PARIS — French and German defense companies are setting up local shops in Ukraine for arms maintenance — a first step toward manufacturing weapons in the country.
This week, Germany’s Federal Cartel Office gave the green light to a proposed joint venture between Rheinmetall, a German arms maker, and the Ukrainian Defense Industry, a Ukrainian state-owned defense group.
France’s Armed Forces Minister Sébastien Lecornu traveled to Kyiv this week with about 20 French defense contractors — reportedly including Thales, MBDA, Nexter and Arquus — to facilitate partnerships with Ukrainian officials.
On Friday, the Ukrainian capital hosted the Defense Industries Forum, an arms fair attended by 165 defense companies from 26 countries.
At the event, Ukrainian officials metdirectly with defense companies to sign contracts without going through Western governments, explore joint production opportunities and provide specific input about their needs on the ground in the fight against Russian President Vladimir Putin’s full-scale invasion.
The goal is to “boost co-production and cooperation to strengthen Ukraine and our partners,” Ukrainian Foreign Minister Dmytro Kuleba said earlier this week.
The arms fair is taking place as Western armies, especially in Europe, are reaching the limit of what they can give to Ukraine from their own stocks. For the past few months, Ukraine has sought to ramp up its own arms industry, in part because U.S. elections in 2024 could mean a return of Donald Trump as president. The former leader has hinted at not providing much support to Kyiv if he wins a second term.
As Kyiv prepares for a long war, capitals such as Paris are seeking to shift from donations to contracts and cooperation with the private sector.
French pivot
In the past week, French officials have started to hammer home a new message: France can no longersustaingiving weapons to Ukraine and will insteadplug Ukrainian officials into the country’s defense industry.
According to a government report, France delivered €640.5 million worth of weapons to Ukraine in 2022, including 704 missile launchers and portable anti-tank rocket launchers, 562 12.7mm machine guns, 118 missiles and missile launchers, and 60 armored fighting vehicles for free.
“We can’t continue to take resources from our armed forces indefinitely, otherwise we’ll be damaging our own defense capabilities and the training levels of our troops,” Lecornu told French TV Sunday.
Ukrainian servicemen ride on a T-64 tank during a military training exercise in Kyiv region | Genya Savilov/AFP via Getty Images
Creating bridges between Ukrainian officials and French companies will “create long-term solidity, a more contractual relationship for ammunition and maintenance,” he told lawmakers two days later.
In Kyiv this week, French defense contractors did ink deals with Ukraine for artillery, armored vehicles, drones and mine clearance — including for cooperation in the war-torn country.
According to Le Figaro, French firm Arquus signed a letter of intent Thursday to ensure the maintenance of armored personnel carriers on the ground, and could install a production facility in the future. Nexter CEO Nicolas Chamussy — the manufacturer of the Caesar self-propelled howitzer — also told the French outlet it was looking for a local partner to create a joint venture for maintenance.
French startup Vistory will build two 3D-printing factories to make spare parts, according to La Croix.
Germany, Sweden and UK
France’s shift comes on the heels of similar plans with British arms manufacturer BAE Systems and the Swedish government.
In August, Kyiv and Stockholm signed a statement of intent to deepen cooperation “in production, operation, training, and servicing” of the Combat Vehicle 90 (CV90) platform, manufactured by a Swedish branch of BAE Systems. A few days later, BAE Systems announced it would set up a local entity to ramp up production of 105mm light artillery guns.
The German competition authority’s decision this week to green-light Rheinmetall’s joint venture with the Ukrainian Defense Industry — which will be based in Kyiv and operate exclusively in Ukraine — paves the way for a partnership designed to maintain and service military vehicles. It will also include “assembly, production and development of military vehicles.”
Both parties also hope to eventually develop military systems jointly, “including for subsequent export from Ukraine.”
Rheinmetall CEO Armin Papperger expressed a desire to manufacture the company’s next generation Panther tank in Ukraine — up to 400 per year. Although still a prototype, the new tank would be the successor of the company’s Leopard 2 main battle tank.
Laura Kayali reported from Paris. Caleb Larson reported from Berlin.
WARSAW — Poland’s opposition held an enormous rally in Warsaw and other cities on Sunday — claiming more than a million people took part — but the mood two weeks ahead of the election is grim rather than triumphant.
That’s because the ruling Law and Justice (PiS) party has been holding on to a significant lead in the polls. POLITICO’s Poll of Polls has PiS at 38 percent while Civic Coalition, the main opposition grouping, is at 30 percent.
The Million Hearts march called by Donald Tusk, a former prime minister who heads the Civic Coalition, was supposed to lift the spirits of opposition supporters and show them that PiS — in power since 2015 — can be beaten.
“The impossible has become possible, when I see this sea of hearts, when I see these hundreds of thousands of smiling faces, I feel that this turning point in the history of our homeland is approaching,” Tusk told the crowd in Warsaw.
But the mood among the thousands of people streaming through the heart of the Polish capital — many waving red-and-white Polish or deep-blue EU flags — was more sober.
“I’ve had it up to my ears with the government of these awful people who are destroying my country,” said Kalina de Nisau, wearing a wrap made out of knotted EU and Polish flags. “But I’m not certain that this march will change the outcome. It’s very difficult.”
While Tusk and other party leaders were exhorting the huge crowd in Warsaw, PiS leaders were in Poland’s coal mining capital of Katowice to warn darkly of the dangers awaiting Poland if Tusk and his allies win on October 15.
Merkel and migrants
“If we succeed in beating [Civic Coalition] we’ll chase away Tusk. Where? To Berlin,” announced Prime Minister Mateusz Morawiecki, hitting on a popular PiS theme that Tusk is in cahoots with Germany to cripple Poland. He then called Tusk the “political husband” of former German Chancellor Angela Merkel.
He also accused Tusk of trying to organize a wave of illegal migrants into the EU, waving a sheaf of documents he said spelled out the scheme “in black and white.” PiS is trying to deflect the blowback from a growing bribes-for-visas scandal where Polish consulates are accused of issuing work visas for cash, and also of issuing huge numbers of visas to non-EU citizens.
Germany last week brought in heightened border controls on its frontiers with the Czech Republic and Poland to curb an influx of asylum seekers.
PiS also downplayed the scale of the opposition march — which may be the largest in Polish history.
Jarosław Kaczyński, the leader of PiS and Poland’s de facto ruler, denounced “powerful media” that support Tusk for exaggerating the size of the rally.
“They are able to say, for example, that there were a million people in Warsaw today, as Tusk said, although both photos and police statements state that there were 60,000,” Kaczyński said, quoting an unofficial police estimate. During the rally, the route of the march was 4 kilometers long and the eight-lane streets and sidewalks were densely packed with people.
Tusk seized on the size of the crowd to insist it shows a desire to break with PiS, which has seen years of bitter fights with Brussels over accusations it is backsliding on rule of law and democracy thanks to radical changes made to the justice system.
“It’s not about this being the largest political demonstration in European history,” Tusk said. “Europe lives in the hope that Poland will again become a 100 percent European country, democratic and free.”
But a PiS defeat in two weeks is going to need a very rapid change in fortunes for the opposition. Otherwise, PiS is likely to be the largest party, and will then have to hunt for partners to form a coalition that would see it ruling for an unprecedented third four-year term.
“I’m not very optimistic,” said Katarzyna Osuch, walking along with the sea of people in Warsaw. “I think PiS might continue ruling. … I’m very disappointed.”
BERLIN — The political maneuver shaking Germany’s postwar democratic order involves a piece of legislation that is about as mundane as it gets.
Center-right legislators in the eastern German state of Thuringia wanted to cut a local property tax by a small amount — and did so with the support of the far-right Alternative for Germany, or AfD.
The move broke with years of tradition in which mainstream parties have vowed to maintain a Brandmauer, or firewall, between themselves and the AfD, a party many in a country alert to the legacy of Nazism see as a dire threat to democracy. Even accepting the party’s support, the thinking goes, would legitimize far-right forces or make them salonfähig — socially acceptable.
And so, when parliamentarians from the conservative Christian Democratic Union, or CDU, passed the tax reduction on a late afternoon in September with AfD votes, it sent tremors across the country’s political landscape that still are reverberating.
“For me, a taboo has been broken,” Katrin Göring-Eckardt, a leader of the Greens who hails from Thuringia, said after the vote. “It shows me not only that the firewall is gone, but that there is open collaboration.”
For mainstream parties, and the CDU in particular, the question of how to handle the growing presence of far-right radicals in governing bodies from federal and state parliaments to local councils is likely to grow only more vexing.
That especially is the case in the states of the former East Germany, where the AfD now leads in polls at around 28 percent. Next year, the eastern states of Thuringia, Saxony and Brandenburg will all hold parliamentary elections. Polls show the party leading in all three states.
The AfD is likely to expand its presence in the parliaments of Bavaria and Hesse when those states vote on Sunday. In Hesse, the AfD is coming close to overtaking German Chancellor Olaf Scholz’s center-left Social Democratic Party, according to the latest polls.
The dilemma facing mainstream parties is clear. To work with the AfD means to normalize a party that many believe seeks to subvert the republic from within. But to ostracize the party only alienates its many voters.
