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      As Germany Election Nears, Merkel Leaves a Strong But Vulnerable Economy

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      Chancellor Angela Merkel steered Europe through crises, and Germany has boomed during her tenure. But she has ducked changes needed to ensure the success lasts, analysts say.During her 16 years as Germany’s chancellor, Angela Merkel has become an international avatar of calm, reason and democratic values for the way she handled crises that included a near financial meltdown of the eurozone, the arrival of more than a million migrants and a pandemic.Today Germany is an economic colossus, the engine of Europe, enjoying prosperity and near full employment despite the pandemic. But can it last?That is the question looming as Ms. Merkel prepares to leave the political stage after national elections on Sept. 26. There are signs that Germany is economically vulnerable, losing competitiveness and unprepared for a future shaped by technology and the rivalry between the United States and China.During her tenure, economists say, Germany neglected to build world-class digital infrastructure, bungled a hasty exit from nuclear power, and became alarmingly dependent on China as a market for its autos and other exports.The China question is especially complex. Germany’s strong growth during Ms. Merkel’s tenure was largely a result of trade with China, which she helped promote. But, increasingly, China is becoming a competitor in areas like industrial machinery and electric vehicles.Economists say that Germany has not invested enough in education and in emerging technologies like artificial intelligence and electric vehicles. Germans pay some of the highest energy prices in the world because Ms. Merkel pushed to close nuclear power plants, without expanding the country’s network of renewable energy sources enough to cover the deficit.Ms. Merkel met President Xi Jinping of China, second right, in Beijing in 2019. Germany has grown strongly through trade with China, but they’re also increasingly competitors. Pool photo by Michael Kappeler“That is going to come back to haunt Germany in the next 10 years,” said Guntram Wolff, director of Bruegel, a research institute in Brussels.There was never much pressure on Ms. Merkel to focus on fundamental economic policy because the German economy has boomed during her tenure. Germany has recovered from the pandemic faster than other European countries like France or Italy.But the pandemic has also exposed Germany’s economic dependence on China.In 2005, China accounted for a fraction of German exports. Last year it surpassed the United States as Germany’s largest trading partner. China is the biggest market by far for the automakers Volkswagen, Mercedes-Benz and BMW. German companies have also thrived by equipping Chinese factories with machine tools and other industrial goods that made China an export powerhouse.Ms. Merkel abandoned her early emphasis on human rights in her relations with the Chinese government and instead encouraged ever deeper economic ties. She hosted Chinese leaders in Berlin and traveled 12 times to Beijing and other cities in China, often with delegations of German business managers. But Germany’s economic entanglement with China has made it increasingly vulnerable to pressure from China’s president, Xi Jinping.Late last year, while Germany took its official turn setting the agenda of the European Union, Ms. Merkel and President Emmanuel Macron of France pushed through an investment accord with China over the objections of the incoming Biden administration, largely bypassing other European allies.“German trade with China dwarfs all other member states, and Germany clearly drives policy on China in the E.U.,” said Theresa Fallon, director of the Center for Russia Europe Asia Studies in Brussels. Germany’s economic dependence on China “is driving a wedge in trans-Atlantic relations,” Ms. Fallon said.An electric Mercedes Benz at the International Motor Show in Munich this month. Germany has only recently moved to match U.S. incentives for buyers of electric cars.Felix Schmitt for The New York TimesIn recent years China has been using what it learned from German companies to compete with them. Chinese carmakers including Nio and BYD are beginning to sell electric vehicles in Europe. China has become the No. 2 exporter of industrial machinery, after Germany, according to the VDMA, which represents German engineering companies.Ms. Merkel’s supporters say that she has helped the German economy dodge some bullets. Her sharp political instincts proved valuable during a eurozone debt crisis that began in 2010 and nearly destroyed the currency that Germany shares with 18 other countries. Ms. Merkel arguably kept hard-liners in her own Christian Democratic Union in check as the European Central Bank printed money to help stricken countries like Greece, Italy and Spain.But her longtime finance minister, Wolfgang Schäuble, was also a leading enforcer of policies that protected German banks while imposing harsh austerity on southern Europe. At