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Tag: Germany

  • Walmart helps pull Wall Street to its 5th straight loss

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    NEW YORK (AP) — Wall Street fell to a fifth straight loss on Thursday, hurt by a drop for Walmart and dampened hopes for coming cuts to interest rates.

    The S&P 500 slipped 0.4%. All its losses have been relatively modest, but it has not risen since setting an all-time high last Thursday. The Dow Jones Industrial Average dropped 152 points, or 0.3%, and the Nasdaq composite fell 0.3%.

    Walmart was one of the market’s heaviest weights and dropped 4.5% after reporting a profit for the spring that came up short of analysts’ expectations, while Nvidia and other Big Tech stocks held a bit steadier following two days of sharp swings.

    The moves were stronger in the bond market, where Treasury yields rose after a report forced Wall Street to scale back hopes that the Federal Reserve may soon deliver relief by cutting interest rates.

    The report suggested growth in U.S. business activity is accelerating and hit its fastest rate so far this year. That’s good news for the economy, but the preliminary data from S&P Global also said tariffs helped push up average selling prices at the fastest rate in three years. That’s a discouraging sign for inflation.

    Taken all together, such data has historically aligned more with the Federal Reserve considering a hike in interest rates, rather than a cut, according to Chris Williamson, chief business economist at S&P Global Market Intelligence.

    No one expects a rate hike to happen, but the overwhelming expectation on Wall Street has been for coming cuts. Traders are betting on a nearly three-in-four chance that the Fed will lower its main interest rate at its next meeting in September, according to data from CME Group. The hope on Wall Street has been that Fed Chair Jerome Powell may give hints on Friday that easier rates may be coming.

    He will be speaking in Jackson Hole, Wyoming, at an annual conference of central bankers that’s been home to big policy announcements in the past.

    A cut in interest rates would be the first of the year, and it would give investment prices and the economy a boost by potentially making it cheaper to borrow to buy cars or equipment. But it could also risk worsening inflation.

    The Fed has been hesitant to cut interest rates this year out of fear that President Donald Trump’s tariffs could push inflation higher, but a surprisingly weak report on job growth earlier this month suddenly made the job market a bigger worry. Trump, meanwhile, has angrily pushed for cuts to interest rates, often insulting Powell while doing so.

    The yield on the 10-year Treasury, which helps set rates for mortgages, rose to 4.32% from 4.29%. The two-year Treasury, which moves more on expectations for what the Federal Reserve will do with short-term interest rates, climbed to 3.78% from 3.74%.

    On Wall Street, Walmart dropped even though it reported encouraging growth in revenue during the latest quarter and raised its forecast for profit over its full fiscal year.

    Analysts said the market’s expectations were high coming into the report. The Bentonville, Arkansas, company’s stock came into the day with a gain of 13.5% for the year so far, more than the rest of the market.

    Big Tech stocks are under even more pressure to deliver bigger profits amid criticism that their stock prices ran too high, too fast and have become too expensive because of the frenzy around artificial-intelligence technology.

    Several AI superstar stocks have swung sharply this week, taking some shine off their skyscraping surges for the year, because of such criticism. But they held a bit steadier on Thursday.

    Palantir Technologies, which at one point on Wednesday was on track to fall more than 9% for a second straight day before paring its loss, rose 0.1%. Nvidia, the chip company that’s become the poster child of the AI boom, edged down 0.2%.

    Coty tumbled 21.6% after the beauty products company reported a loss for the latest quarter, when analysts expected a slight profit. The company, whose brands include CoverGirl and Joop!, said uncertainty about tariffs and the economy are making retailers cautious in their orders.

    On the winning side of Wall Street was Nordson, which makes products and systems used for precision dispensing and other things. It delivered profit and revenue for the latest quarter that topped analysts’ expectations, and its stock rose 3%.

    All told, the S&P 500 slipped 25.61 points to 6,370.17. The Dow Jones Industrial Average fell 152.81 to 44,785.50, and the Nasdaq composite sank 72.55 to 21,100.31.

    In stock markets abroad, indexes were mixed across much of Europe and Asia.

    Germany, Europe’s largest economy, saw its DAX return 0.1% after U.S. and European Union officials offered a framework for their trade deal.

    Japan’s Nikkei 225 fell 0.6% after a survey showed Japan’s factory activity contracted again in August.

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    AP Writers Teresa Cerojano and Matt Ott contributed.

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  • Wall Street soars on hopes for lower interest rates as the Dow surges 846 points to a record

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    NEW YORK (AP) — Wall Street rallied to its best day in months on Friday after the head of the Federal Reserve hinted that cuts to interest rates may be on the way, along with the kick they can give the economy and investment prices.

    The S&P 500 leaped 1.5% for its first gain in six days and finished just shy of its all-time high set last week.

    The Dow Jones Industrial Average soared 846 points, or 1.9%, to its own record after topping its prior high from December. The Nasdaq composite jumped 1.9%.

    “Ka-Powell” is how Brian Jacobsen, chief economist at Annex Wealth Management, described the reaction to Jerome Powell’s highly anticipated speech in Jackson Hole, Wyoming. “The Fed isn’t going to be the party-pooper.”

    The hope among investors had been that Powell would hint that the Fed’s first cut to interest rates of the year may be imminent. Wall Street loves lower rates because they can goose the economy, even if they risk worsening inflation at the same time.

    President Donald Trump has angrily been calling for lower rates, often insulting Powell while doing so. And a surprisingly weak report on job growth this month pushed many on Wall Street to assume cuts may come as soon as the Fed’s next meeting in September.

    Powell encouraged them on Friday after saying he’s seen risks rise for the job market. The Fed’s two jobs are to keep the job market healthy and to keep a lid on inflation, and it often has to prioritize one over the other because it has just one tool to fix either.

    But Powell also would not commit to any kind of timing. He said the job market looks OK at the moment, even if “it is a curious kind of balance” where fewer new workers are chasing after fewer new jobs. Inflation, meanwhile, still has the potential to push higher because of Trump’s tariffs.

    In sum, Powell said that “the stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance.”

    Treasury yields tumbled in the bond market as bets built that the Fed would cut its main interest rate in September. Traders see an 83% chance of that, up from 75% a day earlier, according to data from CME Group.

    The yield on the 10-year Treasury fell to 4.25% from 4.33% late Thursday. The two-year Treasury yield, which more closely tracks expectations for Fed action, sank to 3.69% from 3.79% in a notable move for the bond market.

    On Wall Street, stocks of smaller companies led the way. They can benefit more from lower interest rates because of their need to borrow money to grow. The smaller stocks in the Russell 2000 index surged 3.9% for its best day since April and more than doubled the S&P 500’s rally.

    Homebuilders jumped on hopes that easier interest rates could encourage more people to buy homes. Lennar, PulteGroup and D.R. Horton all rose more than 5%.

    Travel companies, meanwhile, climbed amid hopes that easier interest rates could help U.S. households spend more. Norwegian Cruise Line rallied 7.2%, Delta Air Lines flew 6.7% higher and Caesars Entertainment rose 7%.

    Shares of Nio, a Chinese electric-vehicle maker, that trade in the United States leaped 14.4% after it began pre-sales of its flagship premium SUV model, the ES8.

    Intel climbed 5.5% after Trump said the chip company has agreed to give the U.S. government a 10% stake in its business.

    Nvidia rose 1.7% to trim its loss for the week. The company, whose chips are powering much of the world’s move in to artificial-intelligence technology, had seen its stock struggle recently amid criticism that it and other AI superstars shot too high, too fast and became too expensive.

    Nvidia CEO Jensen Huang said Friday that the company is discussing a potential new computer chip designed for China with the Trump administration. The chips are graphics processing units, or GPUs, a type of device used to build and update a range of AI systems. But they are less powerful than Nvidia’s top semiconductors today, which cannot be sold to China due to U.S. national security restrictions.

    All told, the S&P 500 jumped 96.74 points to 6,466.91. The Dow Jones Industrial Average leaped 846.24 to 45,631.74, and the Nasdaq composite rallied 396.22 to 21,496.53.

    In stock markets abroad, Germany’s DAX returned 0.3% after government data showed that its economy shrank by 0.3% in the second quarter compared with the previous three-month period.

    Indexes rose across much of Asia, with stocks climbing 1.4% in Shanghai and 0.9% in South Korea.

    ___

    AP Writers Teresa Cerojano and Matt Ott contributed.

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  • German Kids Go To School With Giant Cones. Here’s Why.

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    Back-to-school season in the U.S. involves a number of fun rituals, like shopping for classroom supplies, picking out a special first-day outfit and taking photos with a personalized sign. On the first day of school in Germany, however, you’ll see an even more striking sight.

    German children mark the transition to school by carrying large paper cones on their first day of classes. The cones — which seem larger than the kids themselves — are brightly colored and sometimes have ornate decorations.

    Westend61 via Getty Images

    German school cones come in many different colors with a variety of designs.

    But what’s the deal with these cones? What’s inside them? And where did they come from? We turned to some German cultural experts to find out.

    What is the school cone?

    “A Schultüte ― also known as a ‘school cone’ or ‘cone bag’ in some parts of Germany ― is a cardboard container in the form of a pointed cone that schoolchildren carry with them when they start school,” Amrei Gold, head of public relations for North America at the German National Tourist Board, told HuffPost.

