Good morning, dear readers,
The coalition committee negotiated for 19 hours and then adjourned without a result. Democracy can be so annoying (read all about no-results at night here). In times of crisis, who doesn’t sometimes wish for a benevolent dictator who would simply take action and do the right thing?
Anyone who thinks like this should think again. Because the prejudice that autocracies are better at dealing with crises because they save themselves lengthy political processes and lazy compromises is simply not true. Social market economies like Germany are better able to deal with economic shocks than China or Russia. And the systems of German or Scandinavian character are also superior to the even more market-oriented states of the USA and Great Britain in crises. This is the result of a study by the Roman Herzog Institute, which is close to employers, on behalf of the Bavarian Business Association (VBW), which is available to the Handelsblatt.
In their meta-analysis, the authors of the study led by economist Michael Hüther, head of the German Economic Institute, compare Germany’s ability to withstand crises with that of other countries. According to this, Germany ranks sixth among 24 countries.
Perhaps this realization offers consolation when the coalition committee negotiates further today. And negotiate. And negotiate.
The coalition committee no longer has to argue about a topic. At the urging of the FDP, the Federal Republic of Germany pushed through in Brussels that it will probably still be possible to register combustion vehicles after 2035, provided they are only operated with synthetically produced, climate-neutral e-fuels.
However: Unless production costs fall dramatically, e-fuels will remain a niche product for a few supercars. The potential demand would be gigantic, because even after 2035, many millions of existing vehicles with combustion engines will still be on the road in Germany alone for years to come. Not to mention trucks, ships and planes, for which there are still no practicable methods of operating them on a large scale in a climate-neutral manner.
The management consultancy Oliver Wyman has now calculated what it would cost to gradually add synthetic fuels to petrol, diesel and kerosene and to completely replace them from 2040. According to the analysis, this would require cumulative investments of 120 to 310 billion euros.
According to the calculations, around four billion liters of e-fuels would be needed in Germany every year with an admixture rate of ten percent. However, the global capacities of the production projects announced to date only add up to a maximum of two billion liters per year. “But there will be far too few e-fuels to be able to operate millions of vehicles in Germany,” says Fabian Brandt, automotive expert at Oliver Wyman.
Main problem: Synthetic fuels are currently not competitive, they cost between five and ten euros per liter.
Perhaps the world needs an entrepreneurial personality who can do with e-fuels what Tesla boss Elon Musk has done with battery-powered vehicles: with new technologies, efficient processes and large quantities to reduce costs to such an extent that a breakthrough in the mass market is possible. And at the same time using the chorus of all those who consider this impossible as an inner source of energy.
Oops, by Bundeswehr standards things went really fast: just two months after the long-controversial decision, 18 Leopard 2A6 main battle tanks from German army stocks arrived in Ukraine. “Yes, we delivered the Leopard tanks as announced,” confirmed Chancellor Olaf Scholz yesterday. According to the Ministry of Defense, ammunition and spare parts and the crews trained in Germany also arrived in the Ukraine, as well as two armored recovery vehicles with the beautiful name “Buffalo”.
The federal government is apparently determined to quickly expand its arms aid for Ukraine and, if necessary, to hold out for years. This is indicated by an email from the Ministry of Finance to the Budget Committee of the Bundestag, from which the “Spiegel” quotes. In the current financial year, the federal government has budgeted 2.2 billion euros for these arms deliveries. This sum is expected to more than double this year to over 5.4 billion euros. In the coming years, an additional EUR 8.8 billion is to be made available for corresponding “commitment authorizations”. So far, only one billion euros was planned for this. The “Spiegel” quotes from the letter: “Due to the high material losses of the Ukrainian armed forces, new supplies of material are required.”
We come back to the greater crisis resilience of democracies compared to dictatorships. Even democratically elected politicians sometimes make really stupid decisions. But the chances are good that they will either have to correct themselves at some point – or be voted out. Israeli Prime Minister Benjamin Netanyahu yesterday opted for the first option and announced a temporary halt to his controversial judicial reform. The largest union then called off a general strike.
We do not know how crisis resilience is affected when a democracy affords a king as the ceremonial head of state. But one thing is certain: the diplomatic protocol is becoming more complicated. The “Süddeutsche Zeitung” reports on the preparations for the inaugural visit of British King Charles to Berlin, which begins tomorrow. For the first time in the five and a half years that Kai Baldow has been Chief of Protocol for the Federal President, the dress code for the state banquet in Bellevue Palace is tails instead of the usual tuxedo.
Which shouldn’t surprise anyone who has followed the British aristocratic series “Downton Abbey” with due attention. In one episode, the head of the house presents his wife with the tuxedo he just bought, only to add reassuringly: Of course, it’s only for evenings when you don’t have guests. So to speak, the sweatpants of the upper class.
I wish you a day when you take control of your life.
Your Christian Rickens
PS: The mega strike is behind us. We are interested in how you fared: Were you in the right place at the right time yesterday? Do you think the demands are justified? And quite fundamentally: would you want to go on strike at the moment? Write us your opinion in five sentences [email protected]. We will publish selected articles with attribution on Thursday in print and online.