the time, Germany refused to back the idea of collective European debt — a position that Ms. Merkel abandoned last year, when faced with the fallout from a pandemic that threatened European unity.Ms. Merkel had some luck on her side, too. The former communist states of East Germany largely caught up during her tenure. And Ms. Merkel profited from reforms made by her predecessor, Gerhard Schröder, which made it easier for firms to hire and fire and put pressure on unemployed people to take low-wage jobs.Mr. Schröder’s economic overhaul led to a sharp decline in unemployment, from more than 11 percent when Ms. Merkel took office to less than 4 percent. But the changes were unpopular because they weakened regulations that shielded Germans from layoffs. They paved the way for Mr. Schröder’s defeat by Ms. Merkel in 2005.The lesson for German politicians was that it was better not to tamper with Germans’ privileges, and for the most part Ms. Merkel did not. Many of the jobs created were low wage and offered limited chances for upward mobility. The result has also been a rise in social disparity, with a rapidly aging population increasingly threatened by poverty.“Over the past 15 to 16 years we have seen a clear increase in the number of people who live below the poverty line and are threatened,” said Marcel Fratzscher, an economist at the D.I.W. research institute in Berlin. “Although the 2010 years were very economically successful, not everyone has benefited.”Ms. Merkel’s failure to invest more in infrastructure, research and education, despite her background as a doctor of physics, also reflects the German aversion to public debt. Mr. Schäuble, as finance minister, enforced fiscal discipline that prioritized budget surpluses over investment. The German Parliament, controlled by Ms. Merkel’s party, even enshrined balanced budgets in law, a so-called debt brake.A school in Berlin last year. Economists say that Germany has not invested enough in education and in emerging technologies.Lena Mucha for The New York TimesThe frugal policies were popular among Germans who associate deficit spending with runaway inflation. But they also let Germany fall behind other nations.Since 2016 Germany has slipped from 15th to 18th place in rankings of digital competitiveness by the Institute for Management and Development in Lausanne, Switzerland, which attributed the decline partly to inferior training and education as well as government regulations. Between 40 to 50 percent of all workers in Germany will need to retrain in digital skills to keep working within the next decade, according to the Labor Ministry. Most German schools lack broadband internet and teachers are reluctant to use digital learning tools — a situation that became woefully apparent during the coronavirus lockdowns.“Technology is strategic. It’s a key instrument in the systemic rivalry we have with China,” Omid Nouripour, a lawmaker who speaks for the Green Party on foreign affairs, said during an online discussion this month organized by Berenberg Bank. “We didn’t create enough awareness of that in the past.”The need for Germany to modernize has become more urgent as climate change has become more tangible, and as a shift to electric vehicles threatens the hegemony of German luxury automakers. Tesla has already taken significant market share from BMW, Mercedes-Benz and Audi, and is building a factory near Berlin to challenge them on their home turf. Until last year, the financial incentives that the German government offered to buyers of electric cars were substantially smaller than the tax credits available in the United States.Wind turbines, mining and coal power in Garzweiler, Germany. Ms. Merkel pushed the country away from nuclear energy, but without renewables quickly filling the gap.Ina Fassbender/Agence France-Presse — Getty Images“What is very important for Germany as an industrial nation, and also for Europe as a place for innovation, is a symbiosis between an ambitious climate policy and a very strong economic policy,” Ola Källenius, the chief executive of Daimler, told reporters at the IAA Mobility trade fair in Munich.Auto executives do not criticize Ms. Merkel, who has been a strong advocate for their interests in Berlin and abroad. But they implicitly fault her government’s sluggish response to the shift to electric vehicles. While Germany has more charging stations per capita than the United States, there are not enough to support increasing demand for electric vehicles.“The framework for this transition of the auto industry is not complete yet,” said Oliver Zipse, the chief executive of BMW and president of the European Automobile Manufacturers’ Association. “We need an industry policy framework that begins with charging infrastructure.”Said Mr. Källenius of Daimler, “We are in an economic competition with the United States, North America with China, with other strong Asian countries. We need an economic policy that ensures that Europe remains attractive for investment.” More

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      German Election: Who Is the Green Party's Annalena Baerbock?

