Social Democrats have dropped below 20 percent in a number of recent polls, putting them more than 10 percentage points behind the first-place Christian Democrats.
Scholz’s smallest coalition partner, the business-oriented Free Democrats (FDP), are in even worse shape. The party fared miserably in a string of recent regional elections and in national polls, it is teetering perilously close to the 5 percent threshold parties need to surpass for entry into parliament.
Party leader Christian Lindner, who used to drive souped-up Porsches around the storied Nürburgring race track, has vowed to save the engine from the clutches of the Green lobby.
Scholz, keenly aware that his party’s base also remains attached to “das Auto,” has been happy to let him try and has so far not stepped in to intervene.
About 1 million Germans work in the auto industry and many of those jobs — especially at suppliers — would be lost if the engine is killed for the simple reason that electric cars have far fewer (and different) parts than traditional automobiles.
The real mystery is why the Greens, the other party in Germany’s governing triumvirate, have not done more to resolve the crisis. Not only has the environmental party championed the engine ban for years, but it is also the most pro-European party in the government and would normally be at pains to keep Berlin from even appearing to undermine Brussels.
Yet Green Vice Chancellor Robert Habeck has largely been silent on the issue. Far from the fray in Europe, he was last spotted in the Amazon having his face painted by an indigenous girl during a swing through the region.
In a bid to defuse the standoff ahead of next week’s EU leaders’ summit, the German government sent a letter to the Commission on Wednesday, spelling out what it wants in return for lifting its blockade. Its chief demand — a broad exception for e-fuels — was already rejected by the Parliament and other institutions during the original negotiations over the package.
Reversing that would require the deal to be reopened.
Germany and Japan agreed on Saturday to strengthen cooperation on economic security in the aftermath of tensions over global supply chains and the economic impact of the war in Ukraine.
In the first high-ministerial government consultations held between the two countries, German Chancellor Olaf Scholz reached out to Tokyo to seek to reduce Germany’s dependence on China for imports of raw materials.
“The current challenges of our time make it clear: It is important to expand cooperation with close partners and acquire new partners. We want to reduce dependencies and increase the resilience of our economies.” the German chancellor said in a tweet.
Scholz and Japanese Prime Minister Fumio Kishida said they believe the agreement will allow both countries to diversify value chains in order to be able to reduce economic risks.
In a joint statement, the two countries said they will work on establishing “a legal framework for bilateral defense and security cooperation activities,” including ways to protect critical infrastructures, trade routes and to secure future supply of sustainable energy.
Germany’s decision to prioritize consultations with Japan came after the Asian country put forward an economic security bill last year aimed at securing the uptake of technology and bolstering critical supply chains.
Japan is Germany’s second-largest trading partner in Asia after China, with a bilateral trade volume of €45.7 billion mainly based on the import and export of machinery, vehicles, electronics and chemical products.
The two leaders also exchanged views on the situation in Ukraine, cooperation in the Indo-Pacific region and the G7 meeting in Hiroshima scheduled for May.
BERLIN — German prosecutors have found “traces”of evidence indicating that Ukrainians may have been involved in the explosions that blew up the Nord Stream gas pipelines in September 2022, according to German media reports Tuesday.
Investigators identified a boat that was potentially used for transporting a crew of six people, diving equipment and explosives into the Baltic Sea in early September. Charges were then placed on the pipelines, according to a joint investigation by German public broadcasters ARD and SWR as well as the newspaper Die Zeit.
The German reports said that the yacht had been rented from a company based in Poland that is “apparently owned by two Ukrainians.”
However, no clear evidence has been established so far on who ordered the attack, the reports said.
In its first reaction, Ukraine’s government dismissed the reports.
Mykhailo Podolyak, an adviser to Ukrainian President Volodymyr Zelenskyy, denied the Ukrainian government had any involvement in the pipeline attacks. “Although I enjoy collecting amusing conspiracy theories about the Ukrainian government, I have to say: Ukraine has nothing to do with the Baltic Sea mishap and has no information about ‘pro-Ukraine sabotage groups,'” Podolyak wrote in a tweet.
