Latest news with #Handelsblatt
Gulf Insider
2 days ago
- Business
- Gulf Insider
The European Disease: Germany Enters The Debt Spiral
Germany is on a path to losing its reputation as a fiscally responsible state. Through unchecked spending, the federal government is steering the country into stormy waters. On Thursday, Handelsblatt reported a new budget gap. By 2029, previously unfunded additional debts are expected to grow from €144 billion to €150 billion, according to several government sources. These are not part of the planned federal debt but come on top of it. Most recently, the coalition agreed to bring forward a planned pension supplement for mothers to 2027, adding another €4.5 billion in spending. It must be said clearly: Under Chancellor Friedrich Merz, Germany has abandoned its last efforts at fiscal seriousness and conservative budgeting. The costs of a shaky coalition's political consensus, designed to avoid conflict, are being offloaded onto taxpayers. These numbers are already alarming—but we are still in the calm before the storm. In 2025, the net new debt ratio is expected to reach 3.2% of GDP. This includes roughly €82 billion in new federal debt, €15 billion in additional borrowing from states and municipalities, and about €37 billion in federal 'special funds'—off-budget shadow debt. This forecast will collapse the moment the German economy sinks deeper into recession. Rising unemployment and falling tax revenues will put further strain on the federal budget and social welfare funds. While politicians still feel safe with public debt at 63% of GDP, once we include the €1 trillion debt program of the Merz government, debt levels could surpass 90% of GDP by the end of the decade. Germany is now practicing a kind of fiscal policy most citizens are unfamiliar with. Mediterranean habits have arrived—but not in the form of sunny weather, rather in the mismanagement of public finances. In a display of unprecedented hubris, German politics has kept its welfare state wide open for migration-driven poverty over the past decade—causing not only fiscal but also cultural and economic disarray. Added to this is the aging population and a self-inflicted economic crisis. All signs in the welfare system now point toward disaster. By 2025, a combined deficit of over €55 billion is expected — foremost in statutory health insurance, which will run a record shortfall of nearly €47 billion. Long-term care insurance adds a further €1.6 billion in losses, and the pension fund faces a shortfall of roughly €7 billion. Once touted as a system 'fit for future generations,' Germany's welfare model has become a bottomless pit. Federal bailouts, emergency loans, and ever-higher contributions now characterize a social state entering the early phase of collapse. Vae victis — woe to the vanquished — and blessed are those who foresaw this descent and had the means to escape the welfare-state trap. The bill is now being paid by the quietly suffering workforce — the heroes who absorb the fallout from the reckless debt policies through their labor and lost time. Social policy today is primarily a repair shop for damage caused by political interventionism. In trying to fuse artificial social glue into society, the state's share of GDP has risen to 50%. Despite massive tax hikes—think CO2 levies, road tolls, property taxes, and cold progression—the gap between government spending and actual tax revenue keeps widening. Since pre-lockdown times, public spending has jumped by around one-third, while real tax revenues have only increased by 14%. Even an economic illiterate could deduce that this mismatch requires structural correction—urgently. But there's no sign of retreat in Berlin. The political competition among statist parties—including the CDU—produces only one outcome: larger social budgets, endless benefit promises, and deeper interference in the economy. With dogmatic loyalty to climate policy and open-border ideology, the German state stumbles blindly toward a crossroads. Budgetary crises can't be timed—they arrive when governments lose the ability to borrow on the capital markets. As Hemingway once said about bankruptcy: 'First slowly, then suddenly.' Once that moment comes—when bond markets say no—a society faces two paths: total statism or radical economic liberalism. In the former, both energy and capital markets fall under state control, as economic management turns authoritarian. This is the road Germany is currently on. The alternative is the one Argentina has chosen under President Javier Milei—symbolized by his now-famous chainsaw. That route returns to a civilization based on limited government, confined to protecting internal and external security. Whether we like it or not, we are all part of a vast social experiment. The question is: Can Europe shed its degenerative socialism—the ideology that has inflicted so much harm on the continent and the world—or will we fall back into infantile patterns, refusing reform out of fear and sentimentality? France's budget debate and political paralysis offer a preview of our own future. The French state quota has climbed to 57%. Its open-border policies have failed. Its bloated welfare state has made the country ungovernable. All this culminates in a permanent state of government crisis—translating into a collapse in public trust. Economic volatility, long suppressed by the welfare state, is now erupting as social unrest in the streets.
