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DW
22-07-2025
- Business
- DW
'Made for Germany': German Companies show optimism – DW – 07/22/2025
German Chancellor Friedrich Merz has joined forces with the country's top business leaders, who pledge major investment to pull Germany out of recession. There is always an element of psychology in economics. If companies are confident they can do good business in the future, they will strongly invest. If prospects look poor, they will hold on to the money. The COVID-19 pandemic with its collapse of international supply chains, the war in Ukraine, the subsequent energy crisis and inflation, the weakening economy in China — all took a heavy toll on the export-oriented German economy. Economic activity nosedived. Germany slid into a lasting recession. Since then, optimism has not returned. The Organization for Economic Co-operation and Development (OECD) registered a lower investment ratio for Germany in 2024 than all other 38 member countries. That will soon change, according to the heads of leading companies in Germany. A total of 61 of them, including corporations such as Airbus, BASF, BMW, Deutsche Börse, Mercedes-Benz, Rheinmetall, SAP, Volkswagen but also the US corporations Nvidia, Blackrock and Blackstone — have launched the initiative "Made for Germany." The name is reminiscent, deliberately, of the slogan "Made in Germany" which has become a symbol of quality. Together, the corporations representing a third of the German economy want to invest €631 billion ($733 billion) in Germany over the next three years. The money will go toward new and existing factories, as well as research and development. "We want economic growth, we want to strengthen Germany's competitiveness, we want to defend our technological leadership or extend it further," one of the alliance's two initiators, Siemens chief executive Roland Busch, said following a meeting of the initiative with government politicians at the chancellery. Christian Sewing, chief executive of Deutsche Bank and co-initiator of the alliance alongside Busch, expects even more businesses to join. "Germany is back. It's worth investing in Germany again," said Chancellor Friedrich Merz of the conservative Christian Democrats (CDU) after the meeting. "We stand here before one of the largest investment initiatives that we have seen here in Germany in recent decades. We are not a location of the past, but a location of the present and above all the future," he added. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video The mood in the chancellery was clearly positive. However, the economic situation in Germany remains sluggish; the country is facing its third year in a row without growth. Given the tariff policies of US President Donald Trump, the outlook is anything but good. Reviving the economy is the top priority for Germany's new government. The coalition of the center-right Christian Democrats and Christian Social Union (CDU/CSU) and the center-left Social Democrats has been in office since early May. They have made their first steps: The Bundestag federal parliament and Bundesrat upper house have authorized the borrowing of €500 billion ($580 billion) for a special fund for government investment in infrastructure and climate protection. Its intended focus is to whip the country's ailing transport routes into shape, invest in energy networks, digitization and research. Energy prices for the industry will be reduced, and businesses are set for massive tax relief. Initially, investment in production facilities, machinery, equipment, research and development will be accounted for during tax assessments. In the medium term, taxes on business are to be reduced. In Friedrich Merz, Germany now has a chancellor who himself spent many years in business. Among other roles, the lawyer formerly chaired the supervisory board of the US financial investor BlackRock. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video "Today we have begun a new form of cooperation," Siemens head Busch said. "The conversation has shown that politics and business are on the same page." Deutsche Bank CEO Sewing added: "In my view, we are experiencing a government that is moving quickly. The most important things — growth and competitiveness — are right at the top of the agenda." To release the announced billions, politicians should ease up on regulations and give companies more freedom, Sewing said. Businesses are calling for reforms, especially concerning bureaucracy and social security contributions which push up the cost of labor. In Germany, employers and employees each pay half of worker contributions to health insurance, unemployment insurance and pensions. Due to higher costs for healthcare, health insurance contributions increased across the board at the beginning of this year. Contributions to long-term care insurance are expected to rise in 2026. In Germany, 42% of the gross national product goes toward social services. Pension funds are the biggest driver of this. Germany is an ageing society, and the baby boomer generation will retire from the workforce in the coming years. In addition, life expectancy is increasing. To afford the old-age pension, the government must contribute more money to the pension funds each year. According to the OECD, reforming social insurance is the biggest challenge for Germany. If nothing changes, the government will need to keep taking on more debt to keep social systems afloat. Chancellor Friedrich Merz has announced that reforming the social system is next on his coalition's political agenda. Initial findings are expected in the coming you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter, Berlin Briefing.