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      Annalena Baerbock, the 40-year-old candidate for the Green Party, is likely to have a say in Germany’s next government, no matter who wins this month’s election.BOCHUM, Germany — The woman who wants to replace Chancellor Angela Merkel strode onto the stage in sneakers and a leather jacket, behind her the steel skeleton of a disused coal mining tower, before her a sea of expectant faces. The warm-up act, a guy with an Elvis quiff draped in a rainbow flag, sang “Imagine.”Annalena Baerbock, the Green Party candidate for chancellor, is asking Germans to do just that. To imagine a country powered entirely by renewable energy. To imagine a relatively unknown and untested 40-year-old as their next chancellor. To imagine her party, which has never before run Germany, leading the government after next month’s election.“This election is not just about what happens in the next four years, it’s about our future,” Ms. Baerbock told the crowd, taking her case to a traditional coal region that closed its last mine three years ago.“We need change to preserve what we love and cherish,” she said in this not necessarily hostile, but skeptical, territory. “Change requires courage, and change is on the ballot on Sept. 26.”Just how much change Germans really want after 16 years of Ms. Merkel remains to be seen. The chancellor made herself indispensable by navigating innumerable crises — financial, migrant, populist and pandemic — and solidifying Germany’s leadership on the continent. Other candidates are competing to see who can be most like her.Ms. Baerbock, by contrast, aims to shake up the status quo. She is challenging Germans to deal with the crises that Ms. Merkel has left largely unattended: decarbonizing the powerful automobile sector; weaning the country off coal; rethinking trade relationships with strategic competitors like China and Russia.It is not always an easy sell. In an unusually close race, there is still an outside chance that the Greens will catch up with Germany’s two incumbent parties. But even if they do not, there is almost no combination of parties imaginable in the next coalition government that does not include them. That makes Ms. Baerbock, her ideas and her party of central importance to Germany’s future. But Germans are still getting to know her.“This election is not just about what happens in the next four years, it’s about our future,” Ms. Baerbock said during her election tour.Laetitia Vancon for The New York TimesA crowd gathered to listen to Ms. Baerbock in Duisburg, in western Germany.Laetitia Vancon for The New York TimesA competitive trampolinist in her youth who became a lawmaker at 32 and has two young daughters, Ms. Baerbock bolted onto Germany’s national political scene only three years ago when she was elected one of the Greens’ two leaders. “Annalena Who?” one newspaper asked at the time.After being nominated in April as the Greens’ first-ever chancellor candidate, Ms. Baerbock briefly surged past her rivals in Germany’s long-dominant parties: Armin Laschet, the leader of the Christian Democrats, and Olaf Scholz of the center-left Social Democrats, who now leads the race.But she fell behind after stumbling repeatedly. Rivals accused Ms. Baerbock of plagiarism after revelations that she had failed to attribute certain passages in a recently published book. Imprecise labeling of some of her memberships led to headlines about her padding her résumé.More recently, she and her party failed to seize on the deadly floods that killed more than 180 people in western Germany to energize her campaign, even as the catastrophe catapulted climate change — the Greens’ flagship issue — to the top of the political agenda.Hoping to reset her campaign, Ms. Baerbock, traveling in a bright green double-decker bus covered in solar panels, is taking her pitch to German voters in 45 cities and towns across the country.Ms. Baerbock in the campaign bus with her social media and logistics team.Laetitia Vancon for The New York TimesIt was no coincidence that her first stop was the industrial heartland of Germany, in the western state of North-Rhine Westphalia, which was badly hit by floods this summer and is run by Mr. Laschet, who has been criticized for mismanaging the disaster.“Climate change isn’t something that’s happening far away in other countries, climate change is with us here and now,” Ms. Baerbock told a crowd of a few hundred students, workers and young parents with their children in Bochum.“Rich people will always be able to buy their way out, but most people can’t,” she said. “That’s why climate change and social justice are two sides of the same coin for me.”Leaving the stage with her microphone, Ms. Baerbock then mingled with the audience and took questions on any range of topics — managing schools during the pandemic, cybersecurity — and apologized for her early missteps.