The Star
2 days ago
- Business
- The Star
German army prepares to develop deep-strike drones, Handelsblatt reports
BERLIN (Reuters) -The German armed forces are preparing to develop long-range combat drones capable of striking targets deep in enemy territory, the Handelsblatt newspaper reported on Monday. Three consortia are working on concrete concepts after the Luftwaffe airforce sent a request for deep-strike drones to leading defence companies and startups, the report said. According to the report, Airbus Defence is contributing to the project alongside U.S. startup Kratos, while Germany's Rheinmetall has teamed up with drone specialist Anduril. Munich-based startup Helsing is also involved, the report said. The German defence ministry confirmed preparations for such a project to Handelsblatt, saying that initial talks had taken place but that no formal tender had been issued. The ministry and the companies mentioned did not respond to emailed requests for comment from Reuters. (Writing by Friederike Heine, Editing by Rachel More)
Straits Times
2 days ago
- Business
- Straits Times
German army prepares to develop deep-strike drones, Handelsblatt reports
Find out what's new on ST website and app. BERLIN - The German armed forces are preparing to develop long-range combat drones capable of striking targets deep in enemy territory, the Handelsblatt newspaper reported on Monday. Three consortia are working on concrete concepts after the Luftwaffe airforce sent a request for deep-strike drones to leading defence companies and startups, the report said. According to the report, Airbus Defence is contributing to the project alongside U.S. startup Kratos, while Germany's Rheinmetall has teamed up with drone specialist Anduril. Munich-based startup Helsing is also involved, the report said. The German defence ministry confirmed preparations for such a project to Handelsblatt, saying that initial talks had taken place but that no formal tender had been issued. The ministry and the companies mentioned did not respond to emailed requests for comment from Reuters. REUTERS
Reuters
22-07-2025
- Automotive
- Reuters
German car parts maker Bosch to cut up to 1,100 jobs, Bild and HB report
July 22 (Reuters) - German car parts maker Bosch will cut up to 1,100 jobs in the coming years and restructure its Reutlingen plant, the Bild and Handelsblatt newspapers reported on Tuesday. As the auto sector weakens, Bosch in future will focus the plant mainly on manufacturing semiconductors, Handelsblatt said. "The necessary job cuts are not easy for us, but are urgently needed to secure the future of the location," Handelsblatt cited Bosch's executive vice president of semiconductor operations Dirk Kress as saying.
Euronews
21-07-2025
- Business
- Euronews
Germany's top firms present investment push to revive economy
Germany's Chancellor Friedrich Merz is meeting with executives from 61 companies on Monday who have collectively pledged €631 billion of investments by 2028 to restore confidence in the country's economy. The firms — including heavy hitters such as Deutsche Bank and Siemens — will present Merz and Finance Minister Lars Klingbeil with their "Made in Germany" initiatives. The €631 billion includes capital investments, expenditure on research and development as well as commitments from international investments, according to the companies. Germany's economy, once considered a powerhouse within Europe, has been in recession for two years in a row and is projected to face a tough 2025 with growth projections among the weakest in the developed world. Siemens CEO Roland Busch clarified to Handelsblatt newspaper that the money announced by the companies was "fresh capital, but also capital that has already been committed". He added: "We need the courage for structural changes in politics, and it is imperative that big steps follow." Firms at the meeting on Monday are expected to lobby the government for faster approvals for infrastructure projects and measures to combat Germany's labour market shortage. The German government outlined that the meeting will focus on how to improve the investment climate and attractiveness of Germany as a business location. Merz has made revitalising Germany's economy one of his top priorities since entering office, emphasising during his summer press conference last week that his coalition was "taking the issue of cutting red tape really seriously". The meeting's announcement comes ahead of an expected spending surge by the German government, enabled by a recent reform to lift debt brake rules and the creation of a special fund for infrastructure investment. According to the president of the country's Ifo Institute for Economic Research, Clemens Fuest, the initiative to promote innovation and new businesses is a good sign, as was the creation of the infrastructure fund. Despite this, the German government has "adopted a series of measures that neither limit spending nor strengthen growth potential,' Fuest said. These include an "early-start pension plan" burdened by bureaucracy as well as the permanent reduction in value-added tax in the hospitality sector. 'Overall, the review of the German government's economic policy reveals pros and cons,' he said.