The firewall also serves as an unintended political gift, allowing the AfD to depict itself — at a time of high dissatisfaction with mainstream parties — as the clear choice for those who want to send a burn-it-down message to the country’s political establishment.
At the same time, the controversy over the latest vote in Thuringia seems to have played into the AfD’s hands, allowing the party to depict itself as seeking to uphold rather than undermine democracy.
The “‘firewall’ is history — and Thuringia is just the beginning,” AfD party leader Alice Weidel posted on X, formerly Twitter, after the vote. “It’s time to respond to the democratic will of citizens everywhere in Germany.”
Historic fears
Germany’s political leaders are all too aware that the Nazi seizure of power began with democratic electoral success. In fact, it was in Thuringia where, in 1930, the Nazi party first took real governing power in coalition with conservative parties.
The “‘firewall’ is history — and Thuringia is just the beginning,” AfD party leader Alice Weidel posted on X, formerly Twitter, after the vote. “It’s time to respond to the democratic will of citizens everywhere in Germany” | Christof Stache/AFP via Getty Images
That fact was not lost on the CDU’s opponents.
“German conservatism has already been a stirrup holder of fascism,” Janine Wissler, a head of the Left party, told the German Press Agency after the vote. “Back then, too, it started in Thuringia,” she added. “Instead of having learned from that, the CDU is going down a path that’s as dangerous as fire.”
CDU leaders in Thuringia deny the vote on the tax reduction means the firewall is crumbling. They say there was no cooperation with the AfD ahead of the vote (though AfD members say there were discussions between lawmakers).
“I cannot make good, important decisions for the state that provide relief for families and the economy dependent on the fact that the wrong people might agree,” Mario Voigt, the head of the CDU in Thuringia said after the vote.
Friedrich Merz, the national leader of the CDU, has sent mixed signals on the firewall — or at least on what exactly the firewall means. Merz says the CDU will not form coalitions with the AfD but he’s been less clear on whether the CDU will work with the party in other ways.
In a television interview over the summer, he seemed to suggest working with the AfD on the local level was all but inevitable.
Friedrich Merz, the national leader of the CDU, has sent mixed signals on the firewall | Tobias Schwarz/AFP via Getty Images
“We are of course obliged to accept democratic elections,” he said. “And if a district administrator, a mayor is elected there who belongs to the AfD, it’s natural that you look for ways to then continue to work in this city.”
After an uproar ensued, Merz walked back the comment. “There will be no cooperation between the CDU and the AfD at the municipal level either,” he posted on X, formerly Twitter.
After the vote in Thuringia, Merz stood by the CDU leadership of the state. “We don’t go by who agrees, we go by what we think is right in the matter,” he said on German television.
Even some within his own party do not see things that way. Daniel Günther, the CDU premier of the northern state of Schleswig-Holstein, sharply criticized his party colleagues in Thuringia. “As a conservative, I must be able to say plainly and simply the sentence, ‘I do not form majorities with extremists,’” Günther said.
‘Cordon sanitaire’
It’s not the first time Thuringia has been at the center of a controversy over the firewall. In 2020, a little-known politician in the pro-business Free Democratic Party, Thomas Kemmerich, was elected state premier with the support of the CDU and AfD. Then-Chancellor Angela Merkel weighed in to call the vote “unforgivable.”
In the furor that followed, Kemmerich resigned as did the then-head of the CDU faction in the state. But given the AfD’s large presence in the local parliament, the issue was bound to resurface.
It’s not the first time Thuringia has been at the center of a controversy over the firewall | Christof Stache/AFP via Getty Images
The problem is far from Germany’s alone. Mainstream parties are under growing pressure due to the rise of the radical right across Europe.
In France, parties from across the political spectrum have formed a cordon sanitaire, or sanitary cordon, to keep Marine Le Pen, a leader of the far-right National Rally, out of the presidency. But with Le Pen’s party now the biggest opposition group in the National Assembly, the cordon is getting harder to maintain.
In the European Parliament, where a similar cordon has been erected, the center-right European People’s Party has been openly courting the European Conservatives and Reformists, home to Poland’s nationalist Law and Justice party and Italian Prime Minister Giorgia Meloni’s far-right Brothers of Italy party.
In Thuringia, the stakes are even higher as the local branch of the AfD contains some of the party’s most extreme members. State-level intelligence authorities tasked with surveilling anti-constitutional groups have characterized the party’s local branch as extremist.
The leader of the AfD in Thuringia is Björn Höcke, who is set to face trial for using banned Nazi rhetoric. (In 2021, he closed a speech with the phrase “Alles für Deutschland!” or “Everything for Germany!” — a slogan used by Nazi stormtroopers.)
Höcke railed against Holocaust remembrance in Germany and warned of “Volkstod,” the death of the Volk, through “population replacement.” For such views, German courts have ruled that Höcke could justifiably be referred to as a fascist or Nazi.
GERMANY NATIONAL PARLIAMENT ELECTION POLL OF POLLS
WARSAW — The campaign language ahead of this year’s Polish general election is apocalyptic — painting it as an existential battle for the soul of the EU’s fifth most populous country — but the likeliest outcome is a chaotic stalemate.
If the ruling nationalist Law and Justice (PiS) hangs on to power for a third term there isn’t much more it can do to wreck Poland without quitting the EU — and there’s little prospect of that. If the opposition pulls off a stunner and wins it will be so hemmed in by PiS-controlled courts and institutions and by a hostile president that it won’t be able to do much more than tweak the optics rather than surgically remove the growths added by Law and Justice.
Internationally, Poland is too important to be kept in the deep freeze forever; with a fast-growing economy, a big military and a key role in supplying Ukraine, it is no Slovakia. A PiS win will mean greater efforts to find some accommodation with Warsaw; an opposition victory will dramatically improve the atmosphere, but there are limits to even an opposition-ruled Poland’s coziness on many issues that are key to the EU.
An opposition victory could weaken PiS’s institutional advantages that it’s been using to skew the playing field in its favor — potentially leading to a longer-term shift away from the right-wing party that’s dominated Polish politics for the past eight years. But it’s no quick fix.
According to PiS, opposition leader Donald Tusk is a disloyal Pole who is working on behalf of both Germany and Russia to turn the country into a puppet state by letting in hundreds of thousands of migrants.
Oh, and he also wants to raise the retirement age.
Jarosław Kaczyński, the PiS chief and Poland’s real ruler, thundered to his supporters on Sunday: “Donald Tusk had to agree to make Poland subservient to Germany and therefore to Russia.”
“Stop Tusk. Only PiS can ensure Poland’s security,” trumpets an election ad.
For the opposition, led by Tusk’s Civic Coalition, another four-year term with Law and Justice at the helm means real danger for the future of Poland as a democratic country, as well as undermining the rights of women thanks to a draconian abortion law and an LGBTQ+ minority subjected to attacks by ruling party officials.
“Law and Justice is poison,” Tusk said at a campaign rally this summer. “Every day, every month they are in power is a growing threat to our security.”
Those fighting words are designed to budge the electorate; POLITICO’s Poll of Polls shows PiS at 37 percent while Civic Coalition is at 30 percent — meaning any new government is going to require cobbling together a coalition with smaller parties.
Polish Deputy Prime Minister and leader of the Law and Justice (PiS) ruling party Jarosław Kaczyński has promised that if his party wins, he’ll continue the judicial system changes that have so distressed the EU | Marian Zubrzycki/EPA-EFE
It’s not all rhetorical spin.
“There is always a tendency to say this is the most important election since 1989 [the election that ended communist rule], but this time there is a somewhat stronger case for making that argument. The level of polarization is evidence for that,” said Aleks Szczerbiak, a professor of politics at the University of Sussex in the U.K.
High stakes
The outcome is going to be watched very closely, from Brussels to Kyiv.
For the European Union, the hope is that if PiS is ousted Poland will return to the ways of Tusk, who served as Polish prime minister during a remarkable era of comity with the EU and with Germany before going on to become president of the European Council. As an added sweetener, Brussels will likely quickly move to release €36 billion in loans and grants from the bloc’s pandemic recovery fund held up over worries that PiS’s court system reforms undermine judicial independence.
The EU court cases, parliamentary resolutions, infringement procedures and Article 7 effort to strip Poland of its voting rights would also likely be shelved.
The German government would also sigh with relief at seeing the back of a government that has fiercely needled Berlin at every occasion and also called for up to $1.3 trillion in compensation for the destruction caused by the Nazi occupation; although the opposition hasn’t cut itself off from that demand.
Poland has been one of Ukraine’s fiercest advocates during the war — sending tanks and jet fighters ahead of most other countries, offering diplomatic support, receiving millions of refugees who fled the early days of the war, and serving as the main transshipment point for weapons and other aid heading east.
But the election campaign has soured that relationship.
Warsaw led the charge in blocking Ukrainian grain exports, worried it would undercut Polish prices and harm farmers — a key voting bloc. When Ukrainian President Volodymyr Zelenskyy dared to criticize Poland at the U.N., a furious President Andrzej Duda compared Ukraine to a drowning man who poses a danger to his rescuers.
“We say to the Ukrainian authorities — do not do what goes against the interests of Polish farmers,” lectured Prime Minister Mateusz Morawiecki, who said last month that Poland would stop sending weapons to Ukraine while it rebuilt its own stocks.