    She noted that German children receive these cones from their parents on their first day of elementary school, which typically occurs around age 6. The Schultüte is very large and can be fully rounded and cone-shaped or appear more like a pyramid on a hexagonal base.

    A little girl in Dresden poses with her cone in September 2021.

    picture alliance via Getty Images

    A little girl in Dresden poses with her cone in September 2021.

    “The school cones are usually filled with sweets and small gifts such as crayons or other school supplies,” Gold explained. “The name ‘sugar cone,’ which is common in some areas for the school cone, comes from filling it with sweets.”

    She joked that perhaps the idea of having to attend school every day for the next 12-13 years requires “sweetening” with treats and gifts. The Schultüte is also a big photo opportunity, as many kids pose with their cones and sometimes a sign reading “My First Day of School.”

    “The cone has been a tradition for a long time and is an important part of the very first day of school for children in Germany,” said Kirsten Bencker, who works in the language department at the Goethe-Institut in Munich. “The point of the cone is to highlight the transition from one status to another. This transition is connected with many changes for the child and for the family and this is to be emphasized through a ritual.”

    Where did this tradition come from?

    “The custom of giving school starters a Schultüte on the first day of school has been practiced in Germany since the 19th century, but the roots go even back into the 18th century,” Gold explained. “Historically it has its roots in Saxony and Thuringia, but is well-known across Germany today.”

    She pointed to early evidence from the autobiography of Saxon theologian Karl Gottlieb Bretschneider, who began school in 1781 or 1782 and recalled receiving a bag of candy from the schoolmaster.

    German children with school cones in 1960.

    ullstein bild via Getty Images

    German children with school cones in 1960.

    “Twenty years later, when Johann Daniel Elster started school in Benshausen, Thuringia, in 1801, it is even said that he received a large bag of sugar from the cantor ‘according to old custom,’” Gold added. “Further evidence comes from Jena in connection with the city cantor Georg Michael Kemlein in 1817, Dresden in 1820, and Leipzig in 1836.”

    Early versions of the tradition involved telling kids that there was a special “school cone tree” at their teacher’s house or on the school grounds. Once the school cones grew big enough, it would be time to pick them and start school.

    “The custom became widespread not at least because of a children’s book called ‘Zuckertütenbuch für alle Kinder, die zum ersten Mal in die Schule gehen’ (‘Sugar cone book for all children going to school for the first time’) by Moritz Heger,” Bencker explained, noting that the 1852 book suggested that teachers pick the cones for their students from this special tree.

    A German child with a Schultüte circa 1920.

    ullstein bild via Getty Images

    A German child with a Schultüte circa 1920.
    A mother passes a school cone to her daughter in 1927.

    ullstein bild Dtl. via Getty Images

    A mother passes a school cone to her daughter in 1927.

    Edible treats were the dominant contents of school cones at that time.

    “In his childhood memories, ‘When I Was a Little Boy,’ Erich Kästner describes his first day of school in Dresden in 1906 and his ‘sugar cone with the silk bow,’” Gold noted. “When he wanted to show the bag to a neighbor, he dropped it and the contents fell on the floor: He was ‘up to his ankles in sweets, chocolates, dates, Easter bunnies, figs, oranges, tartlets, waffles and golden May bugs.’”

    Although the Schultüte started as a predominately central German tradition, the practice caught on elsewhere.

    “Berlin was the first big city outside of the original areas in which school cones became common ― although they were still rare before the First World War,” Gold said. “Only gradually did the custom catch on in the south and west.”

    Students with school cones in Berlin in 1966.

    picture alliance via Getty Images

    Students with school cones in Berlin in 1966.

    Following the division of Germany after World War II, traditional round cones around 28 inches long were the standard practice in West Germany, while those in East Germany opted for hexagonal Schultüte around 33 inches long.

    “Nowadays, the tradition is a widespread tradition in whole Germany and also Austria and the German-speaking part of Switzerland,” Bencker noted. “The central German regions where it began are also the areas where a very distinctive custom has developed around this school cone ― big family parties, ordering cakes with the name of the children at a bakery for the first day.”

    How do you put together a school cone?

    “While you can buy prefabricated cones at the store, many parents make their own school cones, with or without their children,” Bencker said. “Generally speaking, children can be very creative in decorating their sugar cones.”

    Indeed, there are many online tutorials explaining how to make a Schultüte with thick paper products like poster board ― though cardboard and plastic can also be used. These days, there are also more sustainable school cones made of fabric, which can be turned into cushions.

    Many families put together very ornate cone designs.

    Westend61 via Getty Images

    Many families put together very ornate cone designs.

    “If the parents are not going to make the school cones, they are either bought ready-made or made by the children themselves in kindergarten,” Gold said, adding that in the past, godparents were often the ones giving kids their school cones. “The largest manufacturer of school cones in Germany is Nestler GmbH Feinkartonagen in Ehrenfriedersdorf. It produces over 2 million school cones a year.”

    In addition to the traditional sweets, cones these days may also be filled with school supplies, books or something to play with.

    First graders arrive with their cones for their first day of school on Aug. 13, 2020, in Oberpleis, Germany.

    Andreas Rentz via Getty Images

    First graders arrive with their cones for their first day of school on Aug. 13, 2020, in Oberpleis, Germany.
    A variety of Schultüten on display waiting to be picked up by first graders at an elementary school in Kleinmachnow, near Potsdam, in August 2015.

    picture alliance via Getty Images

    A variety of Schultüten on display waiting to be picked up by first graders at an elementary school in Kleinmachnow, near Potsdam, in August 2015.

    Some schools even have guidelines for the maximum size of students’ cones, and there might be a designated enrollment day before the first day of classes when children receive their cones and take photos. And the tradition is no longer explicitly limited to the beginning of primary school.

    “Today, small cones of candy are sometimes handed out at the transition from elementary school to secondary school or at the beginning of an apprenticeship or study,” Gold said. “However, they are still primarily associated with the beginning of school.”

    Of course, if you want to make yourself a Schultüte for no reason whatsoever, who’s to stop you?

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  • Alcohol-free beer is gaining popularity, even at Oktoberfest

    Alcohol-free beer is gaining popularity, even at Oktoberfest

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    MUNICH (AP) — The head brewmaster for Weihenstephan, the world’s oldest brewery, has a secret: He really likes alcohol-free beer.

    Even though he’s quick to say he obviously enjoys real beer more, Tobias Zollo says he savors alcohol-free beer when he’s working or eating lunch. It has the same taste but fewer calories than a soft drink, he said, thanks to the brewery’s process of evaporating the alcohol.

    “You can’t drink beer every day — unfortunately,” he joked last week at the Bavarian state brewery in the German town of Freising, about 30 kilometers (20 miles) north of Munich.

    Zollo isn’t alone in his appreciation for the sober beverage. Alcohol-free beer has been gaining popularity in recent years as beer consumption shrinks.

    At Weihenstephan, which was founded as a brewery in 1040 by Benedictine monks, non-alcoholic wheat beer and lager now make up 10% of the volume. The increase over the last few years, since they started making alcohol-free drinks in the 1990s, mirrors the statistics for the rest of Germany’s beer industry.

    “The people are unfortunately — I have to say that as a brewer — unfortunately drinking less beer,” Zollo said Friday, the day before Oktoberfest officially started. “If there’s an alternative to have the crisp and fresh taste from a typical Weihenstephan beer, but just as a non-alcoholic version, we want to do that.”

    Even at Oktoberfest — arguably the world’s most famous ode to alcohol — alcohol-free beer is on the menu.

    All but two of the 18 large tents at the festival offer the drink through the celebration’s 16 days. The sober beverage will cost drinkers the same as an alcoholic beer — between 13.60 and 15.30 euros ($15.12 and $17.01) for a 1-liter mug (33 fluid ounces) — but save them from a hangover.

    “For people who don’t like to drink alcohol and want to enjoy the Oktoberfest as well, I think it’s a good option,” Mikael Caselitz, 24, of Munich said Saturday inside one of the tents. “Sometimes people feel like they have more fun with alcohol, which is not a good thing because you can also have fun without alcohol.”

    He added: “If you want to come and drink alcohol-free beer, nobody will judge you.”

    This year marked the first time an alcohol-free beer garden opened in Munich. “Die Null,” which means “the zero” in German, served non-alcoholic beer, mocktails and other alcohol-free drinks near the city’s main train station this summer but was scheduled to close a few day before Oktoberfest opened.

    Walter König, managing director of the Society of Hop Research north of Munich, said researchers have had to breed special hops varieties for alcohol-free beer. If brewers use the typical hops for alcohol-free beer, the distinct aroma gets lost when the alcohol is reduced during the brewing process.

    But customers don’t care about that, König said Friday as he prepared for Oktoberfest.

    “They only want to know that what they are tasting is as good as traditional beers with alcohol,” he said.

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  • Unbelievable facts

    Unbelievable facts

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    In Germany, obtaining a driver’s license costs between €2,600 and €3,500, including fees for driving…

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  • UniCredit’s Orcel acting ‘slightly aggressively’ but ‘completely legitimately’ in potential Commerzbank takeover battle: David Marsh

    UniCredit’s Orcel acting ‘slightly aggressively’ but ‘completely legitimately’ in potential Commerzbank takeover battle: David Marsh

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    David Marsh, chairman of OMFIF, discusses the potential takeover battle between UniCredit and Commerzbank, and the German banking environment.