Three of the four pipes making up the Nord Stream 1 and 2 undersea gas pipelines from Russia to Germany were destroyed by explosions last September. Germany, Sweden and Denmark launched investigations into an incident that was quickly established to be a case of “sabotage.”
The German media reports — which come on top of a New York Times report Tuesday which said that “intelligence suggests that a pro-Ukrainian group” sabotaged the pipelines — stress that there’s no proof that Ukrainian authorities ordered the attack or were involved in it.
Any potential involvement by Kyiv in the attack would risk straining relations between Ukraine and Germany, which is one of the most important suppliers of civilian and military assistance to the country as it fights against Russia’s full-scale invasion.
According to the investigation by German public prosecutors that is cited by the German outlets, the team which placed the explosive charges on the pipelines was comprised of five men — a captain, two divers and two diving assistants — as well as one woman doctor, all of them of unknown nationality and operating with false passports. They left the German port of Rostock on September 6 on the rented boat, the report said.
It added that the yacht was later returned to the owner “in uncleaned condition” and that “on the table in the cabin, the investigators were able to detect traces of explosives.”
But the reports also said that investigators can’t exclude that the potential link to Ukraine was part of a “false flag” operation aiming to pin the blame on Kyiv for the attacks.
Contacted by POLITICO, a spokesperson for the German government referred to ongoing investigations by the German prosecutor general’s office, which declined to comment.
The government spokesperson also said: “a few days ago, Sweden, Denmark and Germany informed the United Nations Security Council that investigations were ongoing and that there was no result yet.”
Russian foreign ministry spokesperson Maria Zakharova dismissed the reports of Ukrainian involvement in the Nord Stream bombings, saying in a post on the Telegram social media site that they were aimed at distracting attention from earlier, unsubstantiated, reports that the U.S. destroyed the pipelines.
Veronika Melkozerova in Kyiv contributed reporting.
BERLIN — German Chancellor Olaf Scholz is expected to announce the delivery of German Leopard 2 tanks to Ukraine on Wednesday, an official with knowledge of the matter told POLITICO.
That decision is a significant U-turn and potentially a decisive moment in the war as it should pave the way for a broader coalition of countries to send battle tanks to the fronts against the Russian invaders. As Leopard 2 tanks are made in Germany, Berlin has to give its permission for their re-export.
Berlin has long resisted sending the Leopard 2s, wanting Washington to take the first step in sending heavy armor. That kind of joint action finally appeared to be imminent on Tuesday, with two U.S. officials saying the administration of U.S. President Joe Biden was leaning toward sending “a significant number” of M1 Abrams tanks to Ukraine. An announcement on the U.S. tanks could come as early as this week.
Scholz’s expected announcement — which has not yet been officially confirmed — comes as the chancellor is scheduled to address the German parliament on Wednesday at 1 p.m. According to the official, Germany will also confirm that it will allow other countries such as Poland to send their Leopard tanks to Ukraine. Warsaw said on Tuesday that it had sent its formal request for those re-exports.
German magazine Spiegel also reported Tuesday evening that the chancellor had decided to supply Ukraine with Leopard tanks, saying that Germany would send “at least one company of Leopard 2A6s” as part of a broader coalition of countries that would also send the German-made vehicle.
A German government spokesperson could not be reached for comment.
Ukraine had pressed hard for Germany to agree to send tanks at a meeting of defense ministers at the U.S. Ramstein air base in Germany in Friday, but German Defense Minister Boris Pistorius dashed Kyiv’s hope, saying no decision had been made.
BERLIN — Germany and its European partners plan to “quickly” send two Leopard 2 tank battalions to Ukraine — suggesting about 80 vehicles — the government in Berlin announced Wednesday, adding that Germany would provide one company of 14 Leopard 2 A6 tanks “as a first step.”
Other countries likely to send Leopards to the war against Russia include Poland, Spain, Norway and Finland.
The decision by Chancellor Olaf Scholz — which emerged on Tuesday evening — marks a decisive moment in Western support for Ukraine in its fight against Russian aggression, which entered its 12th month this week and could soon heat up further as Moscow is expected to launch a new offensive.
German Defense Minister Boris Pistorius told reporters that the training of Ukrainian crews on the tanks will begin “very soon,” and that the Leopards will be arriving in Ukraine in about two months.