Poland’s Foreign Minister Zbigniew Rau skipped this week’s summit in Kyiv. Getting relations back on an even keel will take “a titanic effort,” he said.
Tusk promised a reset: “We cannot allow good Polish-Ukrainian relations to depend on the negligence and chaos created by the Polish government.”
Polish opposition leader and former premier, Donald Tusk addresses participants of a rally in Warsaw on October 1, 2023 | Wojtek Radwanski/AFP via Getty Images
A PiS victory will send shock waves across Europe.
Hungarian PM Viktor Orbán, Kaczyński’s closest ally, has been building his illiberal democracy for over a decade. With Rome governed by right-winger Giorgia Meloni, Slovakian populist Robert Fico scoring a victory in last week’s election, and the far-right Alternative for Germany party rising fast in the polls, the signal is that the right is gaining strength across the Continent.
That’s likely to further erode the tenuous hold on power of centrist parties in the European Parliament in next year’s election.
It will also block any chance of agreeing on a migration pact to tackle the thousands of people crossing EU borders and kill any effort to reform EU institutions ahead of an expansion to Balkan countries and Ukraine.
“A PiS government will block reforms on issues like taxation and foreign policy that threaten the national veto right. There is also a different approach to migration,” warned a senior Polish government official who spoke on condition of being granted anonymity. “We have another model of the European Union.”
Reality bites
However, despite the rhetoric, the reality is that the election is unlikely to mean a radical worsening of relations between Warsaw and Brussels.
Kaczyński has promised that if his party wins he’ll continue the judicial system changes that have so distressed the EU, after admitting that the reforms made so far haven’t worked. He vowed: “This time it will succeed.”
But his party has already sent out peace feelers to Brussels, trying and so far failing to backtrack on some changes to top courts to get the Commission to release the blocked funds.
If Law and Justice wins a third term, EU institutions will have to decide whether they want to continue the confrontation, or else make peace with a Poland that has firmly chosen a populist course.
“It takes two to tango. Maybe there will be a will to compromise on both sides,” said the Polish government official.
Permanent ostracism is also untenable, as Hungary showed this week by playing a skillful game of getting the EU to release blocked funds to avoid Orbán vetoing aid for Ukraine.
Despite opposition charges that PiS wants to pull Poland out of the EU in a Polexit — a cry from parts of the far right — Law and Justice says it has no intention of following the U.K. out of the bloc.
The results of the Polish general election could influence the upcoming European Parliament election and Poland’s presidential election in 2025 | Wojtek Radwanski/AFP via Getty Images
“PiS’s direction has always been toward the EU,” said PiS MP Radosław Fogiel.
And an opposition-led Poland would also be no easy partner for Brussels. After the initial flush of warmth, perennial problems will return like Poland’s continued addiction to coal-fired power, its reluctance to join the euro, and a suspicion of large flows of migrants — also voiced by Tusk during the campaign.
“Even if there is a change of government, there will still be very strong public opposition to a change in migration policy,” said Jacek Czaputowicz, a former foreign minister under the PiS government, speaking at the Warsaw Security Forum.
Poland’s large and powerful farming sector will be a huge issue for Ukrainian grain exports and for future efforts to recalibrate the EU to accommodate new and poorer members.
Ukrainian politicians hope that the war of words with Warsaw will die down after the election.
“War is exhausting for Ukraine and for Poland too, so emotions are felt on both sides, in addition, the election campaign in Poland, that tends to politicize everything, even economic issues,” said Andriy Deshchytsia, former Ukrainian ambassador to Poland, adding: “However, the Russian threat is still here, just like a year ago … so we don’t have any other choice but to sit and search for a compromise.”
As bad as it gets
At home, the election is also unlikely to have the earth-shattering impact that’s being voiced during the campaign.
PiS has done a lot of damage over the last eight years, and it’s difficult to see how much more it can do while still remaining a member of the EU. The state media is a Euro-lite version of North Korea, state-controlled corporations are stuffed with party hacks, the highest courts are firmly under political control, much of the Roman Catholic Church functions as a PiS acolyte, the police don’t mind clubbing the occasional opposition protester, the prosecutor’s office has become a political plaything — dropping investigations of the well-connected while fiercely pursuing the regime’s opponents.
But expanding that control will be difficult in an economy that has a large and vibrant private sector, a strong civil society and hefty private media.
Non-government media operators are owned by foreign companies that have shown no sign of backing out of the Polish market; an earlier effort to tangle with American-owned TVN, the country’s largest private television network, was quickly slapped down by Washington.
The EU is also working on a rulebook that aims to secure media independence against political pressure and foster pluralism; Commission Vice President Věra Jourová warned it “will be a major warning signal for member states.”
An opposition win would dramatically change the optics with Brussels, and a new government would scrap further legal changes to courts. But any effort to roll back those reforms, and any other PiS legislation, will run into a significant hurdle: President Duda.
There is a chance that Poland’s President Andrzej Duda will cooperate, as Tusk has threatened to prosecute him for violating the constitution | Leon Neal/Getty Images
There is no poll predicting an opposition win so gigantic that it would gain a two-thirds majority of MPs needed to overturn presidential vetoes. The country’s top courts are filled with judges appointed by the current government, meaning legislation will also be caught up in endless litigation.
“Even if they win an outright majority, which doesn’t look likely at the moment, this is an internally divided opposition and they face a president who will be able to veto their legislation,” said Szczerbiak.
However, there is a chance that Duda will cooperate, as Tusk has threatened to prosecute him for violating the constitution.
“Duda is a dealmaker,” said Wawrzyniec Smoczyński, a political analyst and president of the New Community Foundation. “Tusk is a big risk for him and the way to lessen that is to strike a deal.”
If Duda doesn’t play ball, a non-PiS government could be limited to purging state companies, the government and the media of PiS loyalists.
“Overnight you will get the public media back. Everyone will be booted out of there,” Tusk pledged.
Those small steps are unlikely to satisfy opposition backers yearning for revenge against Law and Justice and a clean break with the last eight years.
“For Poland, it’s all fucked up,” said Paweł Piechowiak, taking part in last week’s massive opposition march in Warsaw while waving huge Polish and EU flags, his cheeks painted in rainbow colors. “You can’t wreck this country any more than it is.”
But those personnel changes may have longer term consequences by switching public media away from backing PiS, which could undercut that party’s base of support in rural and small-town Poland.
That could change the political dynamic, especially if the next government is short-lived and there is an early election; it could also influence the upcoming European Parliament election and Poland’s presidential election in 2025.
“The parliamentary election could be viewed as the first round of a longer campaign,” said Szczerbiak.
Veronika Melkozerova contributed reporting from Kyiv.
Troubled Man United travel to Munich, Arsenal mark Champions League return by hosting PSV, last year’s finalists Inter Milan take on Real Sociedad.
A highly anticipated match between European giants Bayern Munich and Manchester United headlines the eight-match lineup in the UEFA Champions League on Wednesday.
The Champions League returned on Tuesday with Manchester City, Barcelona and Paris Saint-Germain among notable winners.
Here are the five matches to watch out for on Wednesday:
Bayern Munich vs Manchester United
Where: Allianz Arena, Munich When: 19:00 GMT
Manchester United will be without injured defenders Harry Maguire and Aaron Wan-Bissaka as they face a daunting trip to Munich. Erik ten Hag’s team have not started the season well with three losses in five league games.
Bayern, who have won 11 Bundesliga titles in a row, will measure their success this season on how far they progress in the Champions League. Harry Kane will make his tournament debut with his new club against his former English rivals.
After qualifying for the Champions League for 19 straight years under Arsene Wenger, Arsenal had to wait six years to get back into the competition.
It’s clear the team has been looking forward to this moment: The tournament’s famous anthem was blaring from the speakers in the gym at the club’s training centre this week, according to striker Gabriel Jesus.
PSV have won all four of their league games so far and scored 13 goals while conceding just one in that stretch.
Real Madrid vs Union Berlin
Where: Santiago Bernabeu Stadium, Madrid When: 16:45 GMT
Real Madrid will be without right back Dani Carvajal and forward Vinicius Junior against tournament newcomers Union Berlin at the Santiago Bernabeu Stadium.
The record 14-time European champions are making their 27th consecutive appearance in the competition’s group stage while Union Berlin are making their tournament debut.
Where: Braga Municipal Stadium, Braga When: 19:00 GMT
Italian champions Napoli blew their opponents apart in last year’s group stage – winning five of their six matches and scoring 20 goals in a fantastic season for the club.
Portuguese side Braga lost at the weekend after a draw and a win. Their last Champions League appearance came in 2012 when they won just one of their group stage matches.
Where: Anoeta Stadium, San Sebastian When: 19:00 GMT
Last season’s runners-up, Inter Milan, head into their Champions League opener at Real Sociedad off a 5-1 win over city rivals AC Milan in the derby on Saturday as they maintained a perfect start to the season.
However, one of Inter’s key players, midfielder Hakan Calhanoglu, has been ruled out of the trip to Spain with a thigh strain.
Sociedad lost at Real Madrid at the weekend after drawing their first three matches. This is Sociedad’s first season in the Champions League in 10 years. The last time they made it out of the group stage was in the 2003-04 season.
Akbar al-Baker says he was surprised by the rejection given the airline was ‘so supportive of Australia’ during the pandemic.