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  • Central Europe braces for heavy rains and flooding forecast over the weekend

    Central Europe braces for heavy rains and flooding forecast over the weekend

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    PRAGUE (AP) — Central European nations braced on Friday for severe flooding forecast to hit the Czech Republic, Poland, Austria, Germany, Slovakia and Hungary over the weekend.

    Czech authorities erected metal barriers or protective walls from sandbags, while water was released from dams to make space in reservoirs. Residents have been warned to get ready for possible evacuations.

    Some public events planned for the weekend have been cancelled at the request of authorities, including soccer matches in the top two leagues.

    “We have to be ready for the worst case scenarios,” Prime Minister Petr Fiala said after a meeting of his government’s central crisis committee. “A tough weekend is ahead of us.”

    Meteorologists say a low pressure system from northern Italy was predicted to dump much rainfall in most parts of the Czech Republic, or Czechia, including the capital and border regions with Austria and Germany in the south, and Poland in the north.

    Central Europeans are especially wary because some experts have compared the weekend forecast to devastating floods in 1997 in the region, referred to by some as the flood of the century.

    Over 100 people were killed in the floods 27 years ago, including 50 in the eastern Czech Republic where large sections of land was inundated.

    The biggest rainfall was predicted in the eastern half of the country, particularly in the Jeseniky mountains. The second largest city of Brno, located in eastern Czech Republic, is among places that have not had flooding protection work completed, unlike Prague.

    Czechs were asked not to go to parks and woods as high winds of up to 100 kilometers (62 miles) per hour were forecast.

    In Poland, Prime Minister Donald Tusk traveled on Friday to the southwestern Polish city of Wrocław where floods are forecast. Authorities appealed to residents to stock up on food and to prepare for power outages by charging power banks.

    Tusk, meeting with firefighters and other emergency officials, said the forecasts were “not excessively alarming.”

    “There is no reason to panic, but there is a reason to be fully mobilized,” he stressed.

    The German Weather Service warned of heavy precipitation across swaths of the country, including the Alps, where heavy snowfall and strong winds are expected at higher altitudes.

    The Alpine nation of Austria is also getting ready for heavy rains, and a massive cold front that is expected to bring snow to higher elevations.

    The weather change arrived following a hot start to September in the region. Scientists have recorded Earth’s hottest summer on record, breaking a record set just one year ago.

    A hotter atmosphere, driven by human-caused climate change, can lead to more intense rainfall.

    ___

    Associated Press writer Vanessa Gera in Warsaw, Poland, contributed to this report.

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  • UniCredit’s pursuit of Commerzbank reflects a watershed moment for Europe — and its banking union

    UniCredit’s pursuit of Commerzbank reflects a watershed moment for Europe — and its banking union

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    A man shelters from the rain under an umbrella as he walks past the Euro currency sign in front of the former European Central Bank (ECB) building in Frankfurt am Main, western Germany.

    Kirill Kudryavtsev | Afp | Getty Images

    European banking’s latest takeover battle is widely regarded as a potential turning point for the region — particularly the bloc’s incomplete banking union.

    Italy’s UniCredit has ratcheted up the pressure on Frankfurt-based Commerzbank in recent weeks as it seeks to become the biggest investor in Germany’s second-largest lender with a 21% stake.

    The Milan-based bank, which took a 9% stake in Commerzbank earlier this month, appears to have caught German authorities off guard with the potential multibillion-euro merger.

    “The long-discussed move by UniCredit, Italy’s number one bank, to seek control of Germany’s Commerzbank is a watershed for Germany and Europe,” David Marsh, chairman of London-based OMFIF, an organization that tracks central banking and economic policy, said Tuesday in a written commentary.

    Whatever the outcome of UniCredit’s swoop on Commerzbank, Marsh said the episode marks “another huge test” for German Chancellor Olaf Scholz.

    The embattled German leader is firmly opposed to the apparent takeover attempt and has reportedly described UniCredit’s move as an “unfriendly” and “hostile” attack.

    “The dispute between Germany and Italy over UniCredit’s takeover manoeuvres – branded by Scholz an unfriendly act – threatens to inflame relations between two of the Big Three member states of the European Union,” Marsh said.

    “A compromise could still be found,” he continued. “But the hostility developing in Italy and Germany could scupper any meaningful steps towards completing banking union and capital markets integration, which all sides say is necessary to drag Europe out of its malaise.”

    What is Europe’s banking union?

    Designed in the wake of the 2008 global financial crisis, the European Union’s executive arm in 2012 announced plans to create a banking union to make sure that lenders across the region were stronger and better supervised.

    The project, which became a reality in 2014 when the European Central Bank assumed its role as a banking supervisor, is widely considered to be incomplete. For instance, the lack of a European deposit insurance scheme (EDIS) is one of a number of factors that has been cited as a barrier to progress.

    European leaders, including Germany’s Scholz, have repeatedly called for greater integration in Europe’s banking sector.

    OMFIF’s Marsh said Germany’s opposition to UniCredit’s move on Commerzbank means Berlin “now stands accused of favouring European banking integration only on its own terms.”

    A spokesperson for Germany’s government did not immediately respond when contacted by CNBC for comment.

    The logo of German bank Commerzbank seen on a branch office near The Commerzbank Tower in Frankfurt.

    Daniel Roland | Afp | Getty Images

    Hostile takeover bids are not common in the European banking sector, although Spanish bank BBVA shocked markets in May when it launched an all-share takeover offer for domestic rival Banco Sabadell.

    The head of Banco Sabadell said earlier this month that it is highly unlikely BBVA will succeed with its multi-billion-euro hostile bid, Reuters reported. And yet, BBVA CEO Onur Genç told CNBC on Wednesday that the takeover was “moving according to plan.”

    Spanish authorities, which have the power to block any merger or acquisition of a bank, have voiced their opposition to BBVA’s hostile takeover bid, citing potentially harmful effects on the county’s financial system.

    Mario Centeno, a member of the European Central Bank’s Governing Council, told CNBC’s “Street Signs Europe” on Tuesday that European policymakers have been working for more than a decade to establish a “true banking union” — and continue to do so.

    The unfinished project means that the intervention framework for banking crises continues to be “an awkward mix” of national and EU authorities and instruments, according to Brussels-based think tank Bruegel.

    ECB's Centeno on banking consolidation in Europe

    Asked whether comments opposing banking consolidation from leading politicians in both Germany and Spain were a source of frustration, the ECB’s Centeno replied, “We have been working very hard in Europe to bring [the] banking union to completion. There are still some issues on the table, that we all know.”

    What happens next?

    Thomas Schweppe, founder of Frankfurt-based advisory firm 7Square and a former Goldman mergers and acquisitions banker, said Germany’s decision — intentional or otherwise — to sell a small 4.5% stake to UniCredit earlier this month meant the bank was now “in play” for a potential takeover.

    “I think we are, you know, proposing a European banking landscape and also in Germany, they are a proponent of strong European banks that have a good capital base and are managed well,” Schweppe told CNBC’s “Squawk Box Europe” on Wednesday.

    “If we mean this seriously, I think we need to accept that European consolidation also means that a German bank becomes the acquired party,” he added.

    Asked for a timeline on how long the UniCredit-Commerzbank saga was likely to drag on, Schweppe said it could run for months, “if not a year or more.” He cited a lengthy regulatory process and the need for talks between all stakeholders to find a “palatable” solution.

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  • Caught cold by UniCredit’s swoop on Commerzbank, Germany will want to avoid a national embarrassment

    Caught cold by UniCredit’s swoop on Commerzbank, Germany will want to avoid a national embarrassment

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    A protestor holds a placard with a slogan reading “Stop Merger Horror” during a union demonstration outside the Commerzbank AG headquarters in Frankfurt, Germany, on Tuesday, Sept. 24, 2024.

    Bloomberg | Bloomberg | Getty Images

    Italy’s UniCredit appears to have caught German authorities off guard with a potential multibillion-euro merger of Frankfurt-based Commerzbank, a move that has triggered a fiery response from Berlin.

    Market observers told CNBC that the swoop may have provoked a sense of national embarrassment among Germany’s government, which firmly opposes the move, while it’s been argued that the outcome of the takeover attempt could even put the meaning of the European project at stake.

    Milan-based UniCredit announced on Monday that it had increased its stake in Commerzbank to around 21% and submitted a request to boost that holding to up to 29.9%. It follows UniCredit’s move to take a 9% stake in Commerzbank earlier this month.

    “If UniCredit can take Commerzbank and take it to their level of efficiency, there’s a tremendous upside in terms of increased profitability,” Octavio Marenzi, CEO of consulting firm Opimas, told CNBC’s “Squawk Box Europe” on Tuesday.

    “But [German Chancellor] Olaf Scholz is not an investor. He’s a politician and he’s very concerned about the jobs side of things. And if you look at what UniCredit has done in terms of slimming down things in its Italian operations or particularly in its German operations, it’s been quite impressive,” Marenzi said.

    Scholz on Monday criticized UniCredit’s decision to up the ante on Commerzbank, describing the move as an “unfriendly” and “hostile” attack, Reuters reported.

    Commerzbank’s Deputy Chair Uwe Tschaege, meanwhile, reportedly voiced opposition to a potential takeover by UniCredit on Tuesday. Speaking outside of the lender’s headquarters in central Frankfurt, Tschaege said the message was simple and clear: “We don’t want this.”