Ukrainian President Volodymyr Zelenskyy said he was “very happy” with the promise of tanks from the U.S., Germany and Britain. “But speaking frankly, the number of tanks and the delivery time to Ukraine is critical,” he said, in an interview with Sky News.
Andriy Yermak, the head of Zelenskyy’s office, welcomed the German announcement as a “first step.”
“Leopards are very much needed,” he said on Telegram.
Zelenskyy himself also welcomed the move on Twitter. “Sincerely grateful to the Chancellor and all our friends in” Germany, he said.
Russia’s Ambassador to Germany Sergei Nechaev said in a statement the decision was “extremely dangerous,” and took the conflict “to a new level of confrontation.”
Kyiv had long urged Germany and other partners to supply its army with the powerful German-built Leopard 2 tank, but Scholz hesitated to take the decision, partly out of concern that it could drag Germany or NATO into the conflict. He remained adamant that such a move had to be closely coordinated and replicated by Western allies, most notably the United States.
During a speech in Germany’s parliament on Wednesday, Scholz sought to defend his long hesitations on tank deliveries, saying that it “was right and it is right that we did not allow ourselves to be rushed” into taking a decision but insisted “on this close cooperation” with allies, notably the United States.
Scholz also stressed that Germany would not actively engage in the war but would continue to seek to “prevent an escalation between Russia and NATO.” He also launched a direct appeal to German citizens who might be skeptical: “Trust me, trust the German government: We will continue to ensure … that this support is provided without the risks for our country rising in the wrong direction.”
The news of an imminent announcement by U.S. President Joe Biden to send “a significant number” of American M1 Abrams tanks to Ukraine facilitated the chancellor’s decision. Scholz had come under huge pressure from European partners like Poland, as well as his own coalition partners in government, to no longer block the delivery of the German tank. Since they are German-made, their re-export needed the approval of the German government.
NATO Secretary-General Jens Stoltenberg tweeted that he “strongly welcomes” Berlin’s decision | Dirk Waem /Belga Mag/AFP via Getty Images)
“The goal is to quickly form two tank battalions with Leopard 2 tanks for Ukraine,” a German government spokesperson said.
“As a first step, Germany will provide a company of 14 Leopard-2 A6 tanks from Bundeswehr stocks. Other European partners will also hand over Leopard-2 tanks,” the spokesperson added.
The spokesperson also said the training of Ukrainian crews on the tanks “is to begin rapidly in Germany.” Berlin would also provide “logistics, ammunition and maintenance of the systems.”
In addition to the 14 Leopard 2A6 tanks, Germany will also send two tank recovery vehicles, Deputy Defense Minister Siemtje Möller said in a letter to defense policy lawmakers, seen by POLITICO.
Möller wrote that Ukrainian tank crews will undergo a six-week-training on the Leopards, in Germany which is supposed to start in early February. “This procedure should enable the Leopard 2 A6 to be taken over by Ukraine by the end of the first quarter of 2023.”
Germany will provide partner countries like Spain, Poland, Finland and Norway, which “want to quickly deliver Leopard-2 tanks from their stocks,” the necessary re-export permission, the spokesperson said.
The decision by Chancellor Olaf Scholz marks a decisive moment of Western support for Ukraine | David Hecker/Getty Images
NATO Secretary-General Jens Stoltenberg tweeted that he “strongly welcomes” Berlin’s decision. “At a critical moment in Russia’s war, these can help Ukraine to defend itself, win & prevail as an independent nation.”
Spain, which owns one of the largest fleets of Leopards in the EU, with 347 tanks, has previously said it would send tanks to Kyiv as part of a European coalition, according to El País.
The Norwegian government is considering sending eight of its 36 Leopard tanks to Ukraine, but no decision has been made yet, Norwegian daily DN reported late Tuesday after a meeting of the parliamentary committee on foreign affairs and defense, quoting sources close to the deliberation.
Portugal, which has 37 Leopards, could provide four tanks to the assembling European coalition, a source close to the government told Correio da Manhã late on Tuesday.