The Australian government’s decision to block Qatar Airways’s request for extra flights to Australia was “very unfair”, the airline’s CEO Akbar al-Baker has told CNN in an interview.
“We found it to be very unfair [for] our legitimate request to be not granted, especially at a time when we were so supportive of Australia,” al-Baker said on Sunday, adding that he was “very surprised” at the decision.
“[We were] repatriating their stranded citizens from around the world to and out of Australia, helping them receive medical supplies and spare parts etc. during the COVID-19 period,” al-Baker said. “The national carrier and its partners completely stopped operating in Australia. We were there for the people of Australia.”
The Doha-based airline had requested to fly an extra 21 services into Australia’s major airports. But Australia’s Transport Minister Catherine King in July formally rejected its bid to add flights to Sydney, Melbourne and Brisbane, saying the proposal was not in Australia’s interests.
During the pandemic, Qatar Airways flights to Australia continued, transporting as few as 20 people per flight, while flights from Qantas, Australia’s national airline, were grounded.
“I am always hopeful for the government to listen to our case very carefully and then make a decision,” the Qatar Airways CEO said, adding that it is difficult for him to comment as an Australian parliamentary inquiry was under way to look into the government decision on Qatar Airways.
“We have full confidence in the government, in the Senate and in the parliament,” al-Baker said.
Accusations
Earlier this week, Australian Deputy Prime Minister Richard Marles said he was not consulted when the country’s transport minister decided to block Qatar Airways’s request.
Last week King, the transport minister, said that “the context” for her decision to not grant Qatar Airways more flights was linked to invasive body searches conducted on a group of Australian women at Doha’s Hamad International Airport in Qatar.
In October 2020, more than a dozen female passengers were subjected to “invasive” and “humiliating” internal exams in Qatar after a newborn infant was found abandoned at the airport.
King’s decision faced intense political scrutiny and she was accused of protecting Qantas, whose former chief executive, Alan Joyce, claimed that allowing Qatar the extra capacity would “distort” the local aviation market.
The airline, which has admitted to lobbying against the Qatar Airways bid, has also faced criticism over a series of recent controversies, including allegations it sold about 8,000 tickets for flights it knew had already been cancelled.
Public anger towards the Australian carrier – which controls more than 60 percent of the domestic market – culminated in the stepping down of Joyce.
The leader of the National Party of Australia and chair of the government inquiry into the decision, Bridget McKenzie, openly accused the government of protectionism.
“I believe they are running a protection racket for Qantas,” McKenzie said while speaking to Sky News.
When merry revelers from around the world lift their beer steins to mark the start of Oktoberfest in the Bavarian capital Munich, they might want to sip slowly, given they will now be paying €13.75 ($14.67) per liter.
That’s based on an analysis from a team at Berenberg, who provided this chart showing the soaring cost of beer at the Munich Oktoberfest compared with other consumer and food inflation measures:
The globally famed festival is due to kick off this Saturday. And while the cost keeps rising, the celebratory large glass of Bavarian beer —- served in a stoneware mug known as a Maß, or stein — often doesn’t seem to reach the required 1-liter mark once the foam has settled, notes Holger Schmieding, chief economist, who led the report.
“Do not even try to compare the price per liter to the cheap beer cans available at the discount retailers nearby. The difference might make some crave a stiffer drink to drown the financial pain,” he and his team said.
Citing data from German price statistics dating back to 1991, Berenberg’s economists said the price of an Oktoberfest beer has soared at an annual average rate of 3.9%, well above the annual 2% rise in inflation and the 1.8% rise paid for beer sold by retailers.
However, more recently the pain may have eased some. Schmieding said the price of that beer rise versus 2022 is just 4.2%, which is below the average food price rise of 9%. And German wages rose 6.6% on an annual basis in the second quarter of this year, meaning some might this year find those steins slightly little more affordable, once they get past the sticker shock.
The country has felt the fallout from Russia’s invasion of Ukraine and soaring energy and food prices, which propelled inflation to a postwar high of 7.9% in 2022. Wage earners are currently recouping some of lost purchasing power, but Schmieding and his team warn this won’t last.
“In a lagged response to lower headline inflation and the modest rise in unemployment that we project for the next two quarters, German wage gains will likely slow down to 4% yoy by the time of the next Oktoberfest in September 2024, and the less volatile rise in beer prices at the party will likely outpace inflation and wages again,” they wrote.
The European Commission recently forecast that Germany, the bloc’s biggest economy, will be the only major one to see growth contract this year, with a forecast for gross domestic product to fall 0.4% in 2023. Weak industrial output has been a major factor in sluggish growth. Inflation for the EU bloc is expected to fall to 2.9% next year, slightly under the 2.8% previously forecast.
The European Central Bank on Thursday hiked its deposit rate by 25 basis points to an all-time high of 4% as it battles inflation for the region which it expects will average 5.6% this year, well above its 2% target.
Schmieding and the team say Germany, however, does not deserve the “sick man of Europe” title, which it last held in the 1990s, that some have slapped on it.
The country is, though, “nursing a collective hangover” after celebrating its “golden decade” between the global financial crisis and the pandemic onset too hard, with early retirement plans, expanded welfare benefits and too much dependence on Russian energy, they say.
NATO Secretary-General Jens Stoltenberg warned that the war Russian President Vladimir Putin is waging on Ukraine won’t be over any time soon.
“Most wars last longer than expected when they first begin,” Stoltenberg in an interview with Germany’s Funke media group published Sunday. “Therefore we must prepare ourselves for a long war in Ukraine.”
“We all want a quick peace,” said Stoltenberg. “At the same time, we must recognize that if [Ukrainian President Volodymyr] Zelenskyy and the Ukrainians stop fighting, their country will no longer exist. If President Putin and Russia stop fighting, we will have peace.”
The head of Ukraine’s Security Council Oleksiy Danilov, in an opinion piece published Saturday evening, said the only way to end the war is if Kyiv’s allies speed up deliveries of weapons. “Refusing or delaying the transfer of modern weapons to the Ukrainian armed forces is a direct encouragement to the kremlin to continue the war, not the other way around,” Danilov said.
The Ukrainian military meanwhile continued its counteroffensive, with drone attacks targeting Crimea and Moscow on Sunday, according to Russia’s defense ministry. The attacks disrupted air traffic and caused a fire at an oil depot.
In southwestern Russia, a Ukrainian drone damaged an oil depot early Sunday, sparking a fire at a fuel tank that was later extinguished, the regional governor said. Another drone was downed in Russia’s Voronezh region.
Sunday also saw Russian missiles hit an agriculture facility in Ukraine’s Odesa region, according to Ukraine’s military.
Meanwhile, two cargo ships arrived at a Ukrainian port after travelling through the Black Sea using a new route, Ukrainian port authorities said. They reached Chornomorsk over the weekend, and were due to load 20,000 tons of wheat bound for world markets, the BBC reported. Officials said it was the first time civilian ships had reached a Ukrainian port since the collapse of a grain deal with Russia ensuring the safety of vessels.
Separately, the International Court of Justice — the United Nations’ highest court — will on Monday hear Russia’s objections to a case brought by Ukraine, who argues Russia is abusing international law in claiming the invasion was justified to prevent alleged genocide. Reuters reports the hearings are set to run until September 27.
PARIS — French President Emmanuel Macron missed the boat on Ukraine.
Faced with Russia’s military build-up and subsequent invasion of its neighbor, Macron dove down a rabbit hole of fruitless talks with Vladimir Putin. At a moment when he could have taken the helm as the leader of Europe, he miscalculated and failed to seize the political initiative.
Instead, in Europe, it was the likes of the Euroskeptic British premier Boris Johnson who took the lead on rallying support for President Volodymyr Zelenskyy and providing arms. While Johnson was a hero in Kyiv, Macron infuriated the Ukrainians by insisting that Putin should not be humiliated and suggesting that Moscow deserved “security guarantees.” Ukraine, the French president said, was “in all likelihood decades” from joining the EU.
But a sea change has taken place in Paris since. The French president has now picked up the mantle as one of Ukraine’s strongest allies, pledging support “until victory,” seeking to lead on issues such as NATO membership and military support, just as Europeans fret that U.S. support is flagging, with increasing concerns that a potential Donald Trump presidency could deprive Ukraine of its most important ally.
“Macron was fixated by the idea of playing a mediation role between Putin and Zelenskyy. And this meant he was extremely prudent when it came to arms deliveries,” François Heisbourg, senior adviser to the International Institute for Strategic Studies said. But early this year “Macron finally understood that Putin was taking him for a ride, and wasn’t interested in negotiating,” he added.
French diplomats, however, won’t go further than to say the president “has clarified” his position on Ukraine.
Where the French have broken most significantly from their long-standing position is on the issue of EU enlargement. Beyond the war in Ukraine, France is now seeking new allies, wants to lead on enlargement and is war-gaming how an enlarged EU would work. There is frenetic diplomatic activity behind closed doors in Paris and beyond. The French government is leading consultations and testing red lines ahead of a big speech Macron is set to give early next year, setting out his ambitions for enlargement that has already been dubbed “Sorbonne bis,” according to several French officials, in a reference to a policy-setting Europe speech Macron gave at the Sorbonne University in 2017.
