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Straits Times
19 hours ago
- Politics
- Straits Times
Germany against suspending EU deal with Israel, official says
FILE PHOTO: European Union, Israeli and German flags flutter near the Brandenburg Gate in Berlin, Germany, September 5, 2022. REUTERS/Fabrizio Bensch/File Photo Germany against suspending EU deal with Israel, official says BERLIN - Germany does not support calls to suspend a pact governing Israel's relations with the European Union, a government official said on Monday, highlighting divisions within the bloc. There has been deepening concern in European capitals in recent months about Israel's military operations in Gaza and the humanitarian situation in the enclave. Spain's foreign minister said earlier on Monday he would ask the EU council to approve an immediate suspension of the EU-Israel Association agreement in protest over what he called human rights violations in Gaza. The bloc's diplomatic service also said on Friday that Israel may have breached its human rights obligations in Gaza and the West Bank under the deal. Israel rejected that report as a "moral and methodological failure". "Our position is very clear - we do not support either a suspension or a partial suspension," the official said at a German government briefing. As such an upcoming EU summit will involve intense discussions about Iran and Israel but is unlikely to result in any decisions, the official said. Germany has long followed a policy of special responsibility for Israel, known as the Staatsraeson, due to the legacy of the Nazi Holocaust, and been much slower during the current conflict to criticize Israel for its conduct than other EU states. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
19-05-2025
- Business
- Straits Times
Germany pushes ahead with budget preparations while seeking savings, document shows
FILE PHOTO: Flags flutter outside the Reichstag building, the seat of the German parliament, the Bundestag, in Berlin, Germany May 6, 2025. REUTERS/Fabrizio Bensch/File Photo BERLIN - Germany's new finance minister has begun intensive preparations for the 2025 and 2026 budgets, with savings sought despite the government giving itself fiscal room by creating a new infrastructure fund, a document seen by Reuters on Monday showed. After former chancellor Olaf Scholz's coalition collapsed in November, the last government ran out of time to pass the 2025 budget. Germany has instead been operating on a provisional budget since the start of the year. In the planned official budget, however, new finance minister Lars Klingbeil will be looking for savings. "As finance minister, I will push for every ministry to come up with savings," Klingbeil told Redaktionsnetzwerk Deutschland on Sunday. Germany in March approved plans for a massive spending surge, including a 500 billion euro ($570 billion) fund for infrastructure and exemptions from debt rules for defence spending. Even with this, "leaning back ... is not an option," Klingbeil said. Germany is facing two important challenges according to the document seen by Reuters. The first one is security. "Our security is more threatened today than at any time since the end of the Cold War. The greatest threat comes from Russia," finance ministry state secretary Steffen Meyer said in the document. The second challenge is ongoing economic weakness, with Europe's largest economy failing to grow for two consecutive years and the government forecasting stagnation this year. The document sets the three priorities of the new finance ministry: investments for modernizing Germany, structural reforms to enhance competitiveness and ease the burden on the public and on business, and budget consolidation. "Now is the moment to quickly raise the potential of the German economy and go back to a higher and sustainable growth path," Meyer said. According to the document, the draft budget for 2025 will be approved by cabinet on June 25, the first discussion in parliament will take place in July and the budget committee will finalise the details in September, when it should also be approved by lawmakers. In parallel, the first draft of the 2026 budget should be approved on July 30. It is to be discussed in parliament in September, then approved in the lower house of parliament in November and the upper house in December, following the usual schedule. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
19-05-2025
- Business
- Straits Times
Germany pushes ahead with budget preparations, savings encouraged, document shows
FILE PHOTO: Flags flutter outside the Reichstag building, the seat of the German parliament, the Bundestag, in Berlin, Germany May 6, 2025. REUTERS/Fabrizio Bensch/File Photo BERLIN - Germany's new finance minister has started intensive preparations for the 2025 and 2026 budgets, with savings necessary despite the fiscal room created by an infrastructure fund, according to a document seen by Reuters on Monday. According to the document, the draft budget for 2025 will be approved by cabinet on June 25, the first discussion in parliament will take place in July and the budget committee will finalise the details in September, when it should also be approved by lawmakers. In parallel, the first draft of the 2026 budget should be approved on July 30. It is to be discussed in parliament in September, then approved in the lower house of parliament in November and the upper house in December, following the usual schedule. "As finance minister, I will push for every ministry to come up with savings," Lars Klingbeil told Redaktionsnetzwerk Deutschland on Sunday. After former chancellor Olaf Scholz's coalition collapsed in November, the government ran out of time to pass the 2025 budget. Germany has had a provisional budget since the start of the year. Germany approved in March plans for a massive spending surge, including a 500-billion euro ($568.10 billion) fund for infrastructure and exemptions from debt rules for defence spending. Even with this, "leaning back ... is not an option," Klingbeil said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