Business Times
21-07-2025
- Health
- Business Times
A looming dairy drought will stunt the world's growth
IT IS every baby's first food, and we cannot get enough of it. The world produces close to a billion tonnes of milk each year – more than all the wheat or rice we grow. That lead is set to widen over the coming decade, with dairy consumption expected to grow faster than any other agricultural commodity. On a rapidly warming planet, this poses a host of problems. Consider demand. There are more than half a billion people under the age of four in developing countries, and about a third of them suffer from stunting – short stature that is associated with health, educational and economic problems in later life. Most could benefit from the policy first proposed by Scottish nutritionist John Boyd Orr in the 1920s: provision of dairy products to give them a more nutritionally rich diet. That is one of the main pillars of Indonesian President Prabowo Subianto's newly introduced free school meals programme, as my colleague Daniel Moss has written. Similar programmes have been set up in many states in India, as well as South Africa and Kenya. In terms of human welfare, we should be welcoming this trend. Dairy products are relatively expensive, and we consume more of them as we rise above the most basic subsistence levels. If South Asia, South-east Asia and sub-Saharan Africa are likely to see booming consumption over the coming decade, as the Organization for Economic Co-operation and Development forecast last week, it is largely a positive symptom of their long-awaited economic development. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The problem comes when you start looking at supply. Milk is mostly being produced in the wrong places for the young stomachs that need it. More than 90 per cent of children under four are in developing countries – but the same nations produce barely half of the world's milk. Europe alone represents a quarter of global output, and highly perishable dairy products are not much sold across borders. The total worldwide trade in whole milk powder, for instance – after a decade when China's hunger for baby formula upended the global dairy industry – accounts for about 2 per cent of raw milk. Even that limited commerce has been sufficient to upset local supply chains. In New Zealand, often likened to the Saudi Arabia of dairy thanks to its dominance in exports, demand from South-east Asian importers drove whole milk powder prices to a three-year high in May, while butter inflation is running above 50 per cent. With trade providing only limited relief, we are most likely to see shortages, as rising demand from developing countries is met with limited increases in supply. The world's milk deficit will hit 30 million tonnes by 2030, the International Dairy Federation warned in April. The IFCN Dairy Research Network, a separate group, still sees a 10.5 million tonne shortfall by the same date. That dairy drought will push prices beyond the reach of those who most need it. Climate change makes all of this worse. Rising temperatures will mean it is even harder for tropical and subtropical countries to be self-sufficient: Extreme heat can cut milk production by as much as 10 per cent, according to a study in the journal Science Advances earlier this month. Milk is also a major culprit in global warming, as well as a victim of it. Dairy cattle emissions, mostly from methane-dense burps as cows digest grass, amount to 2.1 billion tonnes of carbon dioxide a year, equivalent to what is caused by two-thirds of all cars. The shift to more production in developing nations will make this even worse. Pollution for each kilogram of raw milk in Africa and South Asia is three to four times higher than in developed countries, because the mechanised, intensive dairy farming practised in the rich world has a far lower carbon footprint. What can be done to fix this? Wealthy nations whose appetite for plant-based alternatives appears to be wavering should recommit to their shift away from livestock-based food. Far too much of our limited capacity to sustain dairy production is still being hogged by affluent populations, who have grown so jaded that we now use milk for luxuries like bodybuilding supplements as much as for basic nutrition. Relatively prosperous developing countries like China and Brazil can also up their game by moving to more intensive farming. They could get by with a third of their current dairy herd if they raised yields to developed-world levels. In India, the biggest dairy producer, the benefits could be even greater. Thanks to religious objections to the slaughter of cows after they stop producing, there are more than five million stray cattle roaming the streets, spreading disease, attacking people, getting hit by traffic and fuelling organised crime. A smaller, more intensively raised herd would shrink this bovine epidemic. Greater dairying of buffalo, which already produce about half of India's milk and are not considered sacred, would also help. One thing is certain, though: Exhorting poor countries to give up the nutritional benefits of dairy that their richer peers have enjoyed is repugnant, and bound to fail. If we want to reduce milk's carbon footprint, we are going to need to produce it more efficiently, rather than hoping the problem will just go away. BLOOMBERG
Yahoo
12-06-2025
- Business
- Yahoo
OECD urges Germany to expand workforce by engaging women and seniors
Germany must do more to integrate women and older workers into the labour market as the country struggles with a growing shortage of skilled workers, the Organization for Economic Co-operation and Development (OECD) said. Part-time work is on the rise across the population, particularly among women, parents and older people, the OECD noted in a report presented in Berlin on Thursday. The Paris-based organization warned that the shortage of skilled labour risks becoming a major drag on economic growth. Germany's tax system incentivizes unequal earnings between spouses, discouraging women from working more hours, the report said. It also criticized financial incentives that encourage early retirement. Germany's labour shortage is already affecting businesses, with over 81% of firms reporting difficulties in finding workers in a survey covering 2022 and 2023. About 36% even described the situation as a "severe shortage."