Change of heart
For months following Russia’s full-scale invasion of Ukraine last year, the French president appeared to zig-zag on how to deal with Russia. Putin was a personality he had struggled to read. In a 2019 interview with the Economist, Macron mapped out a picture of how he reckoned a logical Putin would ultimately come to the realization that he would need to form “a partnership project with Europe.” It was a generous vision of Putin’s mindset that underestimated the gnawing historical primacy of the Ukraine question.
In December last year, Macron’s U-turn started to become more evident. He gave a forceful speech saying he would support Ukraine “until victory.” Only a couple of weeks earlier he had stated that the West should give Russia “security guarantees.”
In May this year, Macron hinted at a new awareness, telling Central and Eastern Europeans in Bratislava that he believed France “had sometimes wasted opportunities,” and failed to listen to their memories of Soviet brutality.
That same month, France gave the U.K. permission to export Franco-British Storm Shadow cruise missiles to Ukraine, which was followed by deliveries of French long-range SCALP-EG cruise missiles. According to Heisbourg, it was a decisive signal, because France was doing what the U.S. has so far refused to do.
But Macron’s previous diplomatic serenades toward Putin have left their mark. According to a French diplomat, Macron “shot himself in the foot” in making too many overtures to Moscow, telling reporters that “Russia should not be humiliated.” In the early months of the war, “it overshadowed what we did do, the military support, the European unity,” said the diplomat who like others quoted here was granted anonymity to talk candidly about a sensitive matter. Another French diplomat put it more bluntly: “Macron missed his Churchillian moment.”
Ukrainian President Volodymyr Zelenskyy and French President Emmanuel Macron in Paris on May 14, 2023 | Ludovic Marin/AFP via Getty Images
Macron’s government is now firing on multiple fronts in favor of Ukraine: EU enlargement, military support and NATO. This month, the French presidency announced they were opening talks with Ukraine to sign a bilateral security agreement following the NATO summit in Vilnius.
“We are not naïve, we took a big step … but we are not kidding ourselves that people will think France has changed overnight,” said a third French diplomat.
Speeding up on enlargement
As recently as 2019, Macron was opposed to opening membership talks with North Macedonia and Albania.
“France has never been anti-enlargement, but it has always been prudent about it,” said Georgina Wright, Europe director at the Paris-based Institut Montaigne. “France has always said the EU must deepen before it can widen, because there was a fear by enlarging the EU would become more dysfunctional,” she said.
But in a recent speech, Macron called for “boldness” in embracing enlargement, floating the idea of a “multispeed Europe” to keep up the drive toward greater integration.
For France, the change is also set against the realization that the Balkans and Moldova — not just Ukraine — are on the front lines of a hybrid war against Russia.
“There’s a real awakening that we are on the eve of a historic moment, similar to the Fall of the Berlin Wall, with a new wave of EU enlargement …which will help stabilize the Continent,” said Benjamin Haddad, an MP for Macron’s Renaissance party.
But the change of heart may also boil down to some hard-nosed political calculus. France’s initial diplomatic initiatives with Putin alienated Central and Eastern Europeans. With talk of the center of gravity shifting eastward, France needs support beyond its traditional allies such as Germany, Italy and Spain, if it wants to influence the change it now sees as inevitable.
Getting political
With the European election looming next year, France is gearing up for a battle of opposing visions, between Europhiles arguing the EU protects citizens and populists shining a spotlight on the Union’s failings.
In France, where the far-right National Rally is riding high in the polls, and most recently the former French President Nicolas Sarkozy slammed ambitions to bring Ukraine into the Union — an anti-enlargement position held by several French political heavyweights before him, the fight is expected to be bloody.
Haddad says his camp will argue that the EU, even enlarged, will protect citizens against the upheavals of the world: the war in Ukraine, “a predatory China,” and a possible Trump presidency. “If the far right had been in power … Russia would be occupying all of Ukraine,” he said.
But what may also undermine Macron’s new drive is what Heisbourg calls “the temptation towards mediation,” adding that the French president failed to recall France’s policy on Taiwan during a visit to Beijing, in a bid to get China to play a mediation role with Russia.
“This temptation makes our partners skeptical despite the real and profound change [in France], the fear is that we might return to our old ways,” he added.
MANILA, Philippines (AP) — There will be no gold medal for the U.S. at this World Cup. And for the second consecutive time in FIBA’s biggest tournament, there might not be any medal at all for the Americans.
Instead, it’s Germany on the cusp of a world title.
Andreas Obst scored 24 points, Franz Wagner added 22 and Germany shredded the U.S. defense for much of the way in its first win over the Americans — 113-111 in the World Cup semifinals on Friday night.
Obst hit the shot of the night, a 3-pointer with 1:15 left to put Germany up by four and just about snuff out a last-ditch U.S. rally. Germany led for 30 of the game’s 40 minutes, the U.S. led for about 4 1/2, and there was little question who was controlling play much of the way.
“We knew the task at hand, and that was to go win,” U.S. guard Austin Reaves said. “And we didn’t do that.”
The U.S., down by 10 midway through the fourth, nearly pulled off a comeback, getting within one point on two separate occasions in the final minutes. But the Americans never got the lead, and it was the Germans jumping and hugging as time expired.
Germany — the last unbeaten team left in the tournament at 7-0 — will play Serbia on Sunday (8:40 a.m. EDT) for the World Cup title. Serbia beat Canada in the first semifinal, getting to its second World Cup final in the last three tournaments; it lost 129-92 to the U.S. in the 2014 championship game.
Players form the United States walk off the court ofter their loss to Germany in a Basketball World Cup semi final game in Manila, Philippines, Friday, Sept. 8, 2023. (AP Photo/Michael Conroy)
Canada will play the U.S. for bronze Sunday (4:40 a.m. EDT).
Anthony Edwards scored 23 points for the U.S. (5-2), which got 21 from Reaves, 17 from Mikal Bridges and 15 from Jalen Brunson. The Americans shot 58% — but let Germany shoot 58% as well, and that was the ultimate undoing.
“If you give up 113 points in a 40-minute game, you’re not going to win many of those,” Reaves said.
Germany had been 0-6 against the Americans in World Cup or Olympic competition, usually getting blown out in those games.
Not this time. Once again, even bringing the only roster filled with all NBA players wasn’t enough for the U.S. at the World Cup. The Americans finished seventh at the 2019 World Cup in China; this finish — third or fourth — will technically be better, but nothing other than gold was going to be satisfactory for USA Basketball.
Daniel Theis had 21 points for Germany. Theis has scored 21 or more points six times in his NBA career — and picked Friday for one of the games of his life.
A 35-24 third quarter was basically the difference for Germany, which this time finished the job that it couldn’t pull off when meeting the Americans in Abu Dhabi for an exhibition earlier this summer. Germany led that game by 16 in the second half, then an 18-0 run by the Americans down the stretch led to a 99-91 U.S. win.
It needed similar heroics this time. They almost got there. Key word: almost. This time, Germany finished it off. And when it was over, Reaves couldn’t help but see Schroder — his former teammate with the Los Angeles Lakers — revel in a huge moment for German basketball.
“Tip your hat to him,” Reaves said. “I know how special this moment is for him.”
A Polestar 4 electric SUV is on display during the 20th Shanghai International Automobile Industry Exhibition at the National Exhibition and Convention Center (Shanghai) on April 18, 2023 in Shanghai, China.
Meizu is not a major smartphone player in China with companies like Apple and Oppo among the biggest. And the Polestar smartphone would not be an attempt to grow market share.
Instead, the unusual step of an EV company launching a smartphone comes from a desire from automakers to make the car like a mobile phone on wheels.
“Where you have an opportunity to link these two worlds, without any border … then you can really have a seamless transition,” Ingenlath said.
You can imagine a world where you’re using an app on your phone and you enter the car and that same app is displayed on the car’s dashboard screen, for example.
“I still have problems to get, you know, an SMS displayed,” Ingenlath said of the frustrations with current technology.
Ingenlath added that the phone will be a “premium” device. Meizu is known in China for more mid-tier devices. This will help Meizu push into the high-end device market for handsets too, Ingenlath said.
While it is still unusual for car companies to launch phones, the idea is gaining some traction. Chinese EV start-up Nio plans to launch its first self-developed mobile phone in September.
There are lots of reasons this could make sense specifically in the world’s second largest economy.
It’s not just good enough to bring a great European design to China, you have to be very, very special about what you offer to the market when it comes to software.
Thomas Ingenlath
CEO of Polestar
Firstly, there is no Google Android mobile operating system. This means that automakers can customize the operating system on their phone and the car to sync up. For example, Meizu has its own operating system called FlyMe. And the company is making an operating system for Polestar cars based on this.
The smartphone that Polestar releases is also likely to have a similar OS which will make integration seamless.
“It’s not just good enough to bring a great European design to China, you have to be very, very special about what you offer to the market when it comes to software,” Ingenlath said.
“Many OEMs are following Geely and potentially other future players such as Apple if they come up with their own car with their smartphone to provide a holistic and tighter connected experience in every aspect of mobility,” Neil Shah, vice president of research at Counterpoint Research, told CNBC.
An OEM is an original equipment manufacturer and refers to car manufacturers.