The Netherlands, which is leasing 18 Leopards from Germany, is also weighing supplying some of their armored vehicles, Dutch newswire ANP reported, quoting a government spokesperson. On Tuesday, Dutch Prime Minister Mark Rutte said he was “willing to consider” buying the tanks from Germany and shipping them to Ukraine, but that no decision had been made.
On Wednesday, the Swedish defense minister said that Sweden did not exclude sending some of its own tanks at a later stage, according to Swedish daily Svenska Dagbladet.
Wilhelmine Preussen and Zoya Sheftalovich contributed reporting.
If Germany won’t play ball, then Poland will find other partners to deliver Leopard 2 battle tanks to Ukraine, Polish Prime Minister Mateusz Morawiecki said in pointed remarks accusing Berlin of foot-dragging in its support of Kyiv against invading Russian forces.
Poland is prepared to go around German opposition to build a “smaller coalition” of countries and find allies willing to send the tanks to Ukraine, Morawiecki said in an interview with the Polish Press Agency published on Sunday.
“We will not passively watch Ukraine bleed to death,” Morawiecki said.
His remarks come amid a heated debate over whether to send the German-made battle tanks to Ukraine. Kyiv has requested the weapons in order to renew its offensive against Russia in a push to reconquer captured territory.
Germany has expressed reluctance toward sending tanks without the U.S. doing the same, as it fears an escalation of the conflict. Berlin also holds a veto power over the re-export of the weapons from any of its allies. German Defense Minister Boris Pistorius has denied blocking any deliveries.
“We are in very close dialogue on this issue with our international partners, above all with the U.S.,” Pistorius, who took up the defense post last week, said in an interview with Bild published on Sunday.
Morawiecki has previously said that he was ready to go ahead with Leopard deliveries even without Berlin’s approval.
“Since Minister Pistorius denies that Germany is blocking the supply of tanks to Ukraine, I would like to hear a clear declaration that Berlin supports sending them,” the prime minister told the Polish Press Agency.
“The war is here and now. … Do the Germans want to keep them in storage until Russia defeats Ukraine and is knocking on Berlin’s door?” Morawiecki said.
Political analyst Volodymyr Fesenko said in a statement that Germany was edging towards allowing the tanks to be sent — and advised “patience and perseverance.” But the broader takeaway was that Ukraine had to rebuild its own armaments industry in order to not have to only rely on help from abroad in the future, he added.
PARIS — Germany “would not stand in the way” if Poland or other allies asked for permission to send their German-built Leopard tanks to Ukraine, Foreign Minister Annalena Baerbock said on Sunday.
The remarks by the Green politician, who was interviewed by French TV LCI on the sidelines of a Franco-German summit in Paris, came in response to comments by Polish Prime Minister Mateusz Morawiecki, who has raised pressure on Berlin in recent days by saying that Poland is willing to supply Kyiv with Leopard tanks, which would require German approval.
Baerbock, however, stressed that “we have not been asked so far” by Poland for such permission. “If we were asked, we would not stand in the way,” she added.
German officials have gotten increasingly frustrated in recent days by what they perceive as a “media blame-game” by Poland, as Warsaw has repeatedly suggested that Germany was hampering plans to send Leopard tanks to Ukraine, although it appears that the necessary request for export permission has not been made yet.
Germany is, however, still dragging its feet when it comes to the bigger question of whether it would be willing to send its own Leopard tanks to Ukraine, for example as part of a broader coalition with Poland and other countries like Finland and Denmark.
Pressed on that point during a press conference in Paris on Sunday, German Chancellor Olaf Scholz avoided giving a clear answer, stressing instead that Berlin had never ceased supporting Ukraine with weapons deliveries and took its decisions in cooperation with its allies.
Poland’s Morawiecki said on Sunday that his country was ready to build a “smaller coalition” for sending tanks to Ukraine without Germany.
Baerbock’s comments are therefore also raising the pressure on Scholz to take a clearer position on the tank issue — at least when it comes to granting export permissions to other countries.
After Vice Chancellor Robert Habeck, also from the Greens, said earlier that Germany “should not stand in the way” of permitting such deliveries, the foreign minister’s even more definitive statement makes it even harder for Scholz to take a different position.
Ukraine has been appealing to Germany and other Western nations to supply modern Western-made battle tanks in order to fend off an expected Russian spring offensive.
