Turkey

Beautiful German weapon sale of the week.

TurkeyExports

Because somebody has to admire them.

German arms exports to Turkey at highest level since 2005 – Last year, Turkey was the No. 1 importer of German weapons by far, with contracts amounting to €242.8 million. Despite a halt in some deliveries, it is on track to claim that title again in 2019.

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Spend More Like We Do

Says the EU. We don’t always know what we’re spending it on but we sure know how to do it.

Waste

As “German industrial orders fell more than expected in August on weaker domestic demand, adding to signs that a manufacturing slump is pushing Europe’s largest economy into recession,” the EU Commission advises Germany to spend more.

And EU knows all about spending other people’s money. It spent nearly four billion euros last year alone on things it can’t even account for – and most of the things it can account for are wasteful enough.

Konjunkturschocks“ – EU-Kommission drängt Deutschland zu mehr Ausgaben

Brewing Has Always Been Big In Germany

An Industrial Crisis Is Brewing in Germany – The country’s position as the “engine of Europe” is under genuine threat.

Germany’s industrial sector contributes more than one-fifth of GDP and is usually a huge asset. Right now this export engine is pulling the economy down. Signs of distress are everywhere. German manufacturing activity is at a decade low, according to IHS Markit’s purchasing manager’s index. The Ifo Institute estimates that more than 5% of manufacturing companies have cut working hours and about 12% expect to do so during the next three months. German machinery orders declined 9% in the first six months of the year, according to the VDMA association, which represents the country’s engineers. In chemicals and pharmaceuticals, domestic production fell 6.5% in the first half of the year, while domestic car output has fallen 12% this year. Auto exports have dropped 14%.

How Will Germany Pay?

Like, duh. The same way Germany pays for its Syrian migrants (three out of four live off the German welfare system). The captive taxpayer audience will pay. Always has, always will. Gladly, even.

Climate

How Will Germany Pay For Its €50bn Climate Plan? After months of intense negotiations between the governing parties in Berlin, Germany on Friday announced a €50 billion package of measures designed to help the country meet its 2030 emissions reduction goals.

Just so you know: Citizens in ridiculously expensive Switzerland already pay half of what the Germans pay for their energy now. And in France, the people take to the streets to protest rising energy costs (gilets jaunes). In Germany, the people take to the streets to protest the latest planned energy price increases not being high enough. German voters want this, in other words. It’s psycho here, folks. I keep telling myself “it’s only a movie, it’s only a movie…” but, sadly, I know it’s real life. As real life as German reality can get.

Strompreise steigen auf Rekordhöhe – auch Gas ist teurer.

No Contradiction Here

No more than anywhere else in Germany, I mean.

Contradiction

Everything contradicts itself here. Otherwise they wouldn’t call this place Germany. It’s einfach kompliziert (simply complicated) in this country. Germans don’t like or want electric cars, for example, but are obsessed with “saving the climate.”

With the contradiction between Germans’ climate anxiety and their love of huge SUVs, it’s no surprise that carmakers are struggling – Amid trade wars and plunging China sales, the number of cars rolling off Germany’s production lines has dropped by 12% this year and exports by 14%. European auto sales fell 3% in the first eight months of 2019. 1 With demand expected to remain weak for a couple of years, the German parts supplier Continental AG isn’t ruling out cuts to working hours and jobs.

Meanwhile… Riding a bike and car-sharing have become a genuine alternative in cities such as Berlin.

German Of The Day: Strafzins

That means “punitive interest rate” and refers to a rates below zero.

Strafzins

It’s an accurate word invention. The ECB has cut rates again and those who save are punished.

The German term “Strafzins”, or “punishment rate” is widely used in the country’s media to refer to interest rates below zero. And a day after the ECB cut rates for the first time since the spring of 2016, it is back in the news.

This is despite the fact there is an alternative German word for negative rates: negativzins (as Michael Steen, formerly of the FT and ECB global media chief, pointed out on Twitter).

Admittedly negativ also has . . . negative connotations. But the use of “straf”, or “punitive”, reflects a widespread perception across Germany that the ECB is penalising savers through its monetary policy.

“They want to pump us up with the credit drug.”

German Of The Day: Graf Draghila

That means Count Draghila.

Draghila

You know, as in Mario Draghi, the European Central Bank President?

Mass-selling German newspaper Bild on Friday accused European Central Bank President Mario Draghi of “sucking dry” the bank accounts of Germany’s savers, a day after the ECB cut interest rates deeper into negative territory.

Next to a photomontage of Draghi with fangs and dressed as a vampire, Bild’s headline read: “Count Draghila is sucking our accounts dry.”

Hoping to kick-start economic activity nearly a decade after the euro zone’s debt crisis, the ECB on Thursday cut interest rates deeper into negative territory and promised bond purchases with no end-date to push borrowing costs even lower.

“The horror for German savers goes on and on.”

An Inconvenient Truth

Germany hides the awkward truth about the euro.

Germany

Mr Kohl’s offence — the original sin, I would say, at the launch of the single currency — was to shy away from spelling out to German voters the inescapable meaning of the bargain. It still goes unsaid. In short, Germany is the biggest beneficiary of European integration. The EU supplies the democratic stability and economic certainty on which its prosperity has been built. No country has more to lose from a break-up.

These benefits, understandably, carry a price tag. As the EU’s most powerful economy, Germany bears a proportionate responsibility for the stability of the enterprise.

The mantra in Berlin continues to obfuscate. Germany, it says, will never accept a “transfer union”. In real life, of course, that horse has already bolted. The true choice is between the shadow transfer union represented by the mountain of national central bank liabilities that have built up at the ECB — so-called Target balances — and the creation of an economic union that admits the role of fiscal policy in managing economic demand.

The present catch-22 is that those with room to operate the fiscal levers — Germany and its northern neighbours — refuse to do so. Those pressing for a more expansionary stance — led by France — lack the budgetary headroom.

German Of The Day: Respektlosigkeit

That means disrespect. I don’t know what it means in Chinese, though. Failing to kowtow?

Wong

German foreign minister meeting with Joshua Wong ‘disrespectful’: China – Beijing has slammed democracy activist Joshua Wong’s meeting with Germany’s foreign minister as “disrespectful.” Wong has urged countries to stand by Hong Kong protesters against the long arm of China in the city.

Don’t worry, China. Angela Merkel is already cowering in a back office of the chancellery somewhere and has already made it clear that she won’t meet with him. She knows it would be Wong for her to do that.

“It is extremely wrong for German media and politicians to attempt to tap into the anti-China separatist wave.”

Angela Merkel Visits Hong Kong

Just kidding. Why would she do that?

Angela Merkel

German Chancellor Angela Merkel was welcomed with military honors in China on Friday with a business delegation in tow, hoping to secure an economic agreement.

China is Germany’s largest import market and, after the USA and France, and also its most important export market. In 2018 the two countries traded goods worth almost €200 billion ($221 billion).

Hong Kong protesters make plea to Chancellor Merkel.