Japan Today
10-06-2025
- Politics
- Japan Today
Nations call for strong plastics treaty as difficult talks loom
Countries have been negotiating a global treaty to address a torrent of plastic entering the environment, including the oceans. More than 90 countries called on Tuesday for a global treaty to restrict plastic production, ahead of another round of hard-fought negotiations on the pact. The talks collapsed in late 2024 with nations unable to agree on how to stop millions of tons of plastic waste from entering the environment each year. Ahead of the next round of negotiations in August, ministers from 95 countries issued a symbolic call for a binding treaty that caps plastic production and phases out harmful chemicals. "This declaration sends a clear and strong message: we will not give up," France's environment minister Agnes Pannier-Runacher said at the U.N. Ocean Conference in Nice in southern France, where the statement was issued. "We must reduce our production and consumption of plastics." So-called "high-ambition" nations have long pushed for the accord to include caps on the manufacture of new plastic, which is largely made from chemicals derived from fossil fuels. An opposing group of "like-minded" countries -- mostly oil and petrochemical giants -- have rejected calls for production limits, and pushed instead for a treaty that prioritizes waste management. Mexico's environment minister Alicia Barcena said caps on plastic were critical "to send a message on the root of the plastic crisis" and recycling and waste management alone would not solve the problem. In 2019, the world produced around 460 million tons of plastic, a figure that has doubled since 2000, according to the Organization for Economic Co-operation and Development. Plastic production is expected to triple by 2060. But just nine percent of plastic is recycled globally and every day, the equivalent of 2,000 garbage trucks worth of plastic waste is dumped into oceans, rivers and lakes. "We are heartened to see this demonstration of ambition from the majority of countries, who are showing a united front against the small number of petro-chemical states trying to prevent a strong treaty," said Ana Rocha from GAIA, an alliance of activist groups. The declaration also called for the elimination of "chemicals of concern" in plastics that are harmful to human health and the environment. A treaty lacking these elements or based on voluntary measures "would not be effective to deal with the challenge of plastic pollution", they said. Plastic pollution is so ubiquitous that microplastics have been found atop Mount Everest, in the deepest ocean trench, and in human blood and breastmilk. U.N. Secretary-General Antonio Guterres on Tuesday urged nations to "confront the plague of plastic pollution" and expressed hope the treaty talks would be concluded this year. © 2025 AFP
Business Insider
10-06-2025
- Business
- Business Insider
Trump's trade war could drag global economic growth to the lowest since the 1960s, World Bank says
The 2020s could be the weakest decade for economic growth since the 1960s, the World Bank said in a report on Tuesday. The culprit for the potential bout of sluggish expansion? Tariffs, the organization said. "Only six months ago, a 'soft landing' appeared to be in sight: the global economy was stabilizing after an extraordinary string of calamities both natural and man-made over the past few years. That moment has passed," wrote World Bank Chief Economist Indermit Gill and Deputy Chief Economist M. Ayhan Kose in the report. The economists continued: "This year alone, our forecasts indicate the upheaval will slice nearly half a percentage point off the global gross domestic product (GDP) growth rate that had been expected at the start of the year, cutting it to 2.3 percent. That's the weakest performance in 17 years, outside of outright global recessions. By 2027, global GDP growth is expected to average just 2.5 percent in the 2020s—the slowest pace of any decade since the 1960s." Gill and Kose laid out three ways to boost growth from current projections. One would be to restore trade relations. Global GDP this year and next would be 0.2% higher if tariffs dropped by half from their May 2025 levels, the economists said. Second, governments need to rein in fiscal deficits. "In the era of easy money that preceded the COVID-19 pandemic, governments opted to take too many risks for far too long," Gill and Kose wrote. "The bill is now due: fiscal deficits so far in the 2020s have averaged nearly 6 percent in developing economies, the highest level of this century. Interest costs alone account for about a third of the deficits." Finally, governments, particularly those in developing economies, should focus on job growth. Working-age populations in regions like South Asia and sub-Saharan Africa are expected to rise by hundreds of millions, the economists said. The World Bank joins the Organization for Economic Co-operation and Development in dropping GDP forecasts. OECD now sees 1.6% growth in the US in 2025 instead of 2.6%. Federal Reserve forecasts for US GDP growth are also lackluster. The central bank's Federal Open Market Committee sees a median of 1.7% growth in 2025 and 1.8% growth in the "long run," though the projections were made before many of Trump's tariff proposals. Trump's 90-day pause of his "Liberation Day" tariffs will end on July 9. Countries have been meeting with the Trump administration to renegotiate current trade deals in an effort to avoid the proposed steep import duties on their goods. The jury is still out on how tariffs are affecting the US economy. Consumers and small businesses have reported heightened uncertainty, but the labor market has so far held up, adding 139,000 jobs in May.