    “I feel like vomiting when I hear his promises of cost savings,” Tschaege reportedly added, referring to UniCredit ‘s CEO Andrea Orcel.

    Separately, Stefan Wittman, a Commerzbank supervisory board member, told CNBC on Tuesday that as many as two-thirds of the jobs at the bank could disappear if UniCredit successfully carries out a hostile takeover.

    The bank has yet to respond to a request for comment on Wittmann’s statement.

    German firms facing softer environment, Goldman Sachs Bank Europe CEO says

    Hostile takeover bids are not common in the European banking sector, although Spanish bank BBVA shocked markets in May when it launched an all-share takeover offer for domestic rival Banco Sabadell. The latter Spanish lender rejected the bid.

    Opimas’ Marenzi said the German government and trade unions “are basically looking at this and saying this means we could lose a bunch of jobs in the process — and it could be quite substantial job losses.”

    “The other thing is there might be a bit of a national embarrassment that the Italians are coming in and showing them how to run their banks,” he added.

    A spokesperson for Germany’s government was not immediately available when contacted by CNBC on Tuesday.

    Germany’s Scholz has previously pushed for the completion of a European banking union. Designed in the wake of the 2008 global financial crisis, the European Union’s executive arm announced plans to create a banking union to improve the regulation and supervision of lenders across the region.

    What’s at stake?

    Craig Coben, former global head of equity capital markets at Bank of America, said the German government would need to find “very good” reasons to block UniCredit’s move on Commerzbank, warning that it would also have to be consistent with the principles around European integration.

    “I think it is very difficult for UniCredit to take over or to reach an agreement on Commerzbank without the approval of the German government, just as a practical matter — but I think Germany needs to find a legitimate excuse if it wants to intervene [or] if it wants to block the approach from UniCredit,” Coben told CNBC’s “Squawk Box Europe” on Tuesday.

    The Commerzbank AG headquarters, in the financial district of Frankfurt, Germany, on Thursday, Sept. 12, 2024.

    Emanuele Cremaschi | Getty Images News | Getty Images

    “Germany has signed up to the [EU’s] single market, it has signed up to the single currency, it has signed up to [the] banking union and so it would be inconsistent with those principles to block the merger on the grounds of national interest,” he continued.

    “And I think that’s really what’s at stake here: what is the meaning of [the] banking union? And what is the meaning of the European project?”

    Former European Central Bank chief Mario Draghi said in a report published earlier this month that the European Union needs hundreds of billions of euros in additional investment to meet its key competitiveness targets.

    Draghi, who has previously served as Italian prime minister, also cited the “incomplete” banking union in the report as one factor that continues to hinder competitiveness for the region’s banks.

    — CNBC’s April Roach contributed to this report.

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  • Germany responds to Donald Trump’s debate comments

    Germany responds to Donald Trump’s debate comments

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    Germany is denying an assertion made by former President Donald Trump during the presidential debate Tuesday about the country’s renewable energy industry. 

    “You believe in things like we’re not going to frack, we’re not going to take fossil fuel, we’re not going to do things that are going to be strong, whether you like it or not,” Trump said in his debate against Vice President Kamala Harris. “Germany tried that, and within one year, they were back to building normal energy plants.”

    But on Wednesday, Germany’s Federal Foreign Office decided to issue a rebuttal, echoing the former president’s language. 

    “Like it or not: Germany’s energy system is fully operational, with more than 50% renewables,” the Federal Foreign Office shared on X. “And we are shutting down – not building – coal & nuclear plants. Coal will be off the grid by 2038 at the latest.”

    The German Foreign Office also poked at Trump for another comment he made during the debate.

    “PS: We also don’t eat cats and dogs,” it concluded, referring to Trump’s debunked claim that Haitian migrants had eaten pets in Springfield, Ohio. The town’s authorities have said that there have not been credible reports about migrants targeting pets.

    “Contradiction with facts and humor — that is the right answer to disinformation,” German State Minister Anna Lührmann added on Thursday about her government’s response. “As democrats, we can no longer allow ourselves to leave false statements uncommented.”

    Climate change and energy policies are raised frequently during both candidates’ election campaigns. Trump also claimed that if Harris wins the election, fracking in Pennsylvania “will end on day one.”

    “Fossil fuel will be dead,” Trump said. “We’ll go back to windmills, and we’ll go back to solar.”

    Before she became vice president, Harris, who was a senator representing California, pushed for climate-friendly policies. “There’s no question I’m in favor of banning fracking,” Harris said in 2019. But as vice president, she has changed course.

    “I have not banned fracking as vice president,” Harris told Trump. “My position is that we have got to invest in diverse sources of energy so we reduce our reliance on foreign oil.”

    After Russia’s invasion of Ukraine, energy costs in Germany have spiked as Berlin seeks alternatives to Russian energy. The United States exported over 200 million cubic feet of liquid natural gas to Germany last year. Russian natural gas volumes in the German energy market saw a 30% decline in 2022.

    “Yes, Germany is serious about the energy transition,” the German embassy in Washington said in a post on X. “Our energy system is fully operational, with > 50% renewables. Coal will be off the grid by 2038 at the latest – while we’re investing billions to create new opportunities in former coal regions.”

    Germany shut down its last three nuclear power plants last year, as it plans to transition the majority of its energy consumption to renewable energy by 2050. But the country still needs “additional measures” to reach its climate targets, according to the German Environment Agency.

    As president, Trump criticized Berlin’s energy policy for relying heavily on Russia. In 2019, he signed the Protecting Europe’s Energy Security Act into law, which would sanction vessels participating in the construction of the Nord Stream 2, an undersea pipeline built by Russia’s state-run energy giant Gazprom. 

    In May 2021, the State Department waived previously imposed sanctions, but the waiver was terminated a day before Russia invaded Ukraine. In September 2022, a series of explosions, first detected by Scandinavian authorities off the Danish island of Bornholm, ruptured the pipeline. Last month, German prosecutors issued an arrest warrant for a Ukrainian national, whom they said had resided in Poland, but he had left the country.

    The U.S. denied any involvement in the attack and condemned the sabotage against the pipeline.

    During the debate, Trump still attacked the Biden administration over the pipeline. “Why does Biden go in and kill the Keystone pipeline and approve the single biggest deal that Russia has ever made, Nord Stream 2? Because they’re weak, and they’re ineffective,” Trump said, asking Harris about her administration’s foreign policy.

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  • Inside rise of far right TikTokers propelling Germany back to dark days of Nazis

    Inside rise of far right TikTokers propelling Germany back to dark days of Nazis

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    IT is the first far-right party to win German state elections since the Nazis – and the success of Alternative for Germany is down to younger supporters.

    Paramedic Severin Kohler says that it is now trendy among Generation Z TikTokers to back the organisation known as AfD, which is led in the state of Thuringia by a man who has been labelled a “fascist”.

    9

    AfD fans Severin Kohler and Carolin LichtenheldCredit: Paul Edwards
    AfD MP Torben Braga — who, curiously for a German anti-immigration party, was born in Brazil and is of Brazilian and Welsh ancestry

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    AfD MP Torben Braga — who, curiously for a German anti-immigration party, was born in Brazil and is of Brazilian and Welsh ancestryCredit: Paul Edwards
    Professor Reinhard Schramm, who lost 20 close family to the Nazi extermination camps, has had death threats and bullets sent to him in the post

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    Professor Reinhard Schramm, who lost 20 close family to the Nazi extermination camps, has had death threats and bullets sent to him in the postCredit: Paul Edwards

    Severin, 28, a leader of the party’s youth wing Junge Alternative, told me: “It’s a matter of a rebellion against their parents. Being from the right is punk now.”

    Almost 40 per cent of 18 to 24-year-old voters backed the AfD in Thuringia, central Germany, last week. In neighbouring Saxony, 31 per cent did the same.

    Yet the local branches of the party in the two states have been classified as “right-wing extremist” by the nation’s domestic intelligence agency.

    The AfD’s victory in Thuringia has sent a shudder through Germany, which has spent decades facing up to its Nazi past.

    On the Instagram page of Carolin Lichtenheld, who leads Thuringia’s Junge Alternative, the 21-year-old trainee pharmacist is shown brndishing a megaphone at a rally, with the caption: “Ready to fight for the preservation of our homeland and for our future. We are the youth who are ready to resist a woke society.”

    The image is hashtagged with the word “reconquista” — a reference to the recapture by Christian kings of Spain and Portugal from the Muslim Moors.

    Felix Steiner, from German far-right monitoring group Mobile Consulting, agrees that young voters are attracted to the AfD.

    The activist told The Sun: “Almost no other party is so active on social media platforms, especially TikTok. The message is, ‘Young people, come to us. We are the next movement’.”

    Youth campaigner Severin wears a T-shirt bearing the name Bjorn Hocke — the AfD’s leader in Thuringia who has twice been convicted this year of using Nazi slogans.

    Former history teacher Hocke harnessed the power of TikTok to target the youth vote during the election.

    Incredible story of Nazi hunter and holocaust refugee

    In one post he leads a cavalcade of motorcyclists riding models made by Simson — a brand associated with national pride by the far right — in the old Communist East Germany.

    Yet critics say that behind Hocke’s glossy social media campaigning is a man who is a political “danger”.

    In 2019 a court in Thuringia ruled it was not libellous to call Hocke a “fascist” as the opinion had a “verifiable, factual basis”.

