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Euractiv
5 days ago
- Business
- Euractiv
Europeans ponying up to fund US weapons shipments to Ukraine
Germany is the latest European country to pledge money for a NATO-led scheme to keep US weapons flowing to Ukraine, as Europe struggles to deliver enough military hardware and munitions themselves. The European cash flowing to Washington – including Germany's pledge of €500 million on Wednesday to fund a weapons package for Ukraine – is solidifying US President Donald Trump's vision of making Europe pay for American aid to Kyiv, and underscoring how essential American military arsenals and weapons factories remain. 'There is no way around the US industry, as European stocks and the capacity of the defence industry are exhausted in the short term,' one NATO official told Euractiv, adding that 'the need for certain military supplies in Ukraine is immense'. Trump proposed the deal last month, after again complaining that the US has already spent far too much on supporting Ukraine. The Netherlands was the first to put money in, funding a US weapons package worth $500 million. Denmark, Sweden and Norway jointly put in another €500 million shortly afterwards. Under the scheme, known as the Prioritised Ukraine Requirements List (PURL), Kyiv details its greatest weaponry needs to NATO officials. That shopping list is checked with Washington for availability, and then bundled into delivery packages worth $500 for other NATO governments – in Canada and Europe – to finance. That means the alliance is now functioning as 'a kind of transaction account' for military aid, the NATO official said. A new way of support Data gathered by Germany's Kiel Institute for the World Economy (IfW) already shows an increase in support coming from procurement even before the PURL arrangement got underway, at least partly because European arsenals have now been depleted by previous transfers to Ukraine. 'Unlike earlier in the war, when much of the aid came from donors' existing military stockpiles, Europe is now relying far more on new orders from the defence industry,' Taro Nishikawa, who leads IfW's Ukraine Support Tracker, told Euractiv. With the European defence industry still in its expansion phase, 'the PURL mechanism could potentially help address this challenge,' he said. A new wave of packages is expected to follow in September, according to the NATO official. Finland, the United Kingdom and Canada are among the countries that have shown interest in putting money into the effort. There's no timeline for how long the PURL effort might continue, according to the NATO official: "Its continuation depends on further developments in Ukraine, the political will of all parties involved and the availability of military capabilities on the US side.' (bts)
Reuters
12-06-2025
- Business
- Reuters
German economy to grow after two straight years of contraction, IfW says
BERLIN, June 12 (Reuters) - The German economy is expected to grow this year following two consecutive years of contraction, the Kiel Institute for the World Economy (IfW) said on Thursday. The economic institute raised its forecast to 0.3% growth from the stagnation it had previously envisaged. The revision is due to a better-than-expected first quarter, when the economy grew by 0.4%. "The German economy is seeing some light at the end of the tunnel," the economists said in their new forecasts. They are also more optimistic about next year, raising the forecast for Europe's largest economy to 1.6% growth from the previous forecast of 1.5% in 2026.
Reuters
27-03-2025
- Automotive
- Reuters
German auto shares seen lower after Trump announces 25% tariffs
BERLIN, March 27 (Reuters) - Shares in some German automakers and suppliers were indicated lower in pre-market trade on Thursday after U.S. President Donald announced 25% tariffs on imported vehicles, a move that threatens to hurt Germany's already struggling auto industry. Shares in BMW ( opens new tab were seen 2.3% lower and Daimler Truck ( opens new tab 1.9% lower, according to Lang & Schwarz pre-market data. Shares in parts supplier Continental ( opens new tab were seen 3.9% lower Germany's VDA car lobby slammed the new levies as a "fatal signal" for free, rules-based trade, warning that it would harm companies as well as global supply chains. "The German automotive industry is calling for immediate negotiations between the US and the EU on a bilateral agreement," VDA president Hildegard Mueller said in a statement. Still, research by the IfW economic institute found that Germany would not be the hardest-hit, the FAZ newspaper reported. The institute estimates that German gross domestic product will be 0.18% weaker in the first year after the introduction of the tariffs in real terms, compared with -1.81% in Mexico and -0.6% in Canada. "Overall, the export losses are limited, as cars are often produced close to the sales market," IfW trade economist Julian Hinz said in comments carried by FAZ.