“Yes, we’ve made mistakes, and I’m annoyed at myself,” she said. “But I know where I want to go.”Germany’s two traditional mainstream parties have seen their support shrink in recent years, while the Green Party has more than doubled its own.Laetitia Vancon for The New York TimesIf there is one thing that sets Ms. Baerbock apart from her rivals, it is this relative openness and youthful confidence combined with a bold vision. She is the next generation of a Green Party that has come a long way since its founding as a radical “anti-party party” four decades ago.In those early days, opposition, not governing, was the aim.For Ms. Baerbock, “governing is radical.”Her party’s evolution from a fringe protest movement to a serious contender to power in many ways reflects her own biography.Born in 1980, she is as old as her party. When she was a toddler, her parents took her to anti-NATO protests. By the time she joined the Greens as a student in 2005, the party had completed its first stint in government as the junior partner of the Social Democrats. By now, many voters have come to see the Greens as a party that has matured while remaining true to its principles. It is pro-environment, pro-Europe and unapologetically pro-immigration. Ms. Baerbock joined the Greens as a student in 2005.Laetitia Vancon for The New York TimesMs. Baerbock proposes spending 50 billion euros, about $59 billion, in green investments each year for a decade to bankroll Germany’s transformation to a carbon-neutral economy — and paying for it by scrapping the country’s strict balanced budget rule.She would raise taxes on top earners and put tariffs on imports that are not carbon neutral. She envisions solar panels on every rooftop, a world-class electric car industry, a higher minimum wage and climate subsidies for those with low incomes. She wants to team up with the United States to get tough on China and Russia.She is also committed to Germany’s growing diversity — the only candidate who has spoken of the country’s moral responsibility to take in some Afghan refugees, beyond those who helped Western troops. Ms. Baerbock’s ambitions to break taboos at home and abroad — and her rise as a serious challenger of the status quo — is catching voters’ attention as the election nears.It has also made her a target of online disinformation campaigns from the far right and others. A fake nude picture of her has circulated with the caption, “I needed the money.” Fake quotes have her saying she wants to ban all pets to minimize carbon emissions.Ms. Baerbock’s enemies in the mainstream conservative media have not held back either, exploiting every stumble she has made.Many of those who heard her speak in Bochum recently said they were impressed by her confident delivery (she spoke without notes) and willingness to engage with voters in front of rolling cameras.A supporter surprised Ms. Baerbock by offering her a heart-shaped balloon in Hildesheim, in northern Germany.Laetitia Vancon for The New York Times“She focused on issues and not emotions,” said Katharina Münch, a retired teacher. “She seems really solid.” Others were concerned about her young age and lack of experience.“What has she done to run for chancellor?” said Frank Neuer, 29, a sales clerk who had stopped by on his way to work. “I mean, it’s like me running for chancellor.”Political observers say the attacks against Ms. Baerbock have been disproportionate and revealing of a deeper phenomenon. Despite having a female chancellor for almost two decades, women still face tougher scrutiny and sometimes outright sexism in German politics.“My candidacy polarizes in a way that wasn’t imaginable for many women of my age,” Ms. Baerbock said, sitting in a bright wood-paneled cabin on the top level of her campaign bus between stops.“In some ways, what I’ve experienced is similar to what happened in the U.S. when Hillary Clinton ran,” she added. “I stand for renewal, the others stand for the status quo, and of course, those who have an interest in the status quo see my candidacy as a declaration of war.”Bochum was among the stops on Ms. Baerbock’s campaign swing.Laetitia Vancon for The New York TimesWhen Ms. Merkel first ran for office in 2005, at 51, she was routinely described as Chancellor Helmut Kohl’s “girl” and received not just endless commentary on her haircut, but relentless questions about her competence and readiness for office. Even allies in her own party dismissed her as an interim leader at the time.Ms. Baerbock’s answer to such challenges is not to hide her youth or motherhood, but rather to lean into them.“It’s up to me as a mother, up to us as a society, up to us adults to be prepared for the questions of our children: Did you act?” she said. “Did we do everything to secure the climate and with it the freedom of our children?”Ms. Baerbock talking with a group of young women at the end of a campaign day in Duisburg.Laetitia Vancon for The New York TimesChristopher F. Schuetze More