    Thin-lipped and greying, Hocke once described Berlin’s Holocaust Memorial as a “monument of shame” and demanded a “180-degree turn” in Germany’s culture of remembrance.

    The father-of-four once spoke of the Germans “longing for a historical figure” who would “heal the wounds of the people”.

    Ulrike Grosse-Rothig, leader of Thuringia’s left-wing Die Linke party, told The Sun: “Hocke is a die-hard fascist. He’s a danger for German society, its voters and to democracy.”

    Former AfD Thuringia MP Oskar Helmerich has called Hocke “a dangerous man”.

    Little wonder Thuringia’s small Jewish community has been fearful.

    Professor Reinhard Schramm, who lost 20 close family to the Nazi extermination camps, has had death threats and bullets sent to him in the post from unknown sources.

    Speaking at a synagogue in Thuringia’s largest city Erfurt, the 80-year-old Holocaust survivor told me: “The Jewish community is insecure and some are afraid. They are quite allergically against the AfD. This is not a normal party.”

    Of Hocke’s demand for a “180- degree turn” in Germany’s culture of remembrance, the grandfather-of-three says: “So does this mean that I am not supposed to speak about my grandmother who was gassed to death in a German gas chamber?”

    ‘Some are afraid’

    Severin insists the AfD is “against political violence”, adding: “We don’t have anything in common with people sending bullets to synagogues.”

    The AfD won Thuringia — a largely rural state in central Germany — with just under 33 per cent of the vote.

    It’s the latest European convulsion of the far right which has seen rampaging thugs attempt to torch migrant hotels in Britain and Marine Le Pen’s National Rally topping parliamentary elections in France.

    In Germany — as elsewhere — the touchstone issue has been immigration.

    Days before the Thuringia vote, a Syrian asylum seeker went on a knife rampage, killing three in the west German city of Solingen.

    It emerged that the man — linked to Islamic State — had previously had his claim for asylum turned down but he had not been deported because the authorities could not find him.

    Germany’s lame duck premier Olaf Scholz promised to speed up deportations and other mainstream parties followed suit with tough talk on immigration, including the conservative Christian Democratic Union.

    Andreas Buhl, a Thuringian MP for Merkel’s CDU, concedes that the former Chancellor’s open border policy was wrong

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    Andreas Buhl, a Thuringian MP for Merkel’s CDU, concedes that the former Chancellor’s open border policy was wrongCredit: Paul Edwards
    A CDU poster calling to stop illegal migration

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    A CDU poster calling to stop illegal migrationCredit: Paul Edwards
    An anti-multicultural banner

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    An anti-multicultural bannerCredit: Paul Edwards

    Yesterday, it was reported that Germany’s interior minister Nancy Faeser has told the EU that controls will be brought in on all the country’s land borders, to deal with the “continuing burden” of migration and “Islamist terrorism”.

    And last week it emerged Germany is considering deporting migrants to Rwanda where it could use asylum facilities abandoned by the UK.

    Britain, where populists Reform won four million votes at the General Election, will be watching whether moves towards the AfD’s turf will win back voters.

    As well as a hardline stance on immigration, the AfD is also against what it says are over-zealous green policies, and it wants to halt weapons supplies to Ukraine.

    At the Thuringian parliament in Erfurt, I met key Hocke lieutenant Torben Braga — who, curiously for a German anti-immigration party, was born in Brazil and is of Brazilian and Welsh ancestry.

    The 33-year-old Thuringia MP says: “Bjorn Hocke doesn’t have a single fascist vein in his body.”

    ‘Political firewall’

    Of his boss’s infamous “shame” reference to the Berlin Holocaust memorial, Braga says he meant it was “a shameful part of our history”.

    Braga believes the security services are monitoring him and suggests “provocateurs” from those agencies were behind the “two or three cases” of people doing the Hitler salute at a recent rally in Erfurt.

    Picturesque Erfurt is, at first glance, perhaps an unlikely setting for a far-right upsurge. Half-timbered town houses crowd flower-bedecked medieval squares where tourists enjoy beers on its many restaurant terraces.

    A far-right mob gather at a demonstration in Solingen last month

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    A far-right mob gather at a demonstration in Solingen last monthCredit: EPA
    Far-right AfD supporters wave German flags, including one adorned with an Iron Cross

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    Far-right AfD supporters wave German flags, including one adorned with an Iron CrossCredit: Getty
    The AfD party’s slick TikTok videos

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    The AfD party’s slick TikTok videosCredit: tiktok/@afd

    This summer the England squad had their Euro 2024 training base a short drive away and Three Lions star Jude Bellingham was spotted having coffee in the city of 215,000.

    Yet Thuringia has seen too much history in the 20th century.

    At nearby Buchenwald concentration camp, the Nazis executed, starved or worked to death more than 56,000 prisoners.

    After the Americans liberated Thuringia, it fell under Soviet control.

    From 1949 to 1990 it was part of the Communist state of East Germany.

    Post-German reunification, Thuringia and other eastern states struggled economically, with many youngsters heading to western Germany.

    Immigration became a key political battleground after conservative Chancellor Angela Merkel opened Germany’s borders to a million refugees in 2015 and 2016.

    Last year around 334,000 people claimed asylum in Germany — more than France and Spain combined. In the UK the figure was just under 85,000 people.

    The AfD — formed in 2013 as a Eurosceptic party — has seen its fortunes rise as it hammered home its anti-immigration stance.

    No other party is so active on social media platforms, especially TikTok.The AfD post pictures of demonstrations. The message is: ‘Young people come to us. We are the next movement’

    It called for a ban on burqas, minarets, and call to prayer using the slogan, “Islam is not a part of Germany” in 2016.

    In Thuringia, Hocke led a radical AfD faction called The Wing, deemed beyond the pale even by many in his own party.

    Andreas Buhl, a Thuringian MP for Merkel’s CDU, concedes that the former Chancellor’s open border policy was wrong.

    He told me: “In hindsight, it should have been clearer that you can also push people back at the border who have already entered another European country.”

    He pledged, as other mainstream parties have, not to work with the AfD, creating a political firewall likely to block it from taking power.

    It raises the spectre that those who voted for it may come to believe that democracy is failing them.

    But anti-far-right activist Felix Steiner says only around half of AfD supporters are wedded to their hardline doctrines, with the rest supporting them as a protest vote.

    He added: “The AfD result could be halved if voters were satisfied with other parties’ policies.”

    The fight for the political soul of Germany’s Generation Z goes on.

    It’s a battle of ideas that may be won or lost on the feeds of TikTok and Instagram.

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    Oliver Harvey

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  • A Porsche-backed startup is building a massive battery recycling plant to boost Europe’s EV industry

    A Porsche-backed startup is building a massive battery recycling plant to boost Europe’s EV industry

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    Cylib, a startup backed by Porsche and Bosch, is building a huge electric vehicle battery recycling facility in Dormagen, a town in Germany’s North Rhine-Westphalia region.

    Cylib

    A massive battery recycling plant is being built in Germany by Cylib, a startup looking to reduce waste from EV batteries that have reached the end of their life.

    Cylib, which is backed by luxury sports car firm Porsche and appliances maker Bosch, on Monday started work on the new site in the town of Dormagen, in the German federal state of North Rhine-Westphalia.

    More than 180 million euros ($200 million) is being pumped into the facility, which is expected to span 236,000 square feet and will produce recycled batteries for the electric vehicle industry in Europe.

    Cylib says its facility will be the largest end-to-end lithium-ion battery recycling facility in Europe.

    It plans to recycle roughly 30,000 metric tons of end-of-life batteries at the facility each year, making it larger in scale than the current biggest plant, Hydrovolt, a joint venture between Swedish EV battery maker Northvolt and Norway-based aluminum and renewable energy firm Hydro.

    Hydrovolt has capacity to recycle 12,000 metric tons of end-of-life batteries annually, according to Hydro’s website.

    Recycled batteries produced by Cylib’s new facility are expected to be used by Porsche, which invested in the startup as part of a 55 million euro funding round, a source familiar with the matter told CNBC.

    The source, who preferred to remain anonymous as the information is not yet public, added that the plans are still in the early stages and have not yet been formalized.

    Asked about Porsche’s involvement in the project, a Cylib spokesperson said that investments from partners like Porsche are “strategic,” adding that it is working closely with its investors about process industrialization and commercial partnerships.

    Crucial for the EV transition

    Battery recycling is a key priority for the European Union, which is looking to ensure the sustainable development of batteries needed to fuel the transition to electric vehicles.

    Founded in 2022 by German entrepreneur Lilian Schwich, her husband Gideon Schwich, and Paul Sabarny, Cylib uses water-based lithium and graphite recovery techniques to repurpose materials from batteries that have hit the end of their lifespan.

    Earlier this year, the firm raised 55 million euros of financing from investors including climate-focused venture capital firm World Fund, Porsche Ventures, Bosch, and DeepTech & Climate Fonds.

    Cylib said the new plant would primarily serve automotive, battery manufacturing and chemicals clients. The startup wants it to be the first of many, with further facilities planned elsewhere in Germany and Europe within the next few years.

    The new facility is being built on a brownfield site located at Chempark, an industrial space used primarily by the chemicals industry. Cylib said that the location was strategic, with preexisting supply chains already located on-site.