Shah said the smartphone would also allow Polestar to bundle software, apps, services and features such as remotely controlling or turning on the car with a phone.
Launching a phone could also help carmakers learn more about their customers’ habits, Shah added.
The Polestar 4 is on sale in China for 349,800 Chinese yuan ($47,890) — that’s more expensive than Tesla’s Model Y which starts at 263,900 yuan.
The Polestar 4 is being positioned as “more premium, more luxurious” than the Model Y, Ingenlath said.
The CEO said Polestar’s customers come from German carmakers BMW and Mercedes-Benz and that the car is being positioned more as a competitor to cars like the Porsche Macan.
A sign is seen in a stand during the Bitcoin Conference 2023, in Miami Beach, Florida, U.S., May 19, 2023.
Marco Bello | Reuters
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Dip in markets U.S. markets were closed Monday for the Labor Day holiday. The pan-European Stoxx 600 was flat, but major bourses dipped slightly and ended the day in the red. Germany’s DAX lost 0.1% as new data showed the country’s July exports dropping 0.9% on the month and 1% year on year, adding to fears about the German economy contracting in the third quarter.
‘Sick man of Europe’ Germany is once again the “sick man of Europe,” said Hans-Werner Sinn, president emeritus at the Ifo institute. The country’s business activity in August contracted sharply, according to the HCOB flash purchasing managers index. Moreover, Germany’s plans to be carbon neutral by 2045 poses a risk to its industry, which might cause a “backlash” from the population, Sinn said.
Missing Xi at G20 Premier Li Qiang will lead China’s delegation at the G20 summit in New Delhi this weekend, said China’s foreign ministry. While the ministry declined to confirm if President Xi Jinping would attend the summit, spokesperson Mao Ning didn’t correct reporters who asked if Li’s attendance meant Xi would not show up. Another noteworthy absence: Russian President Vladimir Putin.
Negotiating new grain deal Putin met his Turkish counterpart Recep Tayyip Erdogan in Sochi, Russia on Monday. Putin reportedly said Russia is ready to renew the Black Sea Grain Initiative which allowed Ukraine to export agricultural products — but only if concessions are made to Russia as well.
[PRO]Don’t sleep on these stocks Adults need seven to nine hours of sleep per day. Even though 63% of U.S. adults don’t meet that requirement, they are growing increasingly concerned about their wellbeing, according to a 2022 McKinsey survey. That’s the start of a good dream for these sleep-related stocks.
If charting the trajectory of interest rates in the U.S. economy is like “navigating by the stars under cloudy skies,” as Federal Reserve Chair Jerome Powell put it in his Jackson Hole speech, then predicting the movement of stocks is like doing so when the stars are snuffed out. As for forecasting the price of bitcoin? Add a blindfold to the intrepid navigator.
Let’s look at two predictions made earlier this year.
At the optimistic end of the spectrum is Geoff Kendrick, head of crypto research at Standard Chartered, who wrote in an April note that bitcoin’s value could jump to as much as $100,000 by the end of 2024.
What do the numbers tell us? As of publication time, bitcoin is trading at $25,774. On Jan. 1, it was at $16,606, so bitcoin’s up around 55% this year. That suggests bitcoin has legs. But if we take a longer-term view, the current price of the digital currency is about 62% lower than its all-time high of $68,990 reached in November 2021.
Adding to the confusion, bitcoin sometimes tracks the movement of stocks because it’s seen to benefit from a booming economy; bitcoin sometimes trades inversely with stocks because some consider it a safe haven in times of uncertainty. The story here, then, is that bitcoin is wildly volatile — and it’s impossible to prove or dismantle either prediction, at this point.
Still, investors are optimistic about bitcoin because a U.S. court recently sided with Grayscale in a lawsuit against the SEC, which denied the company’s application to convert its bitcoin trust into an ETF. That means bitcoin ETFs from major companies are on their way, allowing retail investors to trade the cryptocurrency without actually owning it. The price of bitcoin rallied more than 7% when news broke last Tuesday.
BYD launched the BYD Seal in Europe at the IAA auto show in Munich, Germany. The electric sedan has a starting price of 44,900 euros ($48,479).
Arjun Kharpal | CNBC
Munich, GERMANY — The IAA in Munich, Germany is one of Europe’s most high-profile auto shows. And it was dominated by Chinese electric car firms looking to expand their presence on the continent and challenge incumbents from BMW to Ford in the new era of battery-powered vehicles.
Chinese start-ups and players had some of the biggest stands at the event with high-profile press conferences and vehicle launches, underscoring their intention to make a splash in the European market.
China, the world’s largest EV market, has seen a tidal wave of electric car companies pop up in the last few years, driven by government subsidies and venture capital funding. But a slowing market at home, due to tepid consumer spending after Covid-19 restrictions were lifted, coupled with an attractive market in Europe, has seen Chinese firms launch cars abroad and expand their footprint.
“Europe is one of the largest (second after China) mass market vehicle markets … If the Chinese EV makers want to secure a growth path beyond their local market, its very logical to look at Europe,” Daniel Roeska, senior research analyst at Bernstein Research, told CNBC via email.
Roeska added that Europe, with its “stringent de-facto” ban on combustion engine cars in 2035, “is pushing the market faster towards EVs at a time when most EU brands … do not have a perfect offering yet, making market share gains easier.”
Many of the European carmakers have been seen lagging in their push into EVs at a time when Chinese players have launched dozens of new vehicles.
The ambitions of Chinese EV firms were on display at the IAA.
On the morning of the first day, Leapmotor, a Chinese firm headquartered in Hangzhou, announced plans to bring its C10 sports utility vehicle, or SUV, to European markets next year. In the next two years, the company said it plans to introduce five “globally-oriented” products across the world.
“All of Leapmotor’s subsequent products will be designed and developed with a global mindset and adhere to global standards,” Leapmotor CEO Zhu Jiangming said at a press conference on Monday.
Chinese EV maker Leapmotor launched its first car for the international markets called the C10.
Arjun Kharpal | CNBC
Meanwhile, BYD, the carmaker backed by Warren Buffett, launched its Seal electric sedan for Europe on Monday, starting at 44,900 euros ($48,479). For comparison, in Germany, Tesla’s Model 3, starts at 42,990 euros.
And there were more announcements about continued expansion into new territories.
Xpeng said Monday it will expand sales of its cars into the German market in 2024. The company currently sells its P7 sedan and G9 SUV in Norway, Sweden, Denmark and the Netherlands. And Brian Gu, president of Xpeng, said the company plans to bring its latest car, the G6, to Europe next year, underscoring the Guangzhou-headquartered firm’s global push.
“We recognise Germany is the most important and the highest standard market for all” carmakers, Gu told CNBC in an interview Monday.
“And to be able to be here and then really made our make our product available to the customers in this market, really will help us further penetrate the continental European market. We have ambitions for broader market coverage internationally.”
The entrance of Chinese firms into Europe is seen as a threat to big automakers who have been perceived to be moving too slow on EVs.
Analysts at Bernstein said in a note published in June that if Chinese carmakers enter the market “as per normal,” then incumbents may concede up to 5% market share by 2030. But these new entrants could grab up to 20% market share if their entrance into Europe is more aggressive than expected, they added.
But the Chinese companies themselves face rising competition from within, but also outside of their home market. Tesla sparked a price war earlier this year which has put pressure on profits and margins of some of China’s smaller players like Xpeng.
Meanwhile, to fend of rising competition and catch up with Tesla, BMW and Mercedes both launched a dedicated electric car platform that will underpin their vehicles for the coming years, adding further potential headwinds that are not lost on these Chinese challengers.
“Well, it is definitely not easy,” Xpeng’s Gu said of the push from traditional carmakers into EVs.
“I think as a young company, we also are trying to learn from … each step that we take, as well as learn from the competition, the partners that we have. But we have confidence in our technology, we have confidence in our product,” Gu added.
Chinese automaker BYD had one of the biggest stands at the IAA show in Munich, Germany in 2023.
Arjun Kharpal | CNBC
Another challenge for the Chinese firms is building brand recognition, an exercise that could stretch marketing budgets and take a long time to do.
“Brand is a sizeable issue, but not insurmountable if they can invest for the long-term,” Peter Richardson, vice president at Counterpoint Technology Research, told CNBC via email.
Richardson said Korean firms Hyundai and Kia were “relatively unknown” in Europe 30 years ago, but “both brands have risen to be significant players.”
The Mercedes-Benz Concept CLA Class was unveiled at IAA Mobility 2023 in Munich, Germany. The platform will underpin the German automaker’s push into electric cars.
Mercedes-Benz
Mercedes-Benz and BMW took the wraps off electric concept cars as they look to catch up with Tesla in the premium end of the market.
At the IAA auto show in Munich, Mercedes showed off the Mercedes-Benz Concept CLA Class while BMW revealed the BMW Vision Neue Klasse.
These cars are built on an entirely new platforms from the German automakers that will underpin both their EV offerings for the coming years, in what has been their most aggressive push into battery-powered vehicles yet.
They are concept cars, so it’s unclear what their final form will look like when they’re eventually produced. But here’s a closer look at Mercedes and BMW’s offerings.
The Mercedes-Benz Concept CLA Class is built on the so-called Mercedes‑Benz Modular Architecture (MMA), a new platform designed by the German auto giant for electric cars.
