Latest news with #Kirkegaard
Euronews
11 hours ago
- Politics
- Euronews
Only regime change will stop Iran making a nuclear weapon
Only regime change will completely neutralise the threat that Iran will develop nuclear weapons, however successful 'Operation Midnight Hammer' may have been, though it will cement support for Trump domestically, an expert on foreign policy has told Euronews. Euronews interviewed Jacob Kirkegaard, senior fellow at the Bruegel Institute, on the American air strikes on Iranian nuclear facilities. Kirkegaard said the attacks might eventually bring the world closer to closer to the end, as Iran has very limited tools to escalate the situation. According to the expert, Iran could choose to retaliate against either US bases by killing a number of US troops, or against the crude oil facilities, either by hitting the transportation through the Strait of Hormuz or some of the facilities in the Gulf Arab neighbours of Iran. But Kirkegaard said he thought both options "a low probability" because Iran today is "at a nearly historically weak military position". According to the expert, Iran's proxies, like Hamas, Hezbollah, or the Houthis, are weakened and the US could join a broader military campaign if Iran hits American targets. "This is the risk that the Iranians know that Trump has proven he's actually willing to pull the trigger. And they need to take it seriously. I don't think we're headed for more escalation, but on the other hand, does this bring a negotiated peace settlement or a return to an agreed international nuclear surveillance, sort of a JPCOA 2.0, any nearer? The risk is that I think the US and the European countries are now going to want a more intrusive JPCOA that Iran may or may not agree to. So I think the possibility of an accelerated peace move is there, but it is absolutely no certainty," he said. Iran might still be able to produce a nuclear bomb Kirkegaard said that for the moment, nobody knows how much damage the Iranian nuclear sites have suffered. If the Natanz and Isfahan sites are disabled, "this will make weapons-grade uranium enrichment more difficult", he said. "But that may not matter very much. Because the latest data from the International Atomic Energy Agency suggested that Iran had about 400 kilos of enriched uranium, up to 60 percent. That is, if further enriched, more than enough to produce a nuclear weapon, provided you have the technical know-how to do so, weaponize it. We don't know if Iran has that, but what it means is that destroying these facilities, even if they are successfully destroyed, isn't going to destroy the Iranian nuclear program." With a possibly large amount of highly enriched uranium hidden in the country, Iran may still be capable of building a nuclear bomb, he said. "Iran remains a nuclear threshold power, maybe not quite as near as it was 24 hours ago, but a country that could, if the regime decided to go all out to produce a bomb, might very well still be capable of doing so." He added that as a result, there is no military solution for the Iranian programme unless there is a regime change in the country. Trump will be remembered as a president who bombed Iran Kirkegaard said that despite Trump's aspiration to be a peacemaker in Ukraine, he will be remembered as the president who bombed Iran. "He's going to forever be the US President who bombed Iran. So whenever he's criticized by certainly the more hawkish elements of the US political firmament... he will always have, 'look, I bombed Iran'. What did Obama do? What did Biden do? What did even Bush do?" Trump will thereby deter criticism within the MAGA camp, according to the analyst, and he will certainly not cross the red line of sending troops to Iran. "The only thing where I think he will remain inhibited, but he's no more inhibited than any other president, is that you're not gonna have boots on the ground. You're not going to have a US actual invasion of Iran, which obviously would be a disaster for everyone involved. He knows that he's not gonna do that. But he has shown to the people who call him TACO and thought he was gonna chicken out, he showed them." Europe is irrelevant in the conflict Jacob Kirkegaard said Europe will be irrelevant in the conflict, but many leaders on the continent are happy that Israel, together with the US, is destroying Iran's nuclear and missile programme. "I think we have to say that the brief window of European diplomacy that we had on Friday with the meeting in Geneva went nowhere. The Iranians told the E3 foreign ministers that they are not interested in pursuing a deal that will freeze completely all nuclear enrichment. The reality is that Europe is irrelevant in this conflict. " The analyst added that Europe is also deeply split on the issue, and many leaders are quietly celebrating. "Friedrich Merz told German television that Israel is doing Europe's dirty work by striking Iran. There's no doubt that Europe secretly is very happy that Iran's ballistic missile and drone production capacity appears to be significantly degraded by Israel. " Striking Iran is directly weakening Russia, which is Europe's main strategic threat. "While nobody's going to praise Netanyahu publicly in Europe, the reality is that Friedrich Merz was right. But many European governments will obviously feel differently publicly or otherwise. And that alone will prevent Europe from taking a united stance that condemns Europe to irrelevance. It's really that simple."