    Operations at the plant are scheduled to commence in 2026. The move is key to Cylib’s ability to reach mass production, said CEO Lilian Schwich.

    “Cylib reaching industrial scale production will be a key driver in building a robust European battery infrastructure,” Schwich said in a press statement.

    “Battery recycling is pioneering the circular economy, proving that economic success is compatible with reduced environmental impact,” she added.

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  • German president inaugurates the rebuilt tower of a church with Nazi-era historical baggage

    German president inaugurates the rebuilt tower of a church with Nazi-era historical baggage

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    BERLIN (AP) — Germany’s president on Thursday inaugurated the rebuilt tower of a church that became associated with the Nazis’ takeover of power and whose remains were demolished under communist rule.

    President Frank-Walter Steinmeier said it offers an opportunity to reflect on the country’s complicated past amid a surge in authoritarian and antidemocratic attitudes.

    The baroque tower of the Garrison Church, rebuilt with a viewing platform 57 meters (187 feet) above street level, rises over the center of Potsdam, just outside Berlin. Mayor Mike Schubert said it “provides a new view over the expanse of our city and also into the depths and the abysses of our history.”

    On March 21, 1933, the Garrison Church, or Garnisonkirche, was the scene of the first opening of parliament after Adolf Hitler became chancellor — weeks after the fire at the Reichstag building in Berlin that was followed by the suspension of civil liberties.

    Outside the church, Hitler shook hands with President Paul von Hindenburg. The scene came to symbolize the alliance of the “new” and “old” Germany, between the Nazis and conservative traditionalists.

    The church was originally built in the 1730s to serve the Prussian royal court and the military. It burned out in bombing shortly before the end of World War II in 1945, and the remains of the tower were blown up under East Germany’s communist government in 1968.

    Ambitions to rebuild the church — and opposition to the plans — date back to the 1990s. The partial reconstruction was eventually carried out by a foundation backed by the Protestant church.

    Critics view the church as a symbol of militarism and a place the far-right could identify with. More than 100 people demonstrated opposite the tower Thursday in a protest organized by a group that has opposed the rebuilding.

    Backers aim to counter the opposition with an exhibition taking a critical look at the history of the site. The words “Guide our feet into the way of peace” are inscribed into the base of the rebuilt tower in five languages.

    The regional Protestant bishop, Christian Stäblein, pledged at the inauguration ceremony to ensure that “the enemies of democracy and peace … have no place here.”

    Steinmeier acknowledged that the road to rebuilding the tower “was long, it was complicated and, as we can hear outside, it remains contentious.”

    “This place challenges us,” he said. “It confronts us with its and with our history.”

    Under the kaisers, preachers at the church “put religion into the service of nationalist propaganda, glorified war and unconditional obedience,” Steinmeier said. After the end of World War I and the monarchy, it still “attracted antidemocratic forces.”

    But he said the building’s hefty historical baggage, and the debate about it, offers opportunities today.

    Concern about the strength of the far right has mounted in Germany in recent months. The far-right Alternative for Germany party appears on course for strong performances in three state elections in the formerly communist east — including in Brandenburg, whose capital Potsdam is — over the next month.

    “Contempt for democracy and its institutions, fascination with authoritarianism and exaggerated nationalism unfortunately are not just yesterday’s issues — they are alarmingly topical,” the president said. “The new Garrison Church can be a place where we develop an awareness for historical contexts … and critically question Prussian and German history. More than that, we can reflect on how to deal with history.”

    The rebuilt tower stands alongside a communist-era data processing center, which now serves as a working place for artists. Steinmeier, who was the patron of the rebuilding project, said that center should be preserved. There are no plans to rebuild the nave of the church.

    The reconstruction cost about 42 million euros ($46 million), the majority provided by the federal government, according to the foundation behind it. The tower opens to the public starting Friday.

    Potsdam is home to a range of historical sites including the Sanssouci Palace and its park, and the Cecilienhof Palace where the wartime allies’ Potsdam conference was held in 1945.

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  • Germany’s Far Right Is in a Panic Over Telegram

    Germany’s Far Right Is in a Panic Over Telegram

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    Soon after the arrest of Telegram founder and CEO Pavel Durov, a warning that was viewed more than 85,000 times started circulating among Germany’s far right: “Back up your Telegram data as quickly as you can and clean your account.”

    The message came from Kim Dotcom, the embattled German founder of the now-defunct digital piracy website Megaupload who is set to be extradited from New Zealand, and who knows a thing or two about facing penalties for illegal activity on the internet.

    Telegram users may have reason to fear after French authorities threw the book at Durov, charging him with complicity in crimes that take place on the app, including the sharing of child pornography and the trading of narcotics. If Durov can be held liable for crimes on the app, so too can the criminals perpetrating them, the logic goes.

    Researchers at Germany’s Center for Monitoring, Analysis, and Strategy (CeMAS) track around 3,000 channels and 2,000 groups linked to the German far right and conspiracy movements. Users are known to post racist and antisemitic hate speech, and some groups contain Nazi symbols, Holocaust denial, and calls to violence, openly flouting Germany’s strict criminal code. But a mass exodus from the platform, where groups have spent the past five years building a global infrastructure for radicalization and offline demonstrations, would be tantamount to starting from scratch online.

    “If you’re a terrorist or you’re an extremist, you’re going to follow the path of least resistance, and in this particular case, that probably means Telegram,” Adam Hadley, the founder and executive director of the United Nations–backed organization Tech Against Terrorism, tells WIRED.

    Durov’s arrest is a shot across the bow for Telegram, which now suddenly finds itself in the sights of European law enforcement and regulators. Neo-Nazis’ favorite app is staring down an existential threat, and they’re not quite sure what to do about it.

    A ‘Bridge Technology’

    Alarm spread quickly the Saturday of Durov’s arrest. Just 90 minutes after French media reported that Durov’s private jet had been intercepted by authorities at Paris’ Le Bourget Airport, a far-right channel posted that his arrest “may have political reasons and be a tool to gain access to personal data of Telegram users.”

    The channel is associated with the Reichsbürger movement, which believes Germany is not a sovereign state and is still occupied by Allied powers. German police thwarted their coup plot in 2022, discovering a cache of more than $500,000 in gold and cash, as well as hundreds of guns, knives, ballistic helmets, and ammunition rounds.

    Similar messages began proliferating across the app. That night, Austrian extremist Martin Sellner wrote—the translation here is via Google’s translation tool—that “the ‘liberal West’ is switching off the democracy simulation. All communication channels may soon collapse. Will Musk be arrested next?” The message was viewed more than 40,000 times as estimated by TGStat, a Telegram analytics tool, which provided the view counts cited in this story.

    Sellner was banned from entering Germany in March for being the keynote speaker at the far-right Alternative für Deutschland (AfD) Party’s ill-famed November Potsdam conference. There, he presented a plan to members of Germany’s surging far-right party on conducting mass deportations once it came into power. AfD emerged victorious Sunday in a state election in eastern Germany, granting the far right a historic first since World War II.

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    Josh Axelrod

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  • Volkswagen says it could close plant in Germany for the first time ever

    Volkswagen says it could close plant in Germany for the first time ever

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    Are fewer people buying electric vehicles?


    Are fewer people buying electric vehicles?

    05:45

    Volkswagen says auto industry headwinds mean the German automaker can’t rule out plant closings in its home country, while the company is also dropping a longstanding job protection pledge that would have barred layoffs through 2029.

    “The European automotive industry is in a very demanding and serious situation,” Oliver Blume, Volkswagen Group CEO, said in a statement Monday.

    He cited new competitors entering the European markets, Germany’s deteriorating position as a manufacturing location and the need to “act decisively.”

    A Volkwagen plant closure in Germany would mark the first time the automaker, which was formed in 1937, had closed a domestic factory, according to Bloomberg News. It would also be the first time the company had shuttered any of its manufacturing plants since its U.S. facility in Westmoreland, Pennsylvania, closed in 1988, the dpa news agency reported.

    Thomas Schaefer, the CEO of the Volkswagen Passenger Cars division, said efforts to reduce costs were “yielding results” but that the “headwinds have become significantly stronger.”

    Mounting competition from China

    European automakers are facing increased competition from inexpensive Chinese electric cars. Volkswagen’s half-year results indicate it will not achieve its target for 10 billion euros ($11 billion) in cost savings by 2026, the company said.

    The discussion around closures and layoffs is for the company’s core Volkswagen brand. The brand saw operating earnings sag to 966 million euros ($1.1 billion) from 1.64 billion euros in the year-earlier period.

    The group also includes luxury makes Audi and Porsche, which have higher profit margins than the mass-market vehicles made by Volkswagen, as well as SEAT and Skoda.

    The company has sought to cut costs through early retirements and buyouts that avoid forced layoffs, but is now saying those measures may not be enough. Volkswagen has some 120,000 workers in Germany.

    Union officials and worker representatives attacked the idea of closings or layoffs. Management’s approach is “not only shortsighted, but dangerous, as it risks destroying the heart of Volkswagen,” Thorsten Groeger, chief negotiator with VW for the IG Metall industrial union, said on the union’s website.

    Top employee representative Daniela Cavallo said that “management has failed… The consequence is an attack on our employees, our locations and our labor agreements. There will be no plant closings with us.”