The Star
19-05-2025
- Business
- The Star
Germany pushes ahead with budget preparations, savings encouraged, document shows
FILE PHOTO: Flags flutter outside the Reichstag building, the seat of the German parliament, the Bundestag, in Berlin, Germany May 6, 2025. REUTERS/Fabrizio Bensch/File Photo BERLIN (Reuters) - Germany's new finance minister has started intensive preparations for the 2025 and 2026 budgets, with savings necessary despite the fiscal room created by an infrastructure fund, according to a document seen by Reuters on Monday. According to the document, the draft budget for 2025 will be approved by cabinet on June 25, the first discussion in parliament will take place in July and the budget committee will finalise the details in September, when it should also be approved by lawmakers. In parallel, the first draft of the 2026 budget should be approved on July 30. It is to be discussed in parliament in September, then approved in the lower house of parliament in November and the upper house in December, following the usual schedule. "As finance minister, I will push for every ministry to come up with savings," Lars Klingbeil told Redaktionsnetzwerk Deutschland on Sunday. After former chancellor Olaf Scholz's coalition collapsed in November, the government ran out of time to pass the 2025 budget. Germany has had a provisional budget since the start of the year. Germany approved in March plans for a massive spending surge, including a 500-billion euro ($568.10 billion) fund for infrastructure and exemptions from debt rules for defence spending. Even with this, "leaning back ... is not an option," Klingbeil said. ($1 = 0.8874 euros) (Reporting by Christian Kraemer and Maria Martinez, Editing by Rachel More)
Straits Times
06-05-2025
- Business
- Straits Times
Merz fails to be elected chancellor by German parliament, shares fall
Friedrich Merz of the Christian Democratic Union (CDU) walks after the announcement of the result as he fails to be elected chancellor by German parliament, during the session of the German lower house of parliament Bundestag, to elect the new German chancellor, in Berlin, Germany May 6, 2025. REUTERS/Fabrizio Bensch Friedrich Merz of the Christian Democratic Union (CDU) reacts after the announcement of the result as he fails to be elected chancellor by German parliament, during the session of the German lower house of parliament Bundestag, to elect the new German chancellor, in Berlin, Germany May 6, 2025. REUTERS/Fabrizio Bensch LONDON - German conservative leader Friedrich Merz failed to garner the parliamentary majority needed to become chancellor on Tuesday in an unexpected setback for his new coalition with the centre-left Social Democrats. German blue chip shares extended their fall on the news and was last down nearly 2%, while the broader European share index was down around 0.85%. Domestic focused midcaps fell nearly 3%. The euro gave back early gains on the dollar to last trade flat at $1.1230, and was down 0.34% on the safe-haven Japanese yen at 162.1. German bonds saw muted reactions with the 10-year yield last up 2 bps on the day at 2.54%. COMMENTS: DAVID ZAHN, HEAD OF EUROPEAN FIXED INCOME, FRANKLIN TEMPLETON, LONDON: "I'm not overly concerned. There are different political parties and people playing for position (in terms) of what they can demand in order to give support. He (Merz) has this coalition, it's an okay coalition, it's not incredibly strong, and so therefore he will be susceptible to things like this. I expect that they'll have another vote or two, and then it will be fine." "If we went to a third or fourth vote and he still couldn't get it, then we have different issue. I don't think this changes overall economic policy. He has a very aggressive economic policy, which is going to make to try to make the economy grow faster, make Germany more central on the global stage, which for German growth is fantastic." RICHARD MCGUIRE, HEAD OF RATES STRATEGY, RABOBANK, LONDON: "The Rubicon has been crossed. Germany has the ability to spend beyond the previous confines or limitations of the constitutional debt break." "Who's leading the country determines its willingness to do that... but judging by the market's reaction, it seems that perhaps Merz's having failed the first vote is seen as a temporary stumbling block rather than heralding a possible change in political direction." CARSTEN BRZESKI, GLOBAL HEAD OF MACRO RESEARCH, ING, FRANKFURT: "Well, it (stock markets) reacted but with a delay, showing investors exactly what it is: namely that the government still needs to convince its own supporters that it will be able to deliver. The failed vote is clearly a sign that not everyone in the CDU (Christian Democratic Union) agrees with the fiscal U-turn." HOLGER SCHMIEDING, CHIEF ECONOMIST, BERENBERG, LONDON: "This is a significant negative. He (Merz) is still likely to get elected but this shows that the coalition is not united, which could weaken his ability to pursue policies." STEFAN KOOPMAN, SENIOR MARKET ECONOMIST RABOBANK, AMSTERDAM: "The market still sees Merz eventually becoming Chancellor. While (this is) a bit of an embarrassment, he fell only six votes short this time, and under Germany's constitutional playbook, a Chancellor candidate who fails to secure an absolute majority in three rounds can still squeak through on a relative majority in the fourth." "But it's not a good sign as he already suffers from low approval ratings among voters and the AfD looks to be strengthening." REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