CNN
21-02-2025
- Business
- CNN
Analysis: It's a make-or-break moment for Germany's economy. Trump's tariffs won't help
When German voters go to the polls Sunday, the country's moribund economy — and promises to fix it — will be front of mind. But Donald Trump's looming import tariffs will make that daunting task even harder for the new government. Failure would be costly. If the parties most likely to form a new governing coalition do not manage to kick-start economic growth, 'they know who's going to win the next elections, and this would be the far-right AfD,' said Carsten Brzeski, a senior economist at pan-European bank ING, echoing others' fears about the Alternative for Germany party. The German economy, the world's third-largest, has barely grown since the pandemic. It shrank both in 2023 and last year, posting the first back-to-back annual contractions since the early 2000s. And this year, it is set to grow by a paltry 0.3%, according to International Monetary Fund forecasts. It wasn't always like this. Between around 2005 and 2019, the export-oriented economy was thriving, propelled by cheap natural gas from Russia, an imports-hungry China and a relatively frictionless global trading environment. But the world has changed dramatically since then, with Trump's return to the White House presenting the latest challenge for Germany's all-important exporters. 'A world in which free trade is not the… dominant economic mantra is problematic for Germany,' said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, a Washington, DC-based think tank. Economic reform to boost growth is then not only what voters want — and polls have shown the economy is one of their two top concerns — but it is also vital for the prosperity of Germany's current and future generations, not least that of its swelling ranks of pensioners. 'An unreformed German economy is a stagnating, aging, sclerotic… German economy,' Kirkegaard told CNN. Exports have long been a major driver of Germany's growth. In 2023, the latest year for which data is available, exports of goods and services accounted for more than 43% of the country's gross economic product — the largest share among major economies, according to the World Bank. Motor vehicles and their parts, machinery and chemical products were Germany's main exports last year, per its statistics office. Relying on foreign demand was lucrative when China's massive economy was growing rapidly and its consumers preferred to buy cars from well-established foreign automakers — such as Volkswagen — rather than home-grown upstarts. But China's economy has slowed in recent years, while its carmakers, such as electric vehicle manufacturers BYD and Xpeng, have snatched market share from Western rivals, both at home and abroad, as a so-called EV 'revolution' has gained pace. To some extent, the German auto industry has been 'a victim of its own success,' Kirkegaard said. Brands like BMW, Mercedes and Audi, which found their fortune in the fossil fuel-burning internal combustion engine, 'were quite naturally reluctant to cannibalize their own success and throw a lot of money at developing electric vehicles.' Chinese EV makers, as well as Tesla (TSLA), 'have proven far better at… scaling up to producing literally millions of cars,' he added. Meanwhile, Germany's energy-guzzling industrial firms are paying more for their main fuel, natural gas, than before Moscow sent troops to Ukraine in 2022, prompting Europe to replace its gas imports from Russia with those from further afield. As a consequence, many German firms have slashed production and some have even shut down. 'We are in the midst of deindustrialization,' said Lars Kroemer, chief economist at Gesamtmetall, an association of employers in the metal and electrical engineering industry. That is worrying for an economy powered by 'highly specialized industrial companies producing highly specialized goods,' as a German government website put it. In addition to steep energy costs, high taxes and burdensome regulations have also clobbered the country's industry, Kroemer said. More broadly, strict limits on government borrowing in Germany — known as 'the debt brake' — have held back much-needed investment, including in infrastructure and online public services. 'We haven't yet digitized. Our bureaucratic burden is higher… than in other countries,' said Achim Wambach, president of the Leibniz Centre for European Economic Research, or ZEW. For months, Trump has been threatening to slap higher tariffs on goods imported into the US. Since taking office in January, he has proven he is prepared to walk the walk, announcing, for example, a 25% duty on all steel and aluminum imports, set to take effect in March. Then, last week, Trump ordered an investigation into whether the US should introduce reciprocal tariffs on imported goods, which would mean matching the tariffs levied by other countries on American products. And on Tuesday, he said he planned to impose a 25% duty on imported automobiles, semiconductor chips and pharmaceuticals as early as April. If foreign producers pass on most of the new tariffs to their American customers, their products could become less competitive than US-made equivalents. That would hurt German exporters in particular as the US is their single biggest market, representing 10% of all German exports, according to official figures. The impact would be felt most keenly by specific exporters, such as some beleaguered German automakers, Wambach said. 