    The governor of Germany’s Lower Saxony region, Stephan Weil, who sits on the company’s board of directors, agreed the company needed to take action but called on Volkswagen to avoid plant closings by relying on alternative ways to reduce costs: “The state government will pay particularly close attention to that,” he said in a statement reported by the dpa news agency.


    What to know about Biden’s new China tariffs

    05:21

    The European Union in July moved to impose provisional tariffs on Chinese EVs, although the EU will only collect the levies if talks with Beijing fail to yield a trade deal. The levies would consist of 17.4% on cars from BYD, 19.9% from Geely and 37.6% for vehicles exported by China’s state-owned SAIC. Geely’s brands include Polestar and Sweden’s Volvo, while SAIC owns Britain’s MG.

    President Joe Biden in May announced tariffs of up to 100% on Chinese EVs, quadrupling the current tariff of 25%. 

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  • Germany election results show far-right party set to win first state vote

    Germany election results show far-right party set to win first state vote

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    Germans could see change in political landscape as voting begins


    Germans could see change in political landscape as voting begins

    00:33

     The far-right Alternative for Germany won a state election for the first time Sunday in the country’s east, and was set to finish at least a very close second to mainstream conservatives in a second vote, projections showed.

    A new party founded by a prominent leftist also made an immediate impact, while the parties in Chancellor Olaf Scholz’s unpopular national government obtained extremely weak results.

    Projections for ARD and ZDF public television based on exit polls and partial counting showed Alternative for Germany winning 32-33% of the vote in Thuringia — well ahead of the center-right Christian Democratic Union, the main national opposition party, with about 24%.

    In neighboring Saxony, projections put support for the CDU, which has led the state since German reunification in 1990, at 31.5-31.8% and AfD on 30.7-31.4%.

    “An openly right-wing extremist party has become the strongest force in a state parliament for the first time since 1949, and that causes many people very deep concern and fear,” said Omid Nouripour, a leader of the Greens, one of the national governing parties.

    Thuringia state election
    Germany’s “Buendnis Sahra Wagenknecht” (BSW) party leader Sahra Wagenknecht, the party’s top candidate Katja Wolf and Steffen Schuetz applaud after first exit polls in Thuringia state elections, in Erfurt, Germany, September 1, 2024.

    Christian Mang / REUTERS


    Other parties say they won’t put AfD in power by joining it in a coalition. Even so, its strength is likely to make it extremely difficult to form new state governments, forcing other parties into exotic new coalitions. The new Sahra Wagenknecht Alliance, or BSW, took up to 16% of the vote in Thuringia and 12% in Saxony, adding another level of complication.

    “This is a historic success for us,” Alice Weidel, a national co-leader of AfD, told ARD. She described the result as a “requiem” for Scholz’s coalition.

    The CDU’s national general secretary, Carsten Linnemann, said that “voters in both states knew that we wouldn’t form a coalition with AfD, and it will stay that way — we are very, very clear on this.”

    Weidel denounced that as “pure ignorance” and said that “voters want AfD to participate in a government.”

    Deep discontent with a national government notorious for infighting, anti-immigration sentiment and skepticism toward German military aid for Ukraine are among the factors that have contributed to support for populist parties in the region, which is less prosperous than western Germany.

    AfD is at its strongest in the formerly communist east, and the domestic intelligence agency has the party’s branches in both Saxony and Thuringia under official surveillance as “proven right-wing extremist” groups. Its leader in Thuringia, Björn Höcke, has been convicted of knowingly using a Nazi slogan at political events, but is appealing.

    Höcke bristled when an ARD interviewer mentioned the intelligence agency’s assessment, responding: “Please stop stigmatizing me. We are the No. 1 party in Thuringia. You don’t want to classify one-third of the voters in Thuringia as right-wing extremist.”

    He said he felt “a great, great deal of pride” in Sunday’s result for his 11-year-old party and “the old parties should show humility.”

    Scholz’s center-left Social Democrats were at least set to remain in the two state legislatures with single-digit support, but the environmentalist Greens were set to lose their seats in Thuringia. The two parties were the junior coalition partners in both outgoing state governments. The third party in the national government, the pro-business Free Democrats, also lost its seats in Thuringia. It had no representation in Saxony.

    A third state election follows Sept. 22 in another eastern state, Brandenburg, currently led by Scholz’s party. Germany’s next national election is due in a little over a year.

    Protest after Thuringia state election
    Protestors demonstrate against the Alternative fur Deutschland (AfD) after first exit polls in the Thuringia state elections in Erfurt, Germany, September 1, 2024.

    Christian Mang / REUTERS


    Thuringia’s politics are particularly complicated because the Left Party of outgoing governor Bodo Ramelow has slumped into electoral insignificance nationally. It lost nearly two-thirds of its support compared with five years ago, dropping to around 12%.

    Sahra Wagenknecht, long one of its best-known figures, left last year to form her own party, which is now outperforming the Left. Wagenknecht celebrated that party’s success, underlined its refusal to work with AfD’s Höcke and said she hopes it can form “a good government” with the CDU.

    The CDU has long refused to work with the Left Party, descended from East Germany’s ruling communists. It hasn’t ruled out working with Wagenknecht’s BSW, which will probably be needed to form any government without AfD at least in Thuringia. BSW is also at its strongest in the east.

    AfD has tapped into high anti-immigration sentiment in the region. The Aug. 23 knife attack in the western city of Solingen in which a suspected extremist from Syria is accused of killing three people helped push the issue back to the top of Germany’s political agenda and prompted Scholz’s government to announce new restrictions on knives and new measures to ease deportations.

    Wagenknecht’s BSW combines left-wing economic policy with an immigration-skeptic agenda. The CDU has also stepped up pressure on the national government for a tougher stance on immigration.

    Germany’s stance toward Russia’s war in Ukraine is also a sensitive issue in the east. Berlin is Ukraine’s second-biggest weapons supplier after the United States; those weapons deliveries are something both AfD and BSW oppose. Wagenknecht has also assailed a recent decision by the German government and the U.S. to begin deployments of long-range missiles to Germany in 2026.

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  • Far-right party aims for wins in 2 state elections as Germany’s government flounders

    Far-right party aims for wins in 2 state elections as Germany’s government flounders

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    BERLIN (AP) — The far-right Alternative for Germany could become the strongest party for the first time in two state elections Sunday in eastern Germany, while a months-old party founded by a prominent leftist also hopes to shake up the picture as the national government has squabbled its way to deep unpopularity.

    Germany’s main opposition conservative party hopes to keep Alternative for Germany at bay in Saxony and Thuringia, home to around 4.1 million and 2.1 million people, respectively. But prospects look grim for the three parties in Chancellor Olaf Scholz’s governing coalition, whose constant infighting has added to a flatlining economy and other problems to turn voters off.

    Wins for Alternative for Germany, or AfD, would be a potent signal for the party just over a year before the next national election is due. But it would most likely need a coalition partner to govern, and it’s highly unlikely anyone else will agree to put it in power. Even so, its strength could make forming new state governments extremely difficult.

    Problem in Berlin

    High ratings for AfD and the new Sahra Wagenknecht Alliance, both at their strongest in Germany’s formerly communist east, have been fed in part by discontent with the national government. Scholz’s alliance argued throughout the campaign for the European Parliament election in June and obtained dismal results. The internal hostilities have intensified over a summer plagued by disagreements about the 2025 budget.

    Scholz’s center-left Social Democrats, the environmentalist Greens and the pro-business Free Democrats were weak in these two states to start with, though the former two parties are the junior partners in both outgoing regional governments. They now risk dropping under the 5% support needed to stay in the state legislatures.

    Over 50 countries go to the polls in 2024

    Scholz said recently that “gun smoke from the battlefield” is masking the successes of his government of uneasy allies, which set out to modernize Germany. Justice Minister Marco Buschmann said that the government isn’t a “self-help group.” One of the Greens’ national leaders, Omid Nouripour, described the coalition as a “transitional government.”

    The mainstream opposition Christian Democratic Union, or CDU, won the European Parliament election. It has led Saxony since German reunification in 1990 and hopes that governor Michael Kretschmer can power it past AfD again, as he did five years ago. In Thuringia, surveys show it trailing AfD, but it hopes to cobble together a governing coalition.

    Thuringia’s politics are particularly complicated because the Left Party of governor Bodo Ramelow has slumped into electoral insigificance nationally. Wagenknecht, long one of its best-known figures, left last year to form a new party that is now outperforming it.

    Migration, war and peace

    AfD has tapped into high anti-immigration sentiment in the region, with one campaign poster in Thuringia promising “summer, sun, remigration” and depicting a plane with the logo “Deportation-Hansa.”

    A national AfD leader, Alice Weidel, assailed both the governing parties and the CDU — which previously ran Germany under Angela Merkel — for their “policy of uncontrolled mass immigration” following last week’s knife attack in Solingen in which a suspected extremist from Syria is accused of killing three people.

    Wagenknecht’s new party, known by its German acronym BSW, combines left-wing economic policy with a migration-skeptic agenda. The CDU also has stepped up pressure on the national government for a tougher stance on migration.

    Germany’s stance toward Russia’s war in Ukraine is also an issue in these eastern states. Berlin is Ukraine’s second-biggest weapons supplier after the United States; those weapons deliveries are something both AfD and BSW oppose. An AfD poster combining the German and Russian flags declares that “Peace is Everything!”