Zawya
14-03-2025
- Business
- Zawya
Germany's fiscal expansion would boost GDP from 2026, DIW says
Germany's planned 500-billion-euro infrastructure fund could raise economic output by an average of more than two percentage points per year over the next 10 years, Germany's DIW economic institute said on Friday. German chancellor-in-waiting Friedrich Merz was set to make a last-ditch attempt on Friday to convince the Greens of his plans for a massive increase in state borrowing to bolster defence and infrastructure. DIW, one of Germany's main economic forecasters, cut its forecasts for Europe's largest economy on Friday for this year and next due to political uncertainty and global trade tensions. Next year, gross domestic product will likely increase by 1.1%, down from the DIW's December forecast of 1.2%, the institute said. This forecast does not take into account defence and infrastructure expenditures. If a defence and infrastructure spending ramp-up is included, growth of 2.1% is expected in 2026, DIW said. The institute expects the economy to stagnate this year, revising its previous forecast for 0.2% growth. This is because the fiscal expansion would not have any impact in the current year. One reason for the downward revision is private consumption, which is developing more weakly than expected in Germany despite rising real wages, DIW said. Many people in Germany are holding back on major purchases due to the tense global political situation and job security concerns, it added. The IfW institute revised up its 2026 estimate for Germany, predicting 1.5% growth off the back of the expected boom in public spending. Like the DIW, it also expects a stagnation this year. In 2024, Germany became the only G7 country to post a contraction for two consecutive years. Strengthening public investment and reducing economic uncertainty should be a top priority for the new German government, said DIW president Marcel Fratzscher on Friday in the presentation of the new forecasts. "Although special funds are not the ideal solution, they could offer a pragmatic approach to compensate for Germany's investment weakness and pull the German economy out of the crisis," Fratzscher said. Merz has justified the need to push the constitutional amendments through the outgoing parliament with the recent shift in policy in the United States under President Donald Trump, warning that a hostile Russia and an unreliable U.S. could leave the continent exposed. "The loss of the U.S. as a reliable political partner poses major challenges for the future German government and exacerbates the already difficult situation, especially for export-oriented companies," said Dany-Knedlik.
Reuters
11-02-2025
- Business
- Reuters
Germany's trade surplus with US reaches new record
BERLIN, Feb 11 (Reuters) - Germany's trade surplus with the United States reached a record level, data from the statistics office showed, as countries wait to learn how U.S. President Donald Trump will impose tariffs on imported goods. Germany's trade surplus with the U.S. expanded to 70 billion euros ($72 billion) in 2024, well above the previous record of 63.3 billion euros reported for the full year 2023. "It would be hard to imagine worse timing," said Holger Goerg, from the Kiel Institute for the World Economy (IfW). Trump substantially raised tariffs on steel and aluminum imports on Monday to a flat 25% "without exceptions or exemptions". German Chancellor Olaf Scholz said in response the European Union was still awaiting formal notice of any new tariffs but that any such move would be met with retaliatory measures. The increase in trade surpluses could reverse, Goerg said, if Trump imposed new tariffs on German imports, a measure the U.S. president says would boost U.S. manufacturing. Germany, Europe's biggest economy, was last year the only G7 country posting a contraction for two consecutive years and a trade conflict with the U.S., its main trading partner, would deliver a big hit to output. German exports to the U.S., led by cars and pharmaceutical goods, increased by 2.2% year-on-year to a record 161.3 billion euros in 2024, consolidating the U.S. position as the top buyer of goods "Made in Germany". Imports from the U.S. fell by 3.4% to 91.4 billion euros last year. Goerg said the U.S. trade deficit reflected a lack of international competitiveness of U.S. goods which will not be solved by tariffs. "On the contrary, I would assume that this would have a negative impact on the U.S. export performance," Goerg said. The situation is completely different in trade in services, where the U.S. has a strong export surplus, including to the EU and Germany, he noted. "Mr. Trump should include that in his calculations," Goerg said.