'Every additional push against (automakers) is bad news for the industry,' he told CNN. Across industries, about 1.2 million jobs in Germany depend, directly or indirectly, on exports to America, according to Prognos, a Swiss research firm. That figure represents 2.6% of all jobs in the country, per the latest government data. The extent to which the German economy overall will be affected by Trump's new tariffs will depend partly on their eventual levels. Germany's central bank has looked at a scenario in which Trump introduces universal tariffs of 10% and duties of 60% on imports from China, which he talked about on the campaign trail. It found that the German economy would 'suffer considerably,' with growth taking a sizable hit, Joachim Nagel, the central bank's president, said in a speech Monday. Even in the absence of direct tariffs on its goods, Germany could still feel the pain from tariffs imposed on other countries. Since taking office, Trump has also announced a 25% duty on all goods imports from Mexico and most products from Canada, and an additional 10% tariff on Chinese goods. But some German automakers, including Volkswagen, export cars to the US from their factories in Mexico. 'The whole (global) economy is like a network, so if you put a tariff or a hurdle… at one point, more or less the whole world economy will feel that,' said Michael Böhmer, chief economist at Prognos. He added that Mexico, Canada and China may redirect exports destined for the US to new markets to avoid Trump's tariffs, potentially putting those products in direct competition with German goods in those markets. Boosting Germany's growth in the next few years and beyond will require a lot more than finding ways to deal with Trump's tariffs. The country's entire business model may need an overhaul, as some have argued. Böhmer agrees. If, he said, over the next decade Germany fails to shift from 'quite old' industries, such as the production of cars, machinery and steel, to a 'future-oriented economy' focused on new technologies like artificial intelligence, then it 'will for sure not be third-biggest economy in the world anymore.' Maisie Linford and Sophie Tanno contributed reporting.
CNN
21-02-2025
- Business
- CNN
Analysis: It's a make-or-break moment for Germany's economy. Trump's tariffs won't help
When German voters go to the polls Sunday, the country's moribund economy — and promises to fix it — will be front of mind. But Donald Trump's looming import tariffs will make that daunting task even harder for the new government. Failure would be costly. If the parties most likely to form a new governing coalition do not manage to kick-start economic growth, 'they know who's going to win the next elections, and this would be the far-right AfD,' said Carsten Brzeski, a senior economist at pan-European bank ING, echoing others' fears about the Alternative for Germany party. The German economy, the world's third-largest, has barely grown since the pandemic. It shrank both in 2023 and last year, posting the first back-to-back annual contractions since the early 2000s. And this year, it is set to grow by a paltry 0.3%, according to International Monetary Fund forecasts. It wasn't always like this. Between around 2005 and 2019, the export-oriented economy was thriving, propelled by cheap natural gas from Russia, an imports-hungry China and a relatively frictionless global trading environment. But the world has changed dramatically since then, with Trump's return to the White House presenting the latest challenge for Germany's all-important exporters. 'A world in which free trade is not the… dominant economic mantra is problematic for Germany,' said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, a Washington, DC-based think tank. Economic reform to boost growth is then not only what voters want — and polls have shown the economy is one of their two top concerns — but it is also vital for the prosperity of Germany's current and future generations, not least that of its swelling ranks of pensioners. 'An unreformed German economy is a stagnating, aging, sclerotic… German economy,' Kirkegaard told CNN. Exports have long been a major driver of Germany's growth. In 2023, the latest year for which data is available, exports of goods and services accounted for more than 43% of the country's gross economic product — the largest share among major economies, according to the World Bank. Motor vehicles and their parts, machinery and chemical products were Germany's main exports last year, per its statistics office. Relying on foreign demand was lucrative when China's massive economy was growing rapidly and its consumers preferred to buy cars from well-established foreign automakers — such as Volkswagen — rather than home-grown upstarts. But China's economy has slowed in recent years, while its carmakers, such as electric vehicle manufacturers BYD and Xpeng, have snatched market share from Western rivals, both at home and abroad, as a so-called EV 'revolution' has gained pace. To some extent, the German auto industry has been 'a victim of its own success,' Kirkegaard said. Brands like BMW, Mercedes and Audi, which found their fortune in the fossil fuel-burning internal combustion engine, 'were quite naturally reluctant to cannibalize their own success and throw a lot of money at developing electric vehicles.' Chinese EV makers, as well as Tesla (TSLA), 'have proven far better at… scaling up to producing literally millions of cars,' he added. Meanwhile, Germany's energy-guzzling industrial firms are paying more for their main fuel, natural gas, than before Moscow sent troops to Ukraine in 2022, prompting Europe to replace its gas imports from Russia with those from further afield. As a consequence, many German firms have slashed production and some have even shut down. 