PARIS — German Chancellor Olaf Scholz raised optimism on Sunday that the EU and the U.S. can reach a trade truce in the coming months to prevent discrimination against European companies due to American subsidies.
Speaking at a press conference with French President Emmanuel Macron following a joint Franco-German Cabinet meeting in Paris, Scholz said he was “confident” that the EU and the U.S. could reach an agreement “within the first quarter of this year” to address measures under the U.S. Inflation Reduction Act that Europe fears would siphon investments in key technologies away the Continent.
“My impression is that there is a great understanding in the U.S. [of the concerns raised in the EU],” the chancellor said.
Macron told reporters that he and Scholz supported attempts by the European Commission to negotiate exemptions from the U.S. law to avoid discrimination against EU companies.
The fresh optimism came as both leaders adopted a joint statement in which they called for loosening EU state aid rules to boost home-grown green industries — in a response to the U.S. law. The text said the EU needed “ambitious” measures to increase the bloc’s economic competitiveness, such as “simplified and streamlined procedures for state aid” that would allow pumping more money into strategic industries.
The joint statement also stressed the need to create “sufficient funding.” But in a win for Berlin, which has been reluctant to talk about new EU debt, the text says that the bloc should first make “full use of the available funding and financial instruments.” The statement also includes an unspecific reference about the need to create “solidarity measures.”
EU leaders will meet early next month to discuss Europe’s response to the Inflation Reduction Act, including the Franco-German proposal to soften state aid rules.
The relationship between Scholz and Macron hit a low in recent months when the French president canceled a planned joint Cabinet meeting in October over disagreements on energy, finance and defense. But the two leaders have since found common ground over responding to the green subsidies in Washington’s Inflation Reduction Act. Macron said that Paris and Berlin had worked in recent weeks to “synchronize” their visions for Europe.
“We need the greatest convergence possible to help Europe to move forward,” he said.
But there was little convergence on how to respond to Ukraine’s repeated requests for Germany and France to deliver battle tanks amid fears there could be a renewed Russian offensive in the spring.
Asked whether France would send Leclerc tanks to Ukraine, Macron said the request was being considered and there was work to be done on this issue in the “days and weeks to come.”
Scholz evaded a question on whether Germany would send Leopard 2 tanks, stressing that Berlin had never ceased supporting Ukraine with weapons deliveries and took its decisions in cooperation with its allies.
“We have to fear that this war will go on for a very long time,” the chancellor said.
Reconciliation, for past and present
The German chancellor and his Cabinet were in Paris on Sunday to celebrate the 60th anniversary of the Elysée treaty, which marked a reconciliation between France and Germany after World War II. The celebrations, first at the Sorbonne University and later at the Elysée Palace, were also a moment for the two leaders to put their recent disagreements aside.
Paris and Berlin have been at odds in recent months not only over defense, energy and finance policy, but also Scholz’s controversial €200 billion package for energy price relief, which was announced last fall without previously involving the French government. These tensions culminated in Macron snubbing Scholz by canceling, in an unprecedented manner, a planned press conference with the German leader in October.
At the Sorbonne, Scholz admitted relations between the two countries were often turbulent.
“The Franco-German engine isn’t always an engine that purrs softly; it’s also a well-oiled machine that can be noisy when it is looking for compromises,” he said.
Macron said France and Germany needed to show “fresh ambition” at a time when “history is becoming unhinged again,” in a reference to Russia’s aggression against Ukraine.
“Because we have cleared a path towards reconciliation, France and Germany must become pioneers for the relaunch of Europe” in areas such as energy, innovation, technology, artificial intelligence and diplomacy, he said.
On defense, Paris and Berlin announced that Franco-German battalions would be deployed to Romania and Lithuania to reinforce NATO’s eastern front.
The leaders also welcomed “with satisfaction” recent progress on their joint fighter jet project, FCAS, and said they wanted to progress on their Franco-German tank project, according to the joint statement.
The joint declaration also said that both countries are open to the long-term project of EU treaty changes, and that in the shorter term they want to overcome “deadlocks” in the Council of the EU by switching to qualified majority voting on foreign policy and taxation.