The range will comprise a total of four new models — a four-door coupé, an estate and two sports utility vehicles.
Mercedes claims the car will have a range of 750 kilometres (466 miles) on a single charge. The company also claims that in just 15 minutes, the battery can be charged so the car can be driven 400 kilometers.
Mercedes touted the fast-charging capabilities and long-range batter of the Concept CLA Class.
Mercedes-Benz
Mercedes has placed a big focus on the interior and user experience. The company said it is developing its own operating system for the car called MB.OS. This will help power various features from the giant screen across the dashboard to the voice assistant within the car.
It will also allow third-party apps, such as your favorite music or video streaming apps, to be integrated with the vehicle.
“This proprietary chip-to-cloud architecture represents a completely new approach for the company and will be a largely hidden yet defining aspect of all its future vehicles,” Mercedes-Benz said in a press release.
Mercedes said it focused on digitizing the interior of the Concept CLA Class. This includes a virtual assistant and support for third-party apps.
Mercedes-Benz
Traditional automakers have been perceived as being behind Tesla on the software front. This is an attempt by Mercedes to show it is catching up.
The BMW Vision Neue Klasse is BMW’s answer to Tesla. It is also built on a new architecture that will underpin BMW’s future electric cars.
The first electric vehicles based on the Neue Klasse — or new class — architecture are set to enter production in 2025.
BMW revealed the BMW Vision Neue Klasse, a concept electric vehicle that will underpin its foray into battery-powered cars.
Arjun Kharpal | CNBC
The concept vehicle has a glass roof. BMW said the design of the car embody classic elements that fans know of the brand.
The BMW Vision Neue Klasse was unveiled at the IAA Mobility 2023 International Motor Show in Munich.
Arjun Kharpal | CNBC
BMW said the car will contain what it calls Panoramic Vision, a heads-up display which projects information on the windscreen at the eyeline of the driver.
The company said this will first be available in the Neue Klasse. Both passenger and driver will be able to interact with the Panoramic Vision feature, BMW said.
There were few details on range and charging. But BMW said the new generation of its technology will improve the charging speed of the Neue Klasse models by up to 30 percent, in addition to boosting their range by up to 30 percent.
BMW says the Vision Neue Klasse electric car has all the classic features the brand is known. BMW said the 21-inch aerodynamic wheels “pay tribute to the classic cross-spoke design inspired by motorsports.”
German automaker BMW on Saturday launched a hotly anticipated electric concept car, saying the so-called “Vision Neue Klasse” represents the dawn of a new era for the company.
BMW’s latest design showcases a platform that will underpin the brand’s next generation of electric vehicles. The first electric vehicles based on the Neue Klasse — or new class — architecture are set to enter production in 2025.
The new line-up of electric vehicles includes BMW’s sixth generation of battery cells, which the company says will improve both the charging speed and range of the Neue Klasse platform by up to 30%. As a result of these measures, BMW said the overall vehicle efficiency would increase by up to 25%.
“With the BMW Vision Neue Klasse, we put every innovative force that BMW has on the electric side, on the digital side and, of course, that car will also be prepared for the industry of circularity,” BMW CEO Oliver Zipse told CNBC’s Arabile Gumede.
“In only two years’ time, these cars will hit the road, and with that, overall, we lead BMW to a new era of innovation and sustainability. That’s the purpose of our show at the IAA,” Zipse said.
The Vision Neue Klasse is set to make its public debut in the coming days at the IAA motor show in Munich, which also serves as the headquarters of BMW. The IAA show is one of the world’s largest mobility trade fairs.
“We believe that electromobility will be the largest growth segment in the world for the automotive industry and we want to be a leading force here,” Zipse said.
An employee checks the logo of a car during its final inspection on a production line at Germany’s carmaker BMW plant in Leipzig, eastern Germany, on October 20, 2022.
Ronny Hartmann | Afp | Getty Images
The BMW chief executive projected that battery electric vehicles will represent 15% of the carmaker’s worldwide sales by the end of 2023 and that “we will increase that further next year and the year after next.”
Frank Weber, member of the Board of Management of BMW responsible for development, said the Neue Klasse range represents a “major technological leap” for the carmaker.
In early August, BMW said that it expected ongoing challenges from supply chain issues and stubbornly high inflation to persist over the coming months. It nevertheless lifted the annual outlook for its margin on earnings before interest and taxes in the automotive segment.
Shares of BMW are up around 13% year-to-date.
Asked about the presence of Chinese electric vehicle giants at the Munich motor show and whether he was worried about Chinese exports into Europe impacting BMW’s business, Zipse replied, “No, we are not afraid at all.”
“That is a sign of attractiveness when global players like the Chinese, which is the largest car market in the world, come here to Munich and showcase what they want. It is far more than auto, this is a tech show, this is an innovation show,” Zipse said.
“And I think to have everyone here, the Americans, the Europeans and now also the Chinese, is super exciting. You hear it in my words already, I’m more excited, and I’m not afraid at all, and it is good that we have a show which attracts a lot of competition. That’s super.”
A 98-year-old man has been charged in Germany with being an accessory to murder as a guard at the Nazis’ Sachsenhausen concentration camp between 1943 and 1945, prosecutors said Friday.
The German citizen, a resident of Main-Kinzig county near Frankfurt, is accused of having “supported the cruel and malicious killing of thousands of prisoners as a member of the SS guard detail,” prosecutors in Giessen said in a statement. They did not release the suspect’s name.
He is charged with more than 3,300 counts of being an accessory to murder between July 1943 and February 1945. The indictment was filed at the state court in Hanau, which will now have to decide whether to send the case to trial. If it does, he will be tried under juvenile law, taking account of his age at the time of the alleged crimes.
Prosecutors said that a report by a psychiatric expert last October found that the suspect is fit to stand trial at least on a limited basis.
More than 200,000 people were held at Sachsenhausen, just north of Berlin, between 1936 and 1945. Tens of thousands died of starvation, disease, forced labor, and other causes, as well as through medical experiments and systematic SS extermination operations including shootings, hangings and gassing.
This undated file photo shows a roll call, in the early morning or late evening hours, in front of the camp gate of the Nazi concentration camp Sachsenhausen in Oranienburg on the outskirts of Berlin, Germany.
STR / AP
Exact numbers for those killed vary, with upper estimates of some 100,000, though scholars suggest figures of 40,000 to 50,000 are likely more accurate.
Law enables trials of surviving SS personnel
German prosecutors have brought several cases under a precedent set in recent years that allows for people who helped a Nazi camp function to be prosecuted as an accessory to the murders there without direct evidence that they participated in a specific killing.
Charges of murder and being an accessory to murder aren’t subject to a statute of limitations under German law.
But given the advanced age of the accused, many trials have had to be cancelled for health reasons.
Convictions also do not lead to actual imprisonment, with some defendants dying before they could even begin to serve their jail terms.
Both men were found guilty for complicity in mass murder at age 94 but died before they could be imprisoned.
An 101-year-old ex-Nazi camp guard, Josef Schuetz was convicted last year, becoming the oldest so far to be put on trial for complicity.
He died in April while awaiting the outcome of an appeal against his five-year jail sentence.
And a 97-year-old former concentration camp secretary, Irmgard Furchner, became the first woman to be tried for Nazi crimes in decades in December 2022, the BBC reported. She was found guilty of complicity in the murders of more than 10,500 people at Stutthof camp, near the city of Danzig.
Amos Goldberg, a leading professor of the Holocaust at Hebrew University in Jerusalem, has published a scathing retort saying that describing Israel’s treatment of Palestinians as “apartheid” is not anti-Semitic, in a guest post in the Frankfurter Allgemeine Zeitung (FAZ).
Felix Klein, Germany’s commissioner for Jewish Life and the Fight Against Anti-Semitism, said using “apartheid” in such scenarios is “an anti-Semitic narrative” in an interview with Die Welt, one of Germany’s most-read newspapers.
The Israeli government, Goldberg stated, fights against human rights, democracy and equality and propagates the opposite: “authoritarianism, discrimination, racism and apartheid”.
“Accusing Israel of apartheid is not anti-Semitic. It describes reality,” he said.
‘The elephant in the room’
Goldberg’s standpoint was not an outlier, he urged Klein to understand. Rather, it represented a growing chorus of voices, including leading Israeli academics propagating the term apartheid to describe the treatment of Palestinians by the current regime.
In fact, if Klein were right, Goldberg wrote, then some of the best-known Holocaust and anti-Semitism researchers from Israel, the United States, Europe and worldwide would be anti-Semites.
He referenced a petition co-initiated by Omer Bartov, the Israeli-born historian and professor of Holocaust and genocide studies at Brown University, titled The Elephant in the Room, which states: “There can be no democracy for Jews in Israel while Palestinians live under an apartheid regime”.
The petition has been signed by more than 2,000 academics, clergy, and other public figures at the time of writing and is emblazoned with an illustration that includes a large elephant with the words “Israeli occupation” alongside a speech bubble that reads “Let’s just ignore it”, and surrounded by dozens of people freely waving placards for various social justice movements.
“Palestinian people lack almost all basic rights, including the right to vote and protest,” the petition reads, “Settler vigilantes burn, loot, and kill with impunity.”