'We are in the midst of deindustrialization,' said Lars Kroemer, chief economist at Gesamtmetall, an association of employers in the metal and electrical engineering industry. That is worrying for an economy powered by 'highly specialized industrial companies producing highly specialized goods,' as a German government website put it. In addition to steep energy costs, high taxes and burdensome regulations have also clobbered the country's industry, Kroemer said. More broadly, strict limits on government borrowing in Germany — known as 'the debt brake' — have held back much-needed investment, including in infrastructure and online public services. 'We haven't yet digitized. Our bureaucratic burden is higher… than in other countries,' said Achim Wambach, president of the Leibniz Centre for European Economic Research, or ZEW. For months, Trump has been threatening to slap higher tariffs on goods imported into the US. Since taking office in January, he has proven he is prepared to walk the walk, announcing, for example, a 25% duty on all steel and aluminum imports, set to take effect in March. Then, last week, Trump ordered an investigation into whether the US should introduce reciprocal tariffs on imported goods, which would mean matching the tariffs levied by other countries on American products. And on Tuesday, he said he planned to impose a 25% duty on imported automobiles, semiconductor chips and pharmaceuticals as early as April. If foreign producers pass on most of the new tariffs to their American customers, their products could become less competitive than US-made equivalents. That would hurt German exporters in particular as the US is their single biggest market, representing 10% of all German exports, according to official figures. The impact would be felt most keenly by specific exporters, such as some beleaguered German automakers, Wambach said. 'Every additional push against (automakers) is bad news for the industry,' he told CNN. Across industries, about 1.2 million jobs in Germany depend, directly or indirectly, on exports to America, according to Prognos, a Swiss research firm. That figure represents 2.6% of all jobs in the country, per the latest government data. The extent to which the German economy overall will be affected by Trump's new tariffs will depend partly on their eventual levels. Germany's central bank has looked at a scenario in which Trump introduces universal tariffs of 10% and duties of 60% on imports from China, which he talked about on the campaign trail. It found that the German economy would 'suffer considerably,' with growth taking a sizable hit, Joachim Nagel, the central bank's president, said in a speech Monday. Even in the absence of direct tariffs on its goods, Germany could still feel the pain from tariffs imposed on other countries. Since taking office, Trump has also announced a 25% duty on all goods imports from Mexico and most products from Canada, and an additional 10% tariff on Chinese goods. But some German automakers, including Volkswagen, export cars to the US from their factories in Mexico. 'The whole (global) economy is like a network, so if you put a tariff or a hurdle… at one point, more or less the whole world economy will feel that,' said Michael Böhmer, chief economist at Prognos. He added that Mexico, Canada and China may redirect exports destined for the US to new markets to avoid Trump's tariffs, potentially putting those products in direct competition with German goods in those markets. Boosting Germany's growth in the next few years and beyond will require a lot more than finding ways to deal with Trump's tariffs. The country's entire business model may need an overhaul, as some have argued. Böhmer agrees. If, he said, over the next decade Germany fails to shift from 'quite old' industries, such as the production of cars, machinery and steel, to a 'future-oriented economy' focused on new technologies like artificial intelligence, then it 'will for sure not be third-biggest economy in the world anymore.' Maisie Linford and Sophie Tanno contributed reporting.
CNN
21-02-2025
- Business
- CNN
Analysis: It's a make-or-break moment for Germany's economy. Trump's tariffs won't help
When German voters go to the polls Sunday, the country's moribund economy — and promises to fix it — will be front of mind. But Donald Trump's looming import tariffs will make that daunting task even harder for the new government. Failure would be costly. If the parties most likely to form a new governing coalition do not manage to kick-start economic growth, 'they know who's going to win the next elections, and this would be the far-right AfD,' said Carsten Brzeski, a senior economist at pan-European bank ING, echoing others' fears about the Alternative for Germany party. The German economy, the world's third-largest, has barely grown since the pandemic. It shrank both in 2023 and last year, posting the first back-to-back annual contractions since the early 2000s. And this year, it is set to grow by a paltry 0.3%, according to International Monetary Fund forecasts. It wasn't always like this. Between around 2005 and 2019, the export-oriented economy was thriving, propelled by cheap natural gas from Russia, an imports-hungry China and a relatively frictionless global trading environment. But the world has changed dramatically since then, with Trump's return to the White House presenting the latest challenge for Germany's all-important exporters. 'A world in which free trade is not the… dominant economic mantra is problematic for Germany,' said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, a Washington, DC-based think tank. Economic reform to boost growth is then not only what voters want — and polls have shown the economy is one of their two top concerns — but it is also vital for the prosperity of Germany's current and future generations, not least that of its swelling ranks of pensioners. 