    Wagenknecht also has assailed a recent decision by the German government and the U.S. to begin deployments of long-range missiles to Germany in 2026. She has declared that her party will only join state governments that have a “clear position for diplomacy and against the preparation of war.”

    Who will govern with whom?

    AfD secured its first mayoral and county government posts last year, but the party hasn’t yet joined a state government. In June, national co-leader Tino Chrupalla said that “the sun of government responsibility must rise for us in the east.”

    That doesn’t look likely in Saxony and Thuringia, where no other party wants to join it in a coalition. The domestic intelligence agency has AfD’s branches in both states under official surveillance as “proven right-wing extremist” groups. Its leader in Thuringia, Björn Höcke, has been convicted of knowingly using a Nazi slogan at political events, but is appealing.

    Depending on how badly the national governing parties perform, that could leave the CDU looking for improbable coalition partners. The party has long refused to ally with Ramelow’s Left Party, which is descended from East Germany’s communist party, but hasn’t ruled out working with Wagenknecht’s BSW.

    The CDU’s national leader, Friedrich Merz, told the RND newspaper group that “we can’t work with” AfD.

    “That would kill the CDU,” he said.

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  • Here’s What the Inside of an Airbus Factory Looks Like

    Here’s What the Inside of an Airbus Factory Looks Like

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    This story originally appeared on WIRED Italia and has been translated from Italian.

    This is the most important moment in the life of an airliner: when the new owner signs for it and picks it up, much like a driver picking up a new car from a dealer.

    The aircraft in question is an Airbus A321neo, and it is parked at Hamburg-Finkenwerder, the German city’s second airport, which Airbus uses for testing, logistics, and delivery of airplanes to customers. Gathered around the plane are pilots and cabin crew, as well as two executives from Wizz Air, the low-cost Hungarian airline that is about to take delivery of it.

    Airlines and manufacturers never disclose how much they pay for individual aircraft—partly because prices depend on many factors, including the number of planes purchased and the commercial history of each individual airline—but buying a plane is never cheap. The base price of a single Airbus A321neo is estimated to be around $110 million.

    This particular plane, registered by Wizz Air as H9-WNM, was produced in Airbus’s Hamburg factory in just over a year. The site is one of the company’s four production centers, the others being in Toulouse, France; Mobile, Alabama; and Tianjin, China. Known as final assembly lines (FAL), these giant workshops are where a plane’s structural parts, on-board electronics, hydraulic and mechanical components, and other pieces all come together.

    The final arming process of an Airbus A320neo in Hamburg.Photograph: Antonio Dini

    But before these components reach the FAL, they need to be manufactured. Some are made internally by Airbus, others by third parties, and together making them involves dozens of factories and centers around the globe. Then there is the formidable logistical challenge of bringing them all together. This complex ballet involves shipments by boat, train, road, and air, with a small fleet of special transport planes—known as Belugas—playing a key role. These aircraft, with their prodigious girth that makes them resemble beluga whales, were created by Airbus to move large components such as fuselages from one production center to another.

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    Antonio Dini

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  • Part of a hotel on Germany’s Mosel River collapses, killing 2 and trapping others for hours

    Part of a hotel on Germany’s Mosel River collapses, killing 2 and trapping others for hours

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    BERLIN (AP) — Part of a hotel in a winemaking town on the Mosel River in western Germany collapsed, authorities said, leaving two people dead and trapping seven others in the wreckage overnight. The last person was rescued some 24 hours later, on Wednesday night.

    Fourteen people were in the hotel in Kroev when one story of the building collapsed at about 11 p.m. on Tuesday. Police said five were able to get out of the building unhurt because they were not in the part that collapsed, but others were trapped.

    Rescuers were able to contact some of them by cellphone. But getting to them proved difficult because the collapse of one story left two ceilings lying on top of each other, according to Joerg Teusch, fire and disaster protection inspector for the Bernkastel-Wittlich district.

    “We have to proceed with caution because the entire building structure is like a house of cards. If we pull on the wrong card, this building is sure to collapse,” he said as rescuers worked through the wreckage on Wednesday morning.

    A woman who was among the seven trapped was the last to be rescued Wednesday night, police said.

    Michael Ebling, the top security official in Rhineland-Palatinate state, where Kroev is located, said the fact that so many people could be rescued “stands out in view of this event, the damage and the dimensions one can see with the naked eye.”

    Among the first to be saved was a 2-year-old child, who was pulled out unharmed, and the child’s mother, who was rescued with minor injuries. The child’s father was rescued later.

    “We all had tears in our eyes and I still feel the same now. The whole story has a very emotional component, because when we arrived, when we looked at the building, it looked like we weren’t taking anyone out,” Teusch said at a news conference.

    Teusch said the cause of the structural collapse is yet to be determined.

    The original hotel building is believed to date back to the 17th century, but additional stories were added around 1980, he said. He added that work was being done on the building on Tuesday, but it wasn’t clear whether there was any link between that and the collapse.

    Regional public broadcaster SWR said that witnesses reported hearing a bang and seeing a large cloud of dust at the time of the collapse.

    The rescue operation involved 250 emergency workers, including drone specialists, as well as rescue dogs.

    “There was no option (to use) stairs, house entrances, doors or windows, because they were simply no longer there,” Teusch said.

    Authorities also evacuated 21 people from three buildings immediately around the damaged hotel. The hotel guests at the time of the collapse were largely German, apart from a Dutch family.

    Two Germans, a man and a woman, died. Rescuers were able to recover one of the bodies but police said they would have to remove a section of the building on Thursday to recover the other.

    Kroev is located along a picturesque section of the Mosel near the larger resort town of Traben-Trarbach. It has about 2,200 inhabitants.

    ___

    Associated Press writer Vanessa Gera in Warsaw, Poland, contributed to this report.

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  • German police say a man has turned himself in, claiming to be behind deadly Solingen festival knife attack

    German police say a man has turned himself in, claiming to be behind deadly Solingen festival knife attack

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    A 26-year-old man turned himself in to police, saying he was responsible for the Solingen knife attack that left three dead and eight wounded at a festival marking the city’s 650th anniversary, German authorities announced early Sunday. 

    Duesseldorf police said in a joint statement with the prosecutor’s office that the man “stated that he was responsible for the attack.”

    “This person’s involvement in the crime is currently being intensively investigated,” the statement said. 

    The suspect is a Syrian citizen who had applied for asylum in Germany, police confirmed to The Associated Press news agency.

    Solingen Knife Assailant Still At Large Following Deadly Attack
    A view of the site of yesterday’s deadly stabbings that left three dead and eight injured on September 24, 2024 in Solingen, Germany.

    Sascha Schuermann / Getty Images


    On Saturday, the Islamic State terror group claimed responsibility for the attack, without providing evidence. The extremist group said on its news site that the attacker targeted Christians and that he carried out the assaults Friday night “to avenge Muslims in Palestine and everywhere.” The claim couldn’t be independently verified.

    The attack comes amid debate over immigration ahead of regional elections next Sunday in Germany’s Saxony and Thuringia regions where anti-immigration parties such as the populist Alternative for Germany are expected to do well. In June, Chancellor Olaf Scholz vowed that the country would start deporting criminals from Afghanistan and Syria again after a knife attack by an Afghan immigrant left one police officer dead and four more people injured.

    On Saturday, a synagogue in France was targeted in an arson attack. French police said they made an arrest early Sunday.

    What happened during the Solingen attack?

    A city of about 160,000 residents near the bigger cities of Cologne and Duesseldorf, Solingen was holding a “Festival of Diversity” to celebrate its anniversary.

    The festival began Friday and was supposed to run through Sunday, with several stages in central streets offering attractions such as live music, cabaret and acrobatics.

    The attack took place in front of one stage. Shortly after 9:30 p.m. on Friday, people alerted police to the presence of an attacker who had wounded several people with a knife. 

    At least three people were killed, authorities said: two men aged 67 and 56 and a 56-year-old woman. Police said the attacker appeared to have deliberately aimed for his victims’ throats.

    Solingen Knife Assailant Still At Large Following Deadly Attack
    Flowers, candles and tributes are placed close to the site of yesterday’s deadly stabbings that left three dead and eight injured on August 24, 2024 in Solingen, Germany.

    Sascha Schuermann / Getty Images


    The festival was canceled as police looked for clues in the cordoned-off square.

    Friday’s attack plunged the city of Solingen into shock and grief. Residents gathered to mourn the dead and injured, placing flowers and notes near the scene of the attack.

    “Warum?” asked one sign placed amid candles and teddy bears. Why?

    Among those asking themselves the question was 62-year-old Cord Boetther, a merchant from Solingen.

    “Why does something like this have to be done? It’s incomprehensible and it hurts,” Boetther said.

    Officials had earlier said a 15-year-old boy was arrested on suspicion he knew about the planned attack and failed to inform authorities, but that he was not the attacker. Two female witnesses told police they overheard the boy and an unknown person before the attack speaking about intentions that corresponded to the bloodshed, officials said.

    The ISIS militant group declared its caliphate in large parts of Iraq and Syria about a decade ago, but now holds no control over any land and has lost many prominent leaders. The group is mostly out of global news headlines.

    Still, it continues to recruit members and claim responsibility for deadly attacks around the world, including lethal operations in Iran and Russia earlier this year that killed dozens of people. Its sleeper cells in Syria and Iraq still carry out attacks on government forces in both countries as well as U.S.-backed Syrian fighters.

    contributed to this report.

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