A rhetorical shift in Israeli academia
This represents a significant shift in rhetoric among many Jewish and non-Jewish academics, Goldberg wrote in FAZ.
The recent judicial changes proposal that Israeli Prime Minister Benjamin Netanyahu recently pushed through has forced many people to change their perception of the Israeli regime, including Zionists, he states.
Goldberg referenced Benjamin Pogrund, a South African-born Israeli author who was once quoted as saying anyone who labelled Israel an apartheid regime “is at best ignorant and naive and at worst cynical and manipulative”.
Protesters hold a poster that reads ‘King of apartheid’ while protesting against Israeli Prime Minister Benjamin Netanyahu during his visit to Germany, Berlin, March 16, 2023 [Christian Mang/Reuters]
Pogrund recently wrote an op-ed for the Israeli newspaper Haaretz in which he described his new position: “I have argued with all my might against the accusation that Israel is an apartheid state: in lectures, newspaper articles, on TV and in a book. However, the accusation is becoming fact.”
“We deny Palestinians any hope of freedom and normal lives. We believe our own propaganda that a few million people will meekly accept perpetual inferiority and oppression,” he wrote.
Goldberg also cited Barak Medina, a law professor at the Hebrew University of Jerusalem and a former Supreme Court nominee, who wrote that the untrue statements of Finance Minister and Second Minister of Security Bezalel Smotrich served to justify an apartheid regime in occupied East Jerusalem.
‘Accusing Israel of apartheid is not anti-Semitic’
Klein’s statement that accusing Israel of apartheid is anti-Semitic is not far removed from the position of the right-wing extremist politicians in the Israeli coalition government who demand that the Jewish character of the state take precedence over its democratic character, Goldberg argues.
It is a position shared by Bartov, who recently told the Washington Post: “You can call me a self-hating Jew, call me an antisemite … People use those terms to cover up the reality, either to deceive themselves or to deceive others. You have to look at what’s happening on the ground.”
Klein may not be “receptive to reality”, Goldberg concludes in his FAZ article, “but reality is stronger and more and more people around the world and in Israel are beginning to see it”.
El Niño — or “the little boy” in Spanish — marks the unusual warming of the surface waters in the tropical central and eastern Pacific Ocean. It is a naturally occurring climate pattern which takes place on average every two to seven years.
The effects of El Niño tend to peak during December, but its full impact typically takes time to spread across the globe. This lag is why forecasters believe 2024 could be the first year when humanity surpasses the key climate threshold of 1.5 degrees Celsius. Global average temperatures in 2022 were 1.1 degrees Celsius warmer when compared with the late 19th century.
In drought-stricken Panama, low water levels have prompted the Central American country to reduce the number of vessels that pass through the critically important Panama Canal.
The restrictions have created a logjam of ships waiting to traverse the route, which many companies favor, as it typically slashes the travel time between the Atlantic and Pacific oceans.
The Panama Canal Authority, which manages the waterway, said earlier this month that the measures were necessary because of “unprecedented challenges.” It added that the severity of this year’s drought had “no historical precedence.”
The Panama Canal pileup comes shortly after the U.N. weather agency declared the onset of El Niño, which is likely to pave the way for a spike in global temperatures and extreme weather conditions.
What we see right now is perhaps only the starter of the main course that is being served next year.
Peter Sands
Chief analyst at Xeneta
Peter Sands, chief analyst at air and ocean freight rate benchmarking platform Xeneta, said maritime chokepoints exist “all over the place,” but that typically only calamitous events such as the 2021 Suez Canal obstruction tend to expose the fragility of the “just-in-time” delivery model.
“I think global shipping is like the world’s largest invisible sector,” Sands told CNBC via videoconference. “We all rely on services and the goods carried by sea, but we hardly ever get to think about how they end up on the shelves — unless something goes wrong.”
The Ever Given, one of the world’s largest container ships, ran aground for almost a week in March 2021 while contending with strong winds. The obstruction halted all traffic on one of the world’s busiest trade routes, causing massive disruption between Europe, Asia and the Middle East.
Analysts have since warned that extreme weather driven by the climate crisis could increase the frequency of Ever Given-like events, with potentially far-reaching consequences for supply chains, food security and regional economies.
Vessels waiting to cross Panama Canal from Pacific Ocean side. Red square indicates Panama Canal
‘Planet Labs PBC’
Addressing the unusually long delays at the Panama Canal, Sands said that, while officials have previously imposed restrictions on ships due to low water levels, the onset of El Niño could exacerbate the problem.
“What we see right now is perhaps only the starter of the main course that is being served next year because it could be [a] more severe drought when we get to the first half of 2024,” Sands said, citing the impact of El Niño.
“Right now, we do not see that filling up of the water levels that a normal year would bring around. So, it is literally a potential disaster in the making,” he added.
Danish shipping giant Maersk said it had been “largely unaffected” by the Panama Canal delays, although it warned that climate risks to major shipping routes were becoming more prevalent with potentially severe impacts.
“We have actually had to deal with some of this back from the 1990s,” Lars Ostergaard Nielsen, head of the Americas liner operations center at Maersk, told CNBC via videoconference.
“I think the difference is that it is perhaps becoming more prevalent, it is more perhaps severe, if you like, in terms of the impact today.”
A crane loads a shipping container branded A.P. Moller-Maersk onto a freight ship.
Balint Porneczi | Bloomberg | Getty Images
Referring to low water levels and the restrictions in place on the Panama Canal, Nielsen said the drought is prompting Maersk to load approximately 2,000 containers fewer than usual on the same vessel.
Typically, Nielsen said container ships might need to comply with a maximum depth of 50 feet on the Panama Canal. Current restrictions require ships to adhere to 44 feet of draft, forcing container ships to either weigh less or transport fewer goods.
“Six feet of water, that makes a big difference,” Nielsen said.
While the Panama Canal is likely to be one of the shipping routes most exposed to climate vulnerabilities, it is not the only waterway struggling to cope with the effects of extreme weather.
Low water levels on the Rhine River, an important trade route that runs through Germany via European cities to the port of Rotterdam in the Netherlands, is also of concern.
Ships sail across the Rhine at Bacharach in Rhineland-Palatinate.
Falling water levels on Europe’s busiest waterway have become a regular occurrence in recent years, making it more difficult for vessels to transit at capacity and increasing shipping costs.
“On the Rhine … it’s basically more daily tactical decisions simply because it’s short trips [and] it’s relatively easy to find alternatives so you can actually deal with that quite late in your processes,” Nielsen said.
“Whereas [with the] Panama Canal, you really have to plan it quite early because by the time you have a crossed the Pacific etc., you don’t really have any other options once you arrive,” he added.
Global insurance broker Marsh warned in a report published late last year that greater focus should be given to understanding the vulnerabilities of maritime chokepoints, given the increasing incidence of climate-driven disruptive weather events.
In the case of the Suez Canal, Marsh cited coastal inundation — where the sea level rises high enough to flood infrastructure — and the increasing chance of extreme heat as physical risks that will only be aggravated by the climate emergency.
If any of the five major waterways worldwide were disrupted by accidents or political events, analysts at Marsh said the impacts will be felt far beyond global supply chains. The broker recognized these five major waterways as the Suez and Panama canals, the Strait of Malacca between Indonesia and Malaysia, the Strait of Hormuz between Iran and Oman, and the Bab-el-Mandeb between Djibouti and Yemen.
Oetzi the Iceman has a new look. Decades after the famous glacier mummy was discovered in the Italian Alps, scientists have dug back into his DNA to paint a better picture of the ancient hunter.
They determined that Oetzi was mostly descended from farmers from present day Turkey, and his head was balder and skin darker than what was initially thought, according to a study published Wednesday in the journal Cell Genomics.
Oetzi, who lived more than 5,000 years ago, was frozen into the ice after he was killed by an arrow to the back. His corpse was preserved as a “natural mummy” until 1991, when hikers found him along with some of his clothing and gear — including a copper ax, a longbow and a bearskin hat. Since then, many researchers have worked to uncover more about the mummy, which is displayed at the South Tyrol Museum of Archaeology in Bolzano, Italy.
An earlier draft of Oetzi’s genome was published in 2012. But ancient DNA research has advanced since then, so scientists decided to take another look at the iceman’s genes, explained study author Johannes Krause, a geneticist at Germany’s Max Planck Institute for Evolutionary Anthropology. They used DNA extracted from the mummy’s hip bone.
The updated genome is “providing deeper insights into the history of this mummy,” said Andreas Keller of Germany’s Saarland University. Keller worked on the earlier version but was not involved with the latest study.
Based on the new genome, Oetzi’s appearance when he died around age 45 was much like the mummy looks today: It’s dark and doesn’t have much hair on it, said study author Albert Zink, head of the Institute for Mummy Studies at Eurac Research in Italy. Scientists previously thought the iceman was lighter-skinned and hairier in life, but that his mummified corpse had changed over time.
His genome also showed an increased chance of obesity and diabetes, the researchers reported.
And his ancestry suggests that he lived among an isolated population in the Alps, Zink said. Most Europeans today have a mix of genes from three groups: farmers from Anatolia, hunter-gatherers from the west and herders from the east. But 92% of Oetzi’s ancestry was from just the Anatolian farmers, without much mixing from the other groups.