'An unreformed German economy is a stagnating, aging, sclerotic… German economy,' Kirkegaard told CNN. Exports have long been a major driver of Germany's growth. In 2023, the latest year for which data is available, exports of goods and services accounted for more than 43% of the country's gross economic product — the largest share among major economies, according to the World Bank. Motor vehicles and their parts, machinery and chemical products were Germany's main exports last year, per its statistics office. Relying on foreign demand was lucrative when China's massive economy was growing rapidly and its consumers preferred to buy cars from well-established foreign automakers — such as Volkswagen — rather than home-grown upstarts. But China's economy has slowed in recent years, while its carmakers, such as electric vehicle manufacturers BYD and Xpeng, have snatched market share from Western rivals, both at home and abroad, as a so-called EV 'revolution' has gained pace. To some extent, the German auto industry has been 'a victim of its own success,' Kirkegaard said. Brands like BMW, Mercedes and Audi, which found their fortune in the fossil fuel-burning internal combustion engine, 'were quite naturally reluctant to cannibalize their own success and throw a lot of money at developing electric vehicles.' Chinese EV makers, as well as Tesla (TSLA), 'have proven far better at… scaling up to producing literally millions of cars,' he added. Meanwhile, Germany's energy-guzzling industrial firms are paying more for their main fuel, natural gas, than before Moscow sent troops to Ukraine in 2022, prompting Europe to replace its gas imports from Russia with those from further afield. As a consequence, many German firms have slashed production and some have even shut down. 'We are in the midst of deindustrialization,' said Lars Kroemer, chief economist at Gesamtmetall, an association of employers in the metal and electrical engineering industry. That is worrying for an economy powered by 'highly specialized industrial companies producing highly specialized goods,' as a German government website put it. In addition to steep energy costs, high taxes and burdensome regulations have also clobbered the country's industry, Kroemer said. More broadly, strict limits on government borrowing in Germany — known as 'the debt brake' — have held back much-needed investment, including in infrastructure and online public services. 'We haven't yet digitized. Our bureaucratic burden is higher… than in other countries,' said Achim Wambach, president of the Leibniz Centre for European Economic Research, or ZEW. For months, Trump has been threatening to slap higher tariffs on goods imported into the US. Since taking office in January, he has proven he is prepared to walk the walk, announcing, for example, a 25% duty on all steel and aluminum imports, set to take effect in March. Then, last week, Trump ordered an investigation into whether the US should introduce reciprocal tariffs on imported goods, which would mean matching the tariffs levied by other countries on American products. And on Tuesday, he said he planned to impose a 25% duty on imported automobiles, semiconductor chips and pharmaceuticals as early as April. If foreign producers pass on most of the new tariffs to their American customers, their products could become less competitive than US-made equivalents. That would hurt German exporters in particular as the US is their single biggest market, representing 10% of all German exports, according to official figures. The impact would be felt most keenly by specific exporters, such as some beleaguered German automakers, Wambach said. 'Every additional push against (automakers) is bad news for the industry,' he told CNN. Across industries, about 1.2 million jobs in Germany depend, directly or indirectly, on exports to America, according to Prognos, a Swiss research firm. That figure represents 2.6% of all jobs in the country, per the latest government data. The extent to which the German economy overall will be affected by Trump's new tariffs will depend partly on their eventual levels. Germany's central bank has looked at a scenario in which Trump introduces universal tariffs of 10% and duties of 60% on imports from China, which he talked about on the campaign trail. It found that the German economy would 'suffer considerably,' with growth taking a sizable hit, Joachim Nagel, the central bank's president, said in a speech Monday. Even in the absence of direct tariffs on its goods, Germany could still feel the pain from tariffs imposed on other countries. Since taking office, Trump has also announced a 25% duty on all goods imports from Mexico and most products from Canada, and an additional 10% tariff on Chinese goods. But some German automakers, including Volkswagen, export cars to the US from their factories in Mexico. 'The whole (global) economy is like a network, so if you put a tariff or a hurdle… at one point, more or less the whole world economy will feel that,' said Michael Böhmer, chief economist at Prognos. He added that Mexico, Canada and China may redirect exports destined for the US to new markets to avoid Trump's tariffs, potentially putting those products in direct competition with German goods in those markets. Boosting Germany's growth in the next few years and beyond will require a lot more than finding ways to deal with Trump's tariffs. The country's entire business model may need an overhaul, as some have argued. Böhmer agrees. If, he said, over the next decade Germany fails to shift from 'quite old' industries, such as the production of cars, machinery and steel, to a 'future-oriented economy' focused on new technologies like artificial intelligence, then it 'will for sure not be third-biggest economy in the world anymore.' Maisie Linford and Sophie Tanno contributed reporting.