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      Automakers Drop Efforts to Derail California Climate Rules

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      #masthead-section-label, #masthead-bar-one { display: none }Climate and EnvironmentExecutive OrdersWild WeatherBlack FarmersReversing Trump’s RollbacksAdvertisementContinue reading the main storySupported byContinue reading the main storyAutomakers Drop Efforts to Derail California Climate RulesMomentum is shifting toward a clean-car future as more automakers end their legal efforts to block California’s tough fuel economy standards.New cars on a dock at the Port of Los Angeles in April.Credit…Lucy Nicholson/ReutersFeb. 2, 2021, 4:52 p.m. ETWASHINGTON — Toyota, Fiat Chrysler and several other major automakers said Tuesday they would no longer try to block California from setting its own strict fuel-economy standards, signaling that the auto industry is ready to work with President Biden on his largest effort to reduce greenhouse gas emissions.The decision by the companies was widely expected, coming after General Motors dropped its support for the Trump-era effort just weeks after the presidential election. But the shift may help the Biden administration move quickly to reinstate national fuel-efficiency standards that would control planet-warming auto pollution, this time with support from industry giants that fought such regulations for years.“After four years of putting us in reverse, it is time to restart and build a sustainable future, grow domestic manufacturing, and deliver clean cars for America,” said Gina McCarthy, the senior White House climate change adviser. “We need to move forward — and fast.”The auto giants’ announcements come on top of a 2020 commitment by five other companies — Ford, Honda, BMW, Volkswagen and Volvo — that they would abide by California’s tough standards. And last week, G.M. pledged to sell only zero-emissions vehicles by 2035, a move that would put the company in line with another recent California policy banning the sales of internal-combustion vehicles by that year.Tuesday’s move also marked a stark reversal for California’s influence on Washington policymaking. After President Donald J. Trump rolled back Obama-era auto pollution rules that had been modeled after California’s state-level rules, he then blocked the state’s authority from setting such rules. Now Mr. Biden is expected to use California as a model for swiftly reinstating national rules.“We’re going to continue to play an important role in pushing the federal government and the auto companies,” vowed Jared Blumenfeld, the California secretary of environmental protection, who added that Mr. Biden had recently spoken with Gavin Newsom, California’s governor, about using the state’s auto emissions polices as a guide to federal policies.California Gov. Gavin Newsom, left, and Jared Blumenfeld, the state’s secretary of environmental protection, in 2019.Credit…Justin Sullivan/Getty ImagesIn a statement, the auto companies, represented by the industry group Coalition for Sustainable Automotive Regulation, said the lawsuit started by the Trump administration to block California’s fuel economy rules no longer had their support: “We are aligned with the Biden Administration’s goals to achieve year-over-year improvements in fuel economy standards that provide meaningful climate and national energy security benefits.”They added, “In a gesture of good faith and to find a constructive path forward, the C.S.A.R. has decided to withdraw from this lawsuit in order to unify the auto industry behind a single national program with ambitious, achievable standards.”Mr. Trump had made the rollback of Obama-era fuel economy standards the centerpiece of his deregulatory agenda. The Obama-era standards, which were modeled on California’s, would have required auto companies to make and sell vehicles that reached an average fuel economy of about 54.5 miles per gallon by 2025. The standards, which would have eliminated about six billion tons of planet-warming carbon dioxide pollution over the lifetime of the vehicles, stood as the single largest federal policy ever enacted to reduce climate change.The Trump administration last year rolled back that standard to about 40 miles per gallon by 2026 — a move which would have effectively allowed most of that carbon dioxide back into the atmosphere. California, however, reached a separate deal with the five automakers, in which they agreed to reach a standard of 51 miles per gallon by 2026. The Trump administration, backed by G.M. and other automakers, blocked California’s legal authority to set those standards.Now that G.M., Toyota and Fiat Chrysler have dropped out of that lawsuit, Biden administration officials have one less speed bump ahead of a new federal standard. The White House is also expected to explore ways to adopt the California policy requiring all new vehicles sold after 2035 to release no emissions.Pete Buttigieg, U.S. secretary of transportation nominee, leaving a Senate confirmation hearing last month.Credit…Pool photo by Stefani ReynoldsThe Biden administration is already moving swiftly to craft that new standard, which will be jointly released by the Environmental Protection Agency and the Department of Transportation. On Wednesday, the Senate confirmed the new Transportation Secretary, Pete Buttigieg. In his confirmation hearing, Mr. Buttigieg, the former mayor of South Bend, Ind., and a 2020 presidential contender, vowed to make tackling climate change a guiding principal of his tenure — a first for a transportation secretary.And he will be aided by a new top official who helped broker the California deal with the five automakers: Steven Cliff, formerly the deputy executive officer with the California Air Resources Board, has been appointed by Mr. Biden to lead the Transportation Department’s National Highway and Traffic Safety Administration, the agency that will oversee the rewrite of the new auto fuel economy standards.“He’s probably the most knowledgeable person anywhere on the planet about how these auto companies align on this and how we push on this,” Mr. Blumenfeld said.Ms. McCarthy is expected to meet this week with the heads of several major auto companies and representatives from the United Auto Workers and other unions as she begins to sketch out the details of the new rules.Though the California deal sets a standard of 51 miles per gallon for model year 2026, the coming Biden rule will likely take a year or more to complete. So its first targets will be later, 2028 or 2029. California and environmental groups are likely to push for standards that are even more aggressive to help meet the goal of ending sales of gasoline- and diesel-powered cars by 2035.Crafting such rules could be a lengthy and complex process, but several people close to the administration say they expect that the E.P.A. and Transportation Department to publish a “notice of proposed rule making” — essentially, a document that launches the one-to-two-year legal process of drafting and implementing such rules — by March.AdvertisementContinue reading the main story More

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      California, Vaccines, Georgia: Your Monday Evening Briefing

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      Transition Updates

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      return[“www.nytimes.com”,”www.stg.nytimes.com”].includes(window.location.hostname)||(a=”STYLN_elections_notifications”),a||”0_control”}function reportData(){if(window.dataLayer){var a;try{a=dataLayer.find(function(a){return!!a.user}).user}catch(a){}var b={abtest:{test:”styln-elections-notifications”,variant:getVariant()},module:{name:”styln-elections-notifications”,label:getVariant(),region:”TOP_BANNER”},user:a};window.dataLayer.push(Object.assign({},b,{event:”ab-alloc”})),window.dataLayer.push(Object.assign({},b,{event:”ab-expose”})),window.dataLayer.push(Object.assign({},b,{event:”impression”}))}}function insertNotification(a,b){// Bail here if the user is in control
      if(reportData(),”0_control”!==getVariant()){// Remove menu bar items or previous notification
      var c=document.querySelector(“.nytslm_innerContainer”);if(c&&1 30 * 60 * 1000) return restoreMenuIfNecessary();
      // Do not update DOM if the content won’t change
      if(currentNotificationContents!==a.text&&window.localStorage.getItem(“stylnelecs”)!==a.timestamp)// Do not show if user has interacted with this link
      // if (Cookie.get(‘stylnelecs’) === data.timestamp) return;
      {expireLocalStorage(“stylnelecs”),currentNotificationContents=a.text;// Construct URL for tracking
      var b=a.link.split(“#”),c=b[0]+”?action=click&pgtype=Article&state=default&module=styln-elections-notifications&variant=1_election_notifications&region=TOP_BANNER&context=Menu#”+b[1],d=formatNotification(c,a.text,a.kicker,a.image);insertNotification(d,function(){var b=document.querySelector(“.nytslm_notification_link”);return b?void(b.onclick=function(){window.localStorage.setItem(“stylnelecs”,a.timestamp)}):null})}})}(function(){navigator.userAgent.includes(“nytios”)||navigator.userAgent.includes(“nyt_android”)||window.stylnelecsHasLoaded||(// setInterval(getUpdate